It reaches 106 million customers and profits are soaring, despite the economic downturn. Can things get any better for shopping channel QVC?
It's Christmas time at QVC. But then it often seems to be Christmas time at QVC. It is 25 November when I visit the HQ of the home shopping channel in Battersea, south London, and it is gearing up for its Big Christmas Weekend. That's different from Early Bird Christmas; that was 25 September. Or Christmas In July, which took place on 25 July. "If there's a 25 in the month ? there'll be Christmas," says Dermot Boyd, QVC's twinkly CEO. "It's the best time of year for us. We do make a feature of it." The channel's buyers, almost 100 of them, have already done their buying for Christmas 2011. You can see why.
But then QVC has reason to feel extra-specially Christmasy this year. Profits are up 6%, and it is now the UK's most widely distributed retailer. One-in-four homes have had something dispatched from its mile-long Liverpool distribution centre, one that's six times larger than Wembley Stadium. Last year it handled 15.1m calls, generating �368m. Six weeks ago, it launched a second channel, QVC Beauty, to tap into the UK's �16bn lipstick and mascara market, which has proved impervious to the recession.
"The demand for beauty over the last couple of years has been incredible," says Kate James, head of buying for the channel. Her clients agree. "On a good day, we've done �1m on QVC," says Andrew Rodgers, European marketing director for cosmetics company Bare Escentuals. "That would take a year in a department store."
QVC now reaches 106 million customers across five countries (QVC Italy opened in September, joining Germany, Japan and the original US parent company) with new-customer growth at a 10-year high. Just in time for 2011: QVC's 25th anniversary.
This will be the economic downturn, you'll be thinking. With no money left to leave the house, people are slumped in front of their digital TVs, morosely dialling up for cut-price Butler & Wilson PVC mock croc skin shoulder bags or Jack LaLanne compact power juicers. QVC has heard that one before. "It's not to say QVC does better in a recession than a boom," Boyd says carefully. "But relative to other retailers, it's a very resilient model. In the UK, we were founded in a recession, in the 1990s. And we grew successful in that." But QVC's biggest recent success may be one that's harder to put a figure on. That's a subtle brand repositioning.
The Apprentice's memorable 2007 candidate Katie Hopkins may have spoken for many (though perhaps not in quite the same language) when she described QVC's audience as "bored, big-boobed housewives called Mavis", balking at having to go on and sell plastic footspas and chocolate fountains (her amiable Apprentice rival Simon Ambrose faired better, going for the high-risk strategy of the pricier folding wheelchair). The perception was that QVC sold cheap tat, cheaply. Seventeen years ago, that may have been hard to argue with: when QVC UK launched, its must-have item was a yellow alarm clock shaped like a Volkswagen Beetle. Today, it stocks boutique-level beauty brands Decl�or, Elemis and Bobbi Brown, alongside Bose stereo equipment and 3D-ready plasma TVs.
In April, it sold �1m worth of Dell notebooks in 24 hours. Before that it had some �19,000 necklaces for sale (it only sold two, but then you only need to sell two ? the Simon Ambrose model). Marco Pierre White, Jemma Kidd, Lulu Guinness ? and, indeed, Lulu ? have all appeared on QVC, selling their own product lines. In the US, the channel has courted upmarket vendors such as NARS Cosmetics, while Mad Men costume designer Janie Bryant launched her collection on the channel. With co-sponsorship from Vogue, celebrity stylist Rachel Zoe recently helmed a New York fashion week show during which, noted QVC's US merchandising boss, "the inventory kind of evaporated".
That's not to say QVC is ever going to be confused with the Beverly Hills appointment-only boutique The House of Bijan: in the UK, the median purchase price remains �35-�40. You might recall the laughter directed at James Arbuthnot, chair of the House of Commons defence select committee, during the MPs expenses' scandal, when his claim for a four-piece garlic-peeling set was revealed ? bought from QVC for �43.56. But at least it wasn't a yellow alarm clock shaped like a Volkswagen Beetle.
"In the early years, TV shopping had a negative connotation that came from the US, because they had a lot of infomercial channels that made unrealistic claims," says Boyd. "Here, the Advertising Standards Authority regulates very strictly what you can say. We think that's a good thing. We do a lot of work measuring brand recognition and, actually, in the UK, people don't have a negative [opinion of QVC]; but they don't have a positive. That's an OK starting point."
This year, Boyd set out to build on that, to "raise the profile of the company". In February, he handed a �500,000 contract to the PR firm responsible for Channel 4 and BAA. Their brief was to reposition his presenters as experts in their field, and build awareness. There have subsequently been a number of those PR perennials, the consumer survey, making their way into the papers. In June, thanks to a QVC-commissioned poll, we learned that 10% of the country "would rather give up their partner than their TV"; and then, in July, that women "are at their most beautiful at 31". But that was small fry compared with November's bright idea: within hours of William and Kate's marriage announcement, QVC had dug out an Epiphany Platinum-Clad Diamonique oval cluster ring, branded it "The Royal Engagement Look" and watched sales jump 800%. It has been sold-out ever since. To HRH: a priceless family heirloom. QVC price: �34.42. "We probably sold �40,000 worth of rings with a blue stone," says Boyd. Who would buy such a ring? "One assumes it's people who approve of the royal couple," says Boyd, smiling. "I think it's the feelgood factor."
Then there is 2010's most surprising innovation: pop stars going on QVC to sell their albums. In February, the famously shy and retiring light entertainment polymath John Barrowman suggested he come on to promote his new collection of songs from musicals, selling 1,000 copies in the first three minutes. He was already a QVC devotee (he got his shopping card out on air to prove it). Where Barrowman leads, others can only follow. Charlotte Church, Jamie Cullum and ecclesiastical supergroup the Priests subsequently all launched their new albums on the channel. You can see the thinking. With few CD shops and even fewer music shows left, here's an hour to sing live, have a nice chat and, in Church's case, not be asked any awkward questions about Gavin Henson.
"You have to take advantage of the promotional opportunities there are," says the Priests' Fr Martin O'Hagan. "A lot of people don't go down the street to do their shopping any more." Boyd says that currently "all the main record companies are talking to us", while QVC's PR says the labels have told them "what a relief it is . . . how it's been an absolute nightmare to find new platforms". In May, the Official Charts Company changed the rules to allow QVC sales to contribute to the Top 40. You don't have to be Paul Gambaccini to spot that QVC's acts have all come from one place: the middle of the road. You're not going to see Mot�rhead on there. Or are you? "Actually, metal's interesting, because a lot of metal fans are in their 40s ? our core audience," says Boyd. "Mot�rhead in full-flight wouldn't work, but maybe Lemmy acoustically. Rap would be tricky, though if I got Dizzee Rascal I might be tempted."
QVC was started in Pennsylvania in 1986 by Joseph Segel; founder of the coin and memorabilia supplier The Franklin Mint. Having watched a videotape of the Home Shopping Network, he felt he could do better. Segel insisted his presenters sell by informing. They would have to gen up on their products beforehand, and there would be no staring down the camera, hard-selling ? the high-pressure tactics of the infomercials were out. Products were never "cheap", "cheaper" or "a bargain", but "good value". The presenters should convey the idea that they're shopping with a best friend.
"I look for voice tonality," says Tina Halvorsen, QVC UK's guest presenter manager. "Lots of our viewers keep QVC on all day, like a radio."
As any Apprentice fan knows, producers constantly direct their presenters via an earpiece. In the gallery, a live database tracks precisely how well a product is selling, and how much stock remains. Anything that triggers a sales spike ? a certain phrase, or stroking a jacket's lining ? is encouraged to be repeated. If sales-per-minute numbers are not good enough, it's on to the next item. An underperforming product might get a second chance in another time slot. After that, it's out.
"Even if you're presenting something that you personally don't like, the head you have to put on is: 'Well, my neighbour across the street would'," says Julia Roberts, QVC's longest-serving presenter (no, she's not that Julia Roberts). "You do a Worzel Gummidge."
Roberts used to be a hostess on The Price is Right with Leslie Crowther. Before that she was a cabaret dancer, supporting Cannon and Ball in summer season in Guernsey. For her QVC audition, she was given a pencil. "They said: 'Now sell this for five minutes.'" Her audiences love her. They come and chat in the supermarket. "Then you can see them thinking: 'I don't actually know you! I feel really stupid!' I take that as a compliment. They think I'm their friend." Judging from the number of enthusiastic montages on YouTube, she's also got more male friends than QVC's demographic would suggest. "I don't even want to know!" she wails.
Halvorsen gives me a tour of the building. It's like a village and is home to 500 planners, buyers, set builders and producers ? all making 17 hours of live TV, 364 days a year. Everyone is very cheerful. Behind one door, a team have been prepping Christmas puddings since 7am.
"Hello, Tinee!"
"Hello, guys! How's everyone?"
"Oh, busy, busy!"
In the gallery we watch Dale Franklin ? son of one of the Wrigley Doublemint twins ? selling gold rings. "One thing you never hear us say on QVC is, 'Buy these as an investment because they're going to go up in price'. We don't know. Buy it because you love it. Buy it because it's something perhaps you want to pass down to your family . . ."
"'You're saving over �300 . . .'" nudges his producer, James Faulk.
"�686 regularly," Franklin parrots. "Now it's �374 ? the one-time-only price . . ."
Faulk glances at his database. "Dale, we've lost 'R' for 'romance'," he says, indicating the sold-out ring size. "We've got S, T, V only . . ."
Halvorsen turns and beams. "I always say QVC is like a jigsaw puzzle: you need to look behind the scenes to see how it all fits. It's such a hard combination, isn't it?: broadcasting and selling."
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