QVC: How a media, retailing hybrid approaches digital transformation

Alex Miller, senior vice president of digital commerce at QVC, talks with ZDNet about pitching on multiple platforms and walking the line between being a media company and ecommerce player.

Is QVC a media company or a retailer going through a digital transformation? The answer: Probably a little of both.

That's one big takeaway from my chat with Alex Miller, senior vice president of digital commerce at QVC. QVC is either a media company that has figured out how to build a non-advertising based revenue stream or a retailer using media to differentiate from Amazon.

Some stats worth pondering from QVC's annual report:

  • 76 percent of new US customers made their first purchase through QVC.com including mobile.
  • QVC has $8.68 billion in annual revenue (2016).
  • And 52 percent of sales derive from ecommerce.
  • QVC has shipped more than 1.95 billion packages in the US since inception. QVC has nine distribution centers and seven call centers.
  • 91 percent of orders are shipped within two days of order placement.
  • QVC reaches 104 million television households in the US and has programming over the air in 93 markets and is available on Roku, QVC.com, and other platforms.
  • QVC reaches 137 million television households outside of the US.
  • A joint venture in China reaches 121 million homes.
  • 93 percent of shipped sales globally were from repeat and reactivated customers.

With those nuggets out of the way, we caught up with Miller to talk shop. Given the retailing turmoil (and, yes, media too), QVC makes for an interesting stop. Here are some of the highlights:

The digital shift: When you boil it down, QVC is seeing the customer and business shift to digital, but the core business model hasn't changed, said Miller. QVC engages with customer through video and sells stuff and remains a direct-to-consumer brand that manages price and inventory via multiple touch points. "That core is in place even as we light up apps and over the top," said Miller.

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"We are making ourselves a primary digital first experience and translating a brand experience we have," Miller said. What has changed is the number of platforms available to consume content. "The fragmentation is starting to accelerate," said Miller. "We have to be discovered on any platform and have seamless purchasing. Merchandising and content strategy evolves for the fragmentation."

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However, QVC is still "more of an entertainment driven experience" that features "relationship-based shopping," added Miller. "Our customer isn't coming to us just to buy something."

Metrics: QVC tracks frequency of visits, a metric that's a retailing staple, but also time on site. "Time on site is a non-traditional retailing metric. We look more like a media company that way," Miller said. "Do we grow that and try to get more time on the platform? It depends. Too much time means something wrong is with the experience (because no one bought anything)." As a result, QVC is looking to increase the frequency of visits across the platform while holding time on site steady. Multiple platform presence should boost frequency.

Amazon competition: "Any retailer has to see Amazon as competition at some level," Miller said. "What's different with us is that the Amazon customer goes there with an intent in mind. Our customers come to us to discover something new and be in a community of shopping."

Mobile: QVC is "laser focused" on the mobile experience and has invested for the last decade. Now the stars are aligning for mobile video QVC is in a good position, Miller said. "Video on mobile is a consumable medium now. Mobile wasn't ready before. It's a thing now," Miller said. To deliver this video, QVC has primarily spent its time on apps because the experience is better. The mobile web doesn't deliver the integrated shopping and video experience yet.

The fragmented media experience: QVC has to be multichannel in both the commerce and content fronts. "In our early years we were operating on platforms we owned and operated like TV and the web sites," Miller said. "Now we have to continue that and also operate on Facebook Live, Apple and Google Android. Those platforms could make the retailing business challenging by taking a cut of sales. What makes me feel ok is that those platforms are in line with our customer base."

Over-the-top entities also play into the fragmentation, but QVC owns its content so the model is easier, Miller explained. QVC doesn't have a bunch of distribution agreements to ink. "We can quickly spin up versions for Apple TV, Roku, and others," he said. "We can't assume what any one customer is using, but have to personalize the experience to the appropriate device." Facebook Live is also a platform that looks promising. Miller said QVC has seen success with its beauty programming on Facebook with younger audiences.

"We have to constantly challenge the teams to find new ways to get to the customer and meet her in different places," Miller said.

Development: QVC handles all of its development in house with a global team in multiple markets. On the talent front, QVC is looking for people who know user experience and how to connect to a customer. "We're not necessarily looking for people from the retail model," said Miller. "Because we're not attempting to create a truly differentiated search or cart. We want to build the discovery phase of the funnel." As a result, QVC is just as likely to hire a financial services person as a retail-based one.

One tech wish: Miller said one tech problem he'd like to see solved by vendors is to create tools to allow designers to design directly on a phone. "The mobile phone is not great for designing or coding," Miller said. In other words, it's one thing to emulate a mobile device in Adobe Photoshop and another to live the focus the small screen requires.

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