While having great products is a necessity in the retail world, Qurate Retail Group Inc. turns the focus of selling on its head. For Qurate, which operates the QVC, HSN and Zulily businesses, selling isn’t about pushing products to the consumer and hoping that they buy. Qurate’s president and chief executive officer Mike George, in a discussion with WWD editorial director James Fallon, said the company’s success is its ability to address the core need of viewers to be engaged. Viewers engage on multiple platforms and don’t necessarily have any intent to buy, but it’s the form and nature of the interaction that can ultimately inspire them to make a purchase, explained George.
WWD: Given the techtonic changes shaking retail, how is Qurate adapting to all of that change?
Mike George: The company has evolved enormously from its roots as a TV shopping company in the U.S. 30 years ago with our QVC business. We do live at this very wonderful and strange intersection of retail and media, content and commerce and social, and also brand marketing because we’re really at our heart a brand builder as a company. And so for us, it’s about understanding this explosion about digital media.
So how do we take advantage of this explosion of digital media to present ourselves in new ways to new sets of consumers? How do we take advantage of the consumer coming back around to retail as an experience, a curated engaging experience?
Retail is more than a search box and an algorithm and free shipping, so how do we take advantage of that desire for more from the shopping experience? We think about how brands are being built differently in today’s world. This growth of digitally native brands, even China-direct brands, the very way in which brands grow up in today’s world are changing so we think about how do we use our platforms to go after all those opportunities, leverage our global scale and reach, our consumer engagement and our web properties — but be willing to keep changing.
And so our mantra is about constant innovation, continue to try to reach new sets of customers in new digital platforms, be willing to try things, fail and move on, and continue to deepen that product experience and add more value to the consumer. It’s really been a fun time for us. It’s been a dynamic time for us. We’re trying to release new capabilities on a weekly basis to reach new sets of consumers and trying to reimagine what this business could be.
WWD: You announced voice activation today. What was the decision behind that?
M.G.: We released a skill on Alexa for our HSN brand and we’ll expand that across our other brands over time. Alexa and its cousins, these will have a fundamental change in the ways people will engage with brands over time. In many ways they are a voice version of a search engine. Quite frankly they are not very friendly to brands, and they’re not very friendly to the shopping experience. And if you search a typical brand term or fashion term on Alexa or on a marketplace, you’ll see what you get. So we wanted to change that equation and we are about having a relationship with our customer and get her on a conversation.
For us, conversation commerce is a logical extension of our core value proposition so we wanted to use Alexa to help the consumer search for inspiration rather than search for a product. So if you get an Echo Show as an example, which is an Echo device with a video screen built in, you can engage with Alexa, you can bring in HSN, you can engage with our platform and search for those things you care about and be presented with great, rich content, live and on demand, that will help you have a deeper experience with the brand. I think it’s perfect for use in our model, but we have to use it in a way that’s right for us.
WWD: How do you judge the right time to go into conversational commerce? You don’t want to go into it too early — and you made the point that you’re not afraid to innovate and fail, but you obviously want to succeed — so when’s the tipping point? Is it the number of users of the devices, or how does it work?
M.G.: I wouldn’t say we have a really systematic view on that. We think a lot about our flywheel. We think a lot about how we create value and how these changes in the world really intersect with that and stay true to the brand proposition, and then it’s a matter of what does it take to innovate, how big is the change.
We talk a lot about shrinking the change so we can do something that’s reasonable in size, can be delivered quickly. And so we have been debating voice-activated conversational commerce for probably a year, and about three months ago, we said “OK, it’s time to stop debating it and just get a prototype in market.” Part of the head-set change we’ve needed is we are so proud of our customer experience, so proud of customer loyalty and retention that we’ve probably erred on the side of being overly conservative about giving her new features and benefits before we’re confident they’re perfect.
So now we realized we live in a world where we’re going to give her things that are imperfect, but extend the experience, and then we’ll co-learn with her and evolve the experience. I think voice commerce — we view what we have on the market today — is very preliminary, but we’ll learn with her what she cares about and that’s a little bit of a different way to think for us.
WWD: And do you think the consumer’s willing to learn with you as opposed to getting frustrated?
M.G.: We’ll find out. I think so. We have really passionate consumers who will share their feedback very directly with us in lots of different platforms. We have lots of different listening tools to hear her and so it will be a mix. Some will get frustrated, but I think we just have to be willing to try. If it’s not working, we’ll back up and we’ll go in a different direction and she understand that and she’ll be OK.
WWD: Was that new attitude toward trying things also part of the decision to merge QVC and HSN into one business unit?
M.G.: It was. We acquired HSN in January of this year, and we believe in both brands. We will maintain both brands, but when you think about the pace of technological change, that goal to innovate at a higher speed, we needed to figure out what can we do together in combination that will give us the best of both brands and still maintain the unique identity of each brands.
We’re bringing the two businesses together, maintaining separate brands, separate campuses, but now we can drive innovation on the digital platforms, innovations on mobile and innovations on voice commerce in a cohesive, aligned way. And we’ve also brought our merchandizing teams together across QVC and HSN so we can really think about a category and a customer and create the optimal assortment across both QVC and HSN in an integrated way. Between those two brands, we have five broadcast networks in the U.S., so how do we make sure that all five networks are engaging different consumers with complementary propositions in product and programming. We needed to bring things together to create that separation and complementary [product lines] across brands in the networks.
WWD: When you’re looking at all the brands, be it HSN, QVC or Zulily, and then the different platforms and the different devices that they’re on, obviously TV, mobile, desktop, etc., does that dictate the different programming that you’re looking at?
M.G.: Today, we think more about customer journeys than about platforms, where is the consumer, what is she trying to do, what does the shopper want to do, and how do we intersect that desire in a way that’s engaging for her.
So we just find this infinite array of journeys that we can tap into, everything from I’m on Facebook and I’m in a community learning more about beauty, and we can intersect that interest with our live beauty broadcast channel, Beauty IQ, which we simulcast on Facebook live. We can engage her in that learning moment. We can take her to a site that doesn’t have QVC or HSN on it, but is a marketplace that has QVC, HSN or Zulily products but under a different social platform, kind of a micro brand, a social brand.
If she is on YouTube, and she is focused on the use pattern on YouTube, which is typically learning how to do something new, and if she wants to learn how to fry a Turkey for Thanksgiving, which I highly recommend, if you search how to fry a turkey without burning down my house, we want to be there. We want to be there with really great content and, by the way, with some really great turkey fryers. So what are all those occasions on our interactive TV platforms? We can present to her multiple networks, multiple on-demand programming. So it’s just about knowing where she is and what she wants to get done and try to create an experience that makes sense for her.
WWD: But as the consumer constantly changes, are you seeing the pace of that change in different ways across your difference properties?
M.G.: I don’t know that it’s different across different properties. What strikes me about the consumer is that she has an ever-growing array of ways that she can shop, influence the experience, engage with a product or brand and we just have to go with her. On any given day she’s engaging with multiple devices, she’s doing lots of different things, and we just have to be ready for her.
At the same time, we have to understand that at her core, she isn’t changing at all, and the things that are true about what consumers cared about 30 years ago [or] today are constant. So if we can speak to her, if we can solve a problem for her today, if we can help lift her aspirations, if we can use fashion to help her engage in a wider world and be her best self, we should do that whether that’s through a TV broadcast or a Facebook experience. In any of those vehicles, it’s really all about a great product, a great brand, a great story to tell and a way to uplift and inspire our people and then just go wherever she is and be present and relevant for her.
WWD: You’re known for celebrity collaborations. Has the type of celebrities you work with changed?
M.G.: Maybe I’d reframe it a little bit. We don’t think about celebrity collaborations. We think about great products that have stories to tell, and great storytellers for those products. Most of the folks on QVC or HSN aren’t celebrities. They can become celebrities, but they have a great product, a great idea and they’re engaging and inspirational. That same criteria applies to celebrities, and so if a celebrity really is engaged, really has a story to tell, really has a compelling product and has personally invested in that, then we can do great things together.
Catherine Zeta-Jones debuted about a year ago a beautiful home decor line totally inspired by her upbringing and the things that she values. She can speak to that, but it’s successful, not because it’s her, it’s successful because it’s an amazing product and it’s really a compelling person who’s there to tell that story.
WWD: And how do you use social media influencers? Are they vital to your operation now?
M.G.: I would say they are important and growing in importance. But we also bring everything back to our intrinsic brand value. So the way we think about our business is we’ve had influencers for 30 years. They are our program hosts, our guests, built around a very strong belief, which is they were your trusted guide.
We still have this saying that says, “The host should be like the person you have as your neighbor at your backyard fence.” It’s kind of a hokey idea 30 years ago, but still relevant today because you’ll get an idea or a recommendation from a friend, and so that spirit is still relevant today. You just have to do it in a way that makes sense. So, yes we’re working with well over 100 influencers, but it has to be authentic. They have to be really invested in the product. The stories they are telling has to be real.
We’re also increasingly thinking about our customers as increasingly becoming influencers. Word of mouth is one of the biggest ways we’ve driven our business over the years, so how do we make our customers advocates? We are [testing] some new programs to formalize that, leveraging social media. So it’s one of saying yes, but still coming back to it’s got to be a trusted interaction that is meaningful to the consumer and not just a name and someone who has a big following.
WWD: Is that how you’re bringing experiential into online retailing as well?
M.G.: Very much. We do want people to be engaged in an experience. We start with the fact that our viewers and visitors show up every day, and they do show up most days with no purchase intent, they just simply want to be engaged and inspired, whether it’s taking them behind the scenes at fashion week through a Facebook Live digital-only broadcast, or taking them to the Academy Awards or just getting them behind the scenes or an Isaac Mizrahi podcast that will come out in a few weeks. All these ways we can touch people with all the media platforms that are available to uplift them, to get them into an experience that will occasionally inspire them to purchase, and that’s great, but often it’s just a way to be engaged.
WWD: You came from Dell to QVC. What are the similarities between online ordering a computer and buying a dress?
M.G.: Dell was early on with dell.com. When I was there, we were in this tough transition mode from calling a customer service rep and going through a 30-minute discussion about the computer you needed to now how do we create that experience online. It was difficult. One of the things that I found fascinating when I was running the consumer business at Dell was that we only had one indirect customer that sold out product, which was QVC. QVC had doubled the average selling price on the ones they were selling than the ones Dell could sell because QVC could help you understand what you needed and do it in an engaging way and still be the best value, piece for piece, for that computer. So I think just that power of engaging someone, you could see the kernels of that and what we were trying to do at Dell. I think at QVC that came to life for us over the years.
WWD: I know you’re a history buff. What do you historically think is the biggest retail challenge for ceo’s today?
M.G.: I think it’s about how do we just keep current with where this consumer is going. We have to have a lot of respect for the customer, what she cares about and what she’s passionate about. And then we have to be able to, and this is the hard part, create optionality in our business model and not get tied to any specific mode of delivery because it’s going to just keep changing at this highly accelerated rate.
We have to keep get our teams comfortable with accepting change. That’s not easy. It’s not easy at Qurate. It’s a push and a challenge every day. But this idea that the world will keep accelerating, stay true to the consumer and continue to love that consumer and what she does for our company and what she values and what her whole life is, and then move faster to serve her.