Managerial Expectations for Technology at QVC, Inc.
During the early 1990s, tens of millions of American consumers gained access to cable television and a number of retailers took note of this technological innovation by launching cable television programming featuring their products. These new shopping venues quickly became enormously popular with many consumers because of their convenience, value and wide range of merchandise. One of the companies that emerged from this initial foray into unknown marketing waters was QVC, Inc., which has used emerging technologies to grow its business in innovative ways. To determine how managerial expectations for technology have affected QVC’s growth in recent years, this paper provides a review of the relevant literature concerning past expectations as well as how current technologies are meeting the company’s business needs. A summary of the research and important findings are provided in the conclusion.
Review and Analysis
By the early 1990s, nearly two-thirds of American consumers had cable television in their homes (Copley, 2004). Founded in 1986 by Joseph Segel (also founder of the Franklin Mint), QVC, Inc. (hereinafter alternatively “QVC” or “the company”) has grown its business by taking advantage of this emerging technology to improve the retailing experience for tens of millions of loyal customers. Standing for “quality,” “value” and “convenience,” QVC’s management team has leveraged the home shopping channel into a global enterprise that includes the United States, Latin America, Asia, and Europe (Copley, 2004). The business model has been enormously successful, and QVC even established a sales record for a new public company in American business history during its first full year of operation (QVC at a glance, 2012).
Today, QVC carries a wide range of products comparable to those found in large high-quality department stores, but it reaches far more customers with its televised programming than its competitors. In this regard, Lawrence (2010) reports that, “QVC is the digital television channel which broadcasts 24 hours a day, 17 hours of them live, selling everything from bed linen to garlic peelers, facial bullworkers (a machine to exercise those saggy jowls), joints of beef, computers and pearl necklaces to millions of viewers every day” (p. 70). According to the company’s promotional literature, “Reaching more than 98 million U.S. households and approximately 195 million cable and satellite homes worldwide, QVC became the first multimedia retailer to offer a native high-def service to customers in May 2009″ (QVC at a glance, 2012, para. 2).
While QVC remains committed to its televised sales programming, the company’s online services at QVC.com are also enormously popular (Parsons, 2008), with more than 6 million monthly visitors (QVC at a glance, 2012). Furthermore, QVC in Germany and the United Kingdom have both launched their own highly popular interactive Web sites as well (Copley, 2004). To its credit, the company also ensures that televised programming is culturally sensitive and appropriate to its setting through the use of local national producers and on-air personalities, all with an overarching reliance on technology to support the process. For instance, Lawrence reports that in the United Kingdom, “The QVC set-up is incredibly swish; a three-storey, ultra-modern office block near Battersea power station, with three TV studios, all linked electronically to an enormous warehouse in Liverpool, from where stock updates are relayed through to the on-air presenter” (2010, p. 70). This business model, replicated in other venues, has provided the company with a competitive advantage by reducing the number of humans that are involved through technological innovations. In this regard, Lawrence adds that, “Far from being the last resort of the underemployed, QVC is now adored by the middle classes too. And unlike most shops, QVC doesn’t need armies of sales staff. Instead, there are just 25-odd presenters, a cross between Generation Game hostesses and air stewards” (p. 70).
The company has also used technology in other ways besides its online QVC.com offerings and its televised productions to grow its business. Managerial expectations for the role of technology at QVC have expanded to include a series of brick-and-mortar retail stores across the country with plans in the works for more in the future. At present, the company has a “Studio Store” located at QVC headquarters in West Chester, Pennsylvania that features merchandise seen on the company’s televised productions and online as well as six other retail stores in Pennsylvania, Delaware, North Carolina and South Carolina that carry the same product lines (Retail stores, 2012). Moreover, the company adds more than 500 new products to its online, on-screen and retail lines (Lawrence, 2010) and more than 40,000 new customers every week (Copley, 2004).
This sustained level of success, though, has not been without its challenges, particularly during the early years of the company’s operations when it engaged in a series of costly legal maneuvers in an effort to improve its broadcast capabilities and either acquire or outperform its competitors such as The American Shopping Channel (Cox Cable), the Video Shopping Mall, Sky Merchant (Jones Cable), Cable Shopper’s Network, Shop TV (J.C. Penney), and the Consumer Discount Network (Parsons, 2008). Moreover, the company experienced the natural consequences associated with significant organizational change when it transitioned from satellite programming to digital programming in 2003 (Lawrence, 2010).
Despite these constraints and challenges, though, one way the company has succeeded in achieving a competitive advantage for this purpose has been its increasing use of social media networks such as Facebook and Twitter to promote its various product offerings, growing its online consumer base by 300% in the process (Kunz & Hackworth, 2011). The company has also used technology in ways that are difficult for its competitors to duplicate. For instance, QVC has even sponsored its own “wellness doctor,” Nobel laureate Fend Murad (recipient of the 1998 Nobel Prize in Medicine or Physiology) in their televised productions to promote sales of Murad’s book, The Wellness Solution. According to Grens (2007), “It’s a huge, huge audience. They reach more homes than CNN…we wanted to try and get the word out. It’s working: In the first week nearly 15,000 copies of The Wellness Solution sold, with the author logging just 40 minutes of air time” (p. 24).
Taken together, it is reasonable to conclude that technology has played a formative role in helping QVC achieve its success to date. Managerial expectations for technology at QVC have been responsible for this success, and the company has modeled the way for others by developing a business model that is sufficiently flexible to accommodate hundreds of new products each week while maintaining a sophisticated infrastructure that is networked in real time and which provides business managers with the feedback they need to make informed and timely decisions. In the final analysis, the quality, value and convenience at QVC, Inc. are all tied directly to the technologies that provide these attributes which are fulfilling the company’s marketing and supply chain needs today.
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Grens, K. (2007, March). A nobelist’s QVC debut. The Scientist, 21(3), 23-24.
Kunz, M.B. & Hackworth, B.A. (2011). Are consumers following retailers to social networks?
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Lawrence, J. Lights! (2010, December 9). Camera! Now flog those garlic peelers! Behind the scenes at QVC, the shopping channel that’s seduced the middle classes. The Daily Mail,
Parsons, P.R. (2008). Blue skies: A history of cable television. Philadelphia: Temple University
QVC at a glance. (2012). QVC, Inc. Retrieved from http://www.qvc.com/.
Retail stores. (2012). QVC, Inc. Retrieved from http://www.qvc.com/.