Deborah Mance and Mary LaValley were on edge in QVC's green room, a backstage lounge with a television tuned to the home-shopping show that runs night and day, every night and day. Their product, the Arccivo, a nextgeneration scrapbook system, was making its QVC debut this year. For innovators, entrepreneurs and large retailers with new products, the QVC campus in West Chester, Pa., is Mall of America, Hollywood and Broadway rolled into one. And for the Arccivo, it was showtime.
QVC requires all products it showcases to be stocked in one of its warehouses. There were thousands of Arccivos on hand. On-air host Donna Downey had three minutes to sell them all. Downey was miked to a crew backstage. Controllers at a bank of computer panels tracked the customer calls as Downey demonstrated and described the Arccivo's features. Certain words triggered more orders. Controllers told Downey to emphasize hot-button phrases. In this NASA-like atmosphere, Downey was getting real-time feedback on national consumer behavior.
Mance, who invented the Arccivo with friends LaValley and Pam Hester (who was on vacation at the time the product went on air), was transfixed to the monitor.
"We could see how many calls were coming in," she says, "how many (units) were sold, and by color. I thought Donna did a good job hitting all the points, given the time she had."
THEY KNOW THE DRILL
After 21 years of hawking all manner of home gadgets, clothing and jewelry, QVC has on-air selling down to an exacting science. Rivals such as the Home Shopping Network and ShopNBC work much the same way as QVC. But the big Q, with some $2.6 billion in profits last year on more than $7 billion in sales, remains the industry's gold standard.
QVC debuts 250 new products a week - that's 13,000 a year. The network has a voracious appetite for the new and the novel, things that will prompt the channel's potential buyers in 166 million homes worldwide to pick up the phone and place an order. For new-product developers, QVC's open-for-business ethos offers an enticing opportunity. But there's a catch. QVC is extremely finicky about what it will accept on its show. QVC traffics in home, apparel/accessories and jewelry categories. And all the merchandise has to be polished, perfect and ready for prime time, as it were. The network's high standards for quality assurance is the reason its product-return rate is the lowest among its competitors.
QVC's closest rival HSN, which reaches 89 million U.S. households, reported "disappointing" earnings results last year, in large part to higher return rates.
QVC parent company Liberty Media LLC indirectly owns a 24 percent equity stake in HSN's corporate parent IAC/InterActiveCorp., but the two shopping channels have no direct business ties. IAC in November announced it was spinning off HSN among five separate business units effective the third quarter of 2008. After posting a string of lackluster revenue returns, HSNreported 5 percent sales growth in the third quarter ending Oct. 31 this year.
In its most recent quarterly report, Liberty Media noted QVC's revenue increased 4 percent to $1.69 billion, while operating cash fl ow increased only 1 percent to $383 million.
"While we are disappointed with our second quarter results," said QVC CEO Mike George, "our U.S. business continued to grow but at a reduced rate, driven in part by . continued challenges in the jewelry category."
The company recently launched new branding and Internet initiatives, including a national marketing campaign. Meanwhile, QVC says it remains committed to quality assurance.
Keeping quality high translates to keeping product returns low. It also makes it more of a challenge to get your product through the door. So like Oscar hopefuls, often it's simply an honor getting nominated to appear on QVC.
Mance, LaValley and Hester got their Arccivo inside the QVC fort in part because the scrapbooking system was one of the featured products on Everyday Edisons, the series about inventors airing on PBS.
The network's principle product gatekeeper is Marilyn Montross, director of vendor relations. Get her OK, and you're on QVC, or at least your product is.
But unless you're representing Procter & Gamble, Dell or some other corporate consumer giant, don't bother calling her or her staff of a half-dozen product evaluators.
"Clearly, if you are fairly large brand, it's not very hard to get QVC's attention," she says. "If you have a new product and are fairly small, the
best way to get QVC's attention is to go through our Web site," www.qvcproductsearch.com.
If you're a small player, it also helps to use any number of productrepresentative companies. Some work exclusively with QVC. Prudent product developers will check the background of these firms - be sure to ask what products they've successfully pitched to QVC. The channel also hosts periodic product search events. And, beginning in 2008, QVC will be attending casting calls for Everyday Edisons.
No matter how you get your product to QVC, Montross says her team looks at every one that's submitted.
"And everyone gets a response," she says. "If it's positive, you'll get a phone call. If not, you'll get a form letter."
In its 2007 "Who We Are" promotional brochure, QVC played up its stable of Hollywood and fashion designer celebrities. Supermodel Heidi Klum is seen splashing in a pool at the Beverly Hills Hotel. "Queer Eye for the Straight Guy" cast member Carson Kressley and Joan Rivers mug in one spread. Even Cal Ripkin Jr., it's noted, celebrated his induction to the Baseball Hall of Fame on QVC.
Yet for all that star power, Montross says QVC is always on the look out for fresh, anonymous faces.
"The customer really enjoys meeting the entrepreneur, the person who's the inventor or designer," she says. "It makes for more interesting television and a more honest approach to selling the product. The customer loves to root for the entrepreneur - they see themselves or their brother-in-law or someone they know in that role."
While QVC may embrace new talent, you can't just show up and wing it. The network requires the unschooled to enroll in its training courses. You take an online training class to familiarize yourself with QVC operations. Once closer to your air date, you come at its West Chester headquarters for classroom instruction. That includes a taped practice run and one-on-one coaching with a QVC professional.
Alternatively, QVC has a stable of its own in-house talent to present products on air. Mance, LaValley and Hester - the trio who made the Arccivo - would have liked to have pitched their scrapbook themselves. But three's a crowd and in the end, they decided it best to have a QVC pro at the helm. QVC eschews high-powered, over-thetop sales personalities. You won't see, for example, Billy Mays, the king of the as-seen-on-TV salesmen (see sidebar on pg. 19).
"We try to shy away from those folks because they tend to give a hard sell," Montross says. "We insist on a low-key approach. We would rather a customer watch for 30 hours before making a purchase, rather than do an impulse buy after a hard sell and have buyer's remorse. We look for the customer for life."
A FEW CRUCIAL MINUTES
Products on QVC get a few minutes to sink or swim. Three to four minutes is the norm. Some products get the rare opportunity for a shot of 10 minutes of air time.
Even if your product fails to fly off QVC's shelves, that doesn't mean all is lost. QVC tries to extend product life cycles as long as possible.
"One of the tricks," says Montross, "is not airing it to death. We'll put it on air, and you may not see it for another six weeks."
Products that make it through the QVC crucible emerge with street cred. Inc. Magazine noted in a piece a few years ago that veteran inventor Bob Albertson's water-purifying coffeemaker sold a modest 4,000 units when it had its shot on QVC. Target and Wal-Mart, which had rejected Albertson, decided to stock his product after it aired on QVC. Why? It had been "field tested," he told Inc.
Products also can find shelf life on QVC's Web site, which accounted for 20 percent of QVC's revenue last year. The channel also will support some companion products, such as a line of cosmetics, that aren't shown on air.
