Mike George wants to reintroduce you to the QVC shopper.
This story first appeared in the May 15, 2009 issue of WWD. Subscribe Today.
“Our customer shops everywhere, and we compete against everyone,” said George, QVC’s president and chief executive officer, adding the network’s 10 million customers are avid shoppers with above average incomes.
In fact, George declared that last year QVC delivered a staggering 180,000 packages within a mile of 57th Street and Fifth Avenue in Manhattan, “the heart of the best shopping district in the world.”
Over the last decade, QVC has amassed a beauty portfolio of prestige brands — mass market brands need not apply — and in so doing has been steadily changing perceptions.
But still, the consumer tends to do her own research about QVC’s $1 billion global beauty business before buying.
George acknowledged, “The average customer spends 37 hours watching QVC before she makes her first purchase, because she approaches it with that same stereotype that, ‘This is not for me. This is for crazy Aunt Gladys.”
QVC’s aim is to prompt the sale in the context of information and entertainment. “Our mission at QVC is to create a real lifestyle destination for women,” said George. “We are in a constant state of reinvention. I think that’s necessary in today’s world.”
As it continues to reinvent, the network — the second largest TV network behind CBS — also is expanding its reach. The $7 billion company operates in the U.S., the U.K. and Germany. It will add Italy to that list next year, and “expects to have more markets on the horizon,” said George. It’s global sprawl is benefiting its brands as well. One of its largest beauty brands, Bare Escentuals, is sold on QVC in three languages and in four countries, said George.
QVC’s decade-long effort, under the stewardship of Allen Burke, director of beauty and cosmetics, to transform its beauty business and increase its importance within the company is paying off. George said beauty now accounts for 14 percent of QVC’s sales, up from 4 percent 10 years ago, due in large part because, the company “had the courage to walk away from the volume business” and add upscale players to the fold. Referring to beauty’s role within QVC, George said. “It’s by far the fastest growing and arguably the most strategic part of our portfolio.”
The category continues to widen and QVC is bent on following the category’s lead. One area QVC is most interested in is beauty devices. “The dermatologist is becoming more important than the beauty adviser.
This is a real change,” said George, noting over the last 10 years noninvasive cosmetic procedures have risen 750 percent to create a $5 billion market. “The consumer is spending a lot of money, just in different ways,” he said. “Devices will absolutely change the beauty market in a profound way.” That said, QVC launched the laser-hair removal device Tria in February. “Our job was to tell customers why they should spend, in the middle of the worst recession in years, $800 on a laser hair removal device,” said George. “And the results have been explosive. Price is not a barrier if it works.” He pointed to the Clarisonic Skin Care Brush as another example of a technology that trumps price. “Another challenge is to get consumers to spend $200 on a device that replaces the wash cloth.” He added that a deluge of customers have declared they think Clarisonic is worth its price tag. “Real science works.”
To attempt to satiate shoppers interest in beauty, QVC last fall launched a 24-hour beauty channel in the U.K., a first for the shopping network. Misconceptions about the consumer or not, QVC is moving the needle.
“Every time we put a brand on air, the sales increase at traditional retail. I can say that without fear of contradiction,” said George. Referring to brick-and-mortar retailers he said, “Together, we tell a story.”