Business June 2010

The Genius of QVC

How the shopping network became one of the most effective retailing machines ever invented
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Leeay Aikawa

You may not know it yet, but you want to buy something from QVC.

You disagree. You are not one of those people, trying to plug your gaping inner emptiness with cut-rate consumer goods. You are a discriminating shopper, a person of real substance, a unique snowflake. It doesn’t matter. QVC has something you want. And—odds are—has it at a price you can’t resist.

While researching this article—that is, watching QVC in earnest—I made the mistake of suggesting to my television-hating mother that she should tune in to a presentation of some Reed & Barton flatware, which she’d wanted to buy for a cousin’s wedding gift.

“You want me to buy something from the television?” Her tone suggested icy Thanksgiving dinners and rewritten wills.

And to be fair, 30 minutes later, she had not bought any flatware. Somehow, though, our family came to own three jumbo sets of Lock and Lock storage containers, in Kiwi, Fuchsia, and Coral—one for each of us, and one for my sister. Now that we each had a color-coded personal set, my mother explained, the McArdle women would never again tussle over the Tupperware.

This power to turn the most resistant foe into a QVC shopper has made the network one of the most effective retailing machines ever invented. Founded by the same man who started the Franklin Mint, the company began broadcasting on November 24, 1986, when it sold $7,400 worth of merchandise. Since then, QVC—it stands for “Quality, Value, Convenience”—has become one of America’s largest jewelry retailers and a leading importer of Irish goods, and has earned other superlatives too numerous to elaborate.

QVC’s merchandising power has nurtured blockbuster brands like Spanx body shapers—and whole sub-industries that help entrepreneurs get their products onto the shopping network (or at least claim to). The company’s allure is so powerful that Marlon Brando reportedly sought to become one of its celebrity presenters during his final, cash-strapped, obese, and depressed years.

Naturally, a company this closely tied to the decades-long American consumer boom has been hit hard by the recession. Consumer credit problems and falling sales in 2008 and early 2009 forced QVC to lay off staff, close a call center, and cut inventories. But lately, its fortunes have rebounded. In February, Liberty Media, QVC’s parent company, announced that the network’s operating income in the fourth quarter of 2009 was up about a third from its dismal 2008 level.

That’s good news for closet fans like me, who furtively watch its broadcasts without ever really buying. But it’s less clear what that says about the health and sanity of the American consumer. Does it mean we’re getting back on our feet? Or does it mean that we’re still in way over our heads, unable to pull ourselves out of our obsessive overspending?

To appreciate QVC’s consummate skill in separating its customers from their money, you have to travel to its headquarters, tucked behind an obscure office park outside Philadelphia. For $75 you can take the “All Access Tour” of its vast facility, which spans a lot the size of 15 football fields.

QVC cultivates an air of intimacy; many of its sets are designed to look like rooms in a home. Even though you already knew those rooms aren’t real, a walk into the cavernous QVC studio space still comes as a shock. Beneath crisscrossing strips of lights and cameras, 17 sets nestle next to each other—a sort of Potemkin villa. And yet the place feels eerily empty. The vastness dwarfs the stagehands and models. Only the hosts, talking merrily to thin air, seem able to overcome all that empty space. They’re the only ones who manage to look life-size.

A QVC host receives six months of training, and when you watch a broadcast close up, you can understand why. QVC hosts are not just preternaturally peppy people who can talk about anything—although they are that. They must master the details of dozens of products, and talk about them while monitoring a split screen that shows both the current shot and the next one. They must deal with a steady stream of spokespeople and customer call-ins. Oh, and they have to convince you that you want to buy a product you can’t touch or see up close.

The night before we went on the tour, my fiancé flipped on QVC in the hotel room. An earnest young woman was extolling the many varieties of Philosophy perfume.

“This one’s very spiritual,” she said. “It’s good if you’re especially prayerful.”

Even I found it hard to explain where this was coming from. The perfume in question reminds me less of God than of grandmothers and old dresser drawers. After a moment, however, her pitch started to make sense. After all, as Peter asked, how do you sell perfume on TV?



Video: Megan McArdle explains how QVC manages to sell perfume on TV

The answer is that you tell a story—a story about the viewer, and the product’s place in her life. That’s how my mother knew she wanted color-coded storage containers, and thousands of other viewers knew they wanted perfume they couldn’t smell.

Ten hours later, we stood a few feet from a buxom host as she gushed over the virtues of some nice-looking silver earrings. Her task was especially challenging, since she was selling alone. QVC hosts usually work in a team, with either a product spokesperson or another host. That fosters what one spokesperson I talked to called the “over the backyard fence” feeling of QVC broadcasts. The model is less a sales pitch than a coffee klatch where friends trade tips on hot new products. “They tell you over and over,” the spokesperson said, “you’re having a conversation with the host.”

So, apparently, are many of the viewers—at least in their heads. As one young woman said about her grandmother, whom she was accompanying on the tour, “She talks about them like they’re her friends.” Her grandmother also buys half a dozen items a week. QVC is expert at creating what consumer psychologists call “parasocial relationships”—bonds that tickle our subconscious in many of the ways that real friendships do. And as anyone who has ever been to a Pampered Chef home selling event can testify, when a friend is pushing the goods, it’s very hard not to buy something.

Projecting that sort of intimacy when you’re alone on a set isn’t easy. As if we weren’t watching, the host checked her camera angles, and ran her fingers over the earrings while chatting gaily to the open space. “It’s almost like they’re coins you’ve been collecting for years, and you had them made into jewelry.” She beamed at the camera. “There’s a very Aztec feel.”

I’m pretty sure that the Aztecs didn’t have metal coins, but whatever: QVC isn’t selling the earrings so much as the feeling that you’re the sort of person who might spend years collecting coins, and then whimsically turn them into jewelry. All commercials foster some illusion about yourself, of course, but on QVC the illusion is four to six minutes long and runs while you shop.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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