QVC Aims to Build Loyal Beauty Clientele

NEW YORK -- Cocktail party chit-chat about QVC Network can easily turn to dollars-per-minute bravado, but the TV shopping operation is trying to go beyond the quick hit.<BR><BR>QVC wants to become a buy-anytime business in cosmetics.<BR><BR>"In order...

NEW YORK — Cocktail party chit-chat about QVC Network can easily turn to dollars-per-minute bravado, but the TV shopping operation is trying to go beyond the quick hit.

QVC wants to become a buy-anytime business in cosmetics.

“In order to build brand loyalty, we have to be able to service the customer,” said Darlene Daggett, vice president of merchandising. “We have to stock the product.”

Daggett said she is working to keep an inventory of a minimum of eight to 10 weeks’ worth of merchandise. To do that, Daggett said she has changed her method of computing an open-to-buy. Rather than buying strictly for the on-air program, she said she now adds her expectation for the weeks between broadcasts, which can total up to 25 percent of the business.

To educate the consumer about QVC’s buy-anytime offer, the network is running TV promotional spots between programs and sending information to viewers when fulfilling orders.

The buy-anytime program is part of QVC’s plan to build its cosmetics business, which Daggett said now accounts for about 5 percent of the network’s $1 billion in annual sales.

“We have yet to maximize our cosmetics business,” Daggett said. “I think there are significant opportunities to expand the category. It’s a huge opportunity for us, definitely a very high priority for 1994.”

Daggett said she sees room for growth in “upscale, cutting edge” proprietary lines such as Hydron, a treatment range with updated technology, and branded lines, such as Elizabeth Arden, Guerlain and Tova Borgnine, which are seen lending credibility to QVC. Then there are the key items, which can generate immense volume.

Daggett singled out a “key item” from Flori Roberts, an ethnic-oriented skin care and makeup line. Over a recent weekend, a five-piece Dermablend kit, priced at $27.50, generated sales of more than 32,000 units for a volume of $880,000.

Although she declined to break down cosmetics sales by percentages, Daggett described QVC’s skin care and fragrance businesses as “well-developed” and said makeup has “tremendous opportunities.”

“We’re prepared to work with anybody who can bring us something new and different in color,” she said. “In order to make color more interesting, we’re going to have to sell it on a treatment basis.”

Makeup programs need to be more problem/solution oriented, Daggett said, in the way skin care shows are. Makeup, because of its personal nature, has also been running higher return rates than the cosmetics category as a whole, she said.

The cosmetics category overall has a return rate in the single digits, compared with 18 percent for all of QVC.

While QVC is hunting for unusual lines to add to its stable, cosmetics companies are investigating ways to get in on the TV shopping phenomenon.

Origins Natural Resources and Avon have been working on infomercials, and Revlon is tinkering with a Dolly Parton infomercial. Last fall, a group of prestige fragrance houses, including Jean Patou and Givenchy, took part in a QVC show.

Alan Beck, president and chief operating officer of Patou, said his two QVC appearances with Joy resulted in sellouts with return rates of about 4 percent. Beck said the shows convinced him that “certain kinds of fragrance can be sold” on TV, namely those that have name recognition and that come with a specific story.

Smaller companies are also finding room on the tube.

“It’s impossible for an entrepreneur to go head-to-head with the conglomerates,” said Tova Borgnine, who is in her fourth year on QVC.

BeneFit, a San Francisco-based firm that sells in specialty stores such as Henri Bendel and I. Magnin, recently made an appearance on Joan Rivers’s “Can We Shop?” nationally syndicated show.

Jean Danielson, a co-owner of BeneFit, said that in seven minutes the program sold $47,000 of a set called “Read My Lips.” For $28, viewers could purchase Total Repair, a lip treatment product; Lip Plump, which makes lips appear 20 percent fuller, and Matte Transformer, which makes any lipstick look matte. Sold separately in stores, the three items retail for $41.

“It had a certain cache,” Danielson said of the Rivers program. “It had a legitimacy beyond QVC.”

QVC, though, is actually one of the producers of “Can We Shop?” and is handling the merchandise fulfillment. Danielson said the program purchased the products on consignment.

Although QVC and other TV venues are often associated with celebrity-backed lines, Daggett said not every line needs a star behind it, and not every celebrity has what it takes to develop a successful merchandise line.

“There’s a distinct difference between being able to talk live with a host and a viewer and appearing in a print endorsement,” she said.

Susan Lucci, who plays Erica on the daytime soap “All My Children,” has a hair care line on QVC that one day last year registered $1.3 million in sales in one hour. She maintains, however, that customers are too savvy to accept a product just because it’s connected to a celebrity.

Lucci said, “I think a woman with hair extensions should not be selling hair care systems.”