Business June 2010

The Genius of QVC

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

Unless you’re an uncommon tightwad, shopping produces a pleasurable sensation in the brain. Dopamine receptors light up, as the brain anticipates the reward of a shiny new object—and the more objects they have to contemplate, the longer our receptors are kept in an agitated state. When you’re watching QVC, the hosts provide social cues that enhance these sensations, inviting you to imagine all the ways that you might use the product—amping up the anticipated reward.

Meanwhile, they stress the status-enhancing aspects. Compulsive shoppers (most of whom seem to be women) tend to zero in on jewelry, makeup, clothes, and consumer electronics—in other words, status goods. The hosts play up how the products will improve your appearance or your parties, or, when given as gifts, endear you to your friends.

Disastrously for compulsive shoppers, QVC shopping strips away the negative cues, separating the pain of paying from the joy of buying. All transactions are handled electronically, which, studies show, makes them seem less real; that’s why so many people get themselves into trouble with credit cards. QVC takes this one step further with its “easy pay” system, which allows shoppers to split the cost over as many as five credit-card payments, without incurring any finance charges.

Lots of stores take credit cards. But only QVC strips away all the negative cues. Compulsive shoppers can get a huge rush out of buying, but they also may feel deep shame about their spending binges. The anonymity of QVC’s automated ordering allows them to avoid the shame—yet QVC still provides those “parasocial relationships,” a simulacrum of the camaraderie that most women enjoy when shopping with friends. There are no good data on what percentage of shopping-network customers are spending too much (my fiancé would say “All of them”). But some analysts think that compulsive spending is on the rise, in part because we are richer, but also because the Internet and the shopping channels stimulate it.

The QVC process is so finely calibrated that a producer watches call volume in real time; whenever it spikes, the host hears a voice in his or her ear: “Whatever you just said, say it again. It’s working.” The lessons are disseminated to other hosts, and to the product spokespeople, who must spend hours training before they may present their products on air.

QVC has not created any of these techniques; it has only mastered them. Which is why QVC’s relationship with its customers tells you a lot about what America has been doing for the past 20 years or so. More and more buying on credit, fewer real-life interactions, a proliferating array of products to tempt us—and of “new media” outlets allowing companies to better target their audiences with parasocial fantasies. No wonder we’ve got a bit of a hangover.

But the people on my tour didn’t go away disillusioned after learning the art of the hard sell; as soon as the tour was over, they gang-rushed the QVC Studio Store.

I shouldn’t have been surprised, really, since most of the QVC fans I know savor the variations on the hard sell. In fact, that’s part of the fun; you can’t help but enjoy the skill with which they sell you things you don’t quite need.

Unfortunately, it’s not so enjoyable for the substantial minority who can’t control themselves when access to credit (and new goods) is too easy. Worse, more and more Americans seem to have lost that self-control, which is why our household savings rate fell to barely 1 percent five years ago. That’s bounced back to 4 percent—better, but nothing compared with the more than 10 percent in countries like Germany and France. And though the total amount of Americans’ outstanding credit-card debt has fallen, a recent survey by the site Card Hub implies that this decline is largely due to credit-card companies’ write-offs of bad debt, rather than consumers’ reductions in spending. In retrospect, the idea that the Great Recession would dramatically alter our spending habits seems as wishful as the idea that 9/11 heralded a lasting change in our civic conduct.

But QVC is hardly to blame for our abiding profligacy. With more than 50 million QVC customers worldwide, the majority of them in the United States, simple arithmetic suggests that most of the network’s shoppers are probably not addicts. Their dopamine rush is innocent fun—no less valid, and considerably safer, than the same sensation obtained from rock climbing. Besides, many of the customers use the channel the way my small-town relatives do: to get goods of higher quality than they can buy locally. Indeed, the company’s unparalleled ability to mass-merchandise even fairly specialized goods means that almost anyone can find something she can’t get elsewhere.

As I snooped around the QVC store, trying to figure out whether perfume can really bring you closer to God, Peter wandered into the housewares section. A moment later he wandered out again, clutching a device that I’d never seen before—a double-ended grinder, one side for rock salt and the other for peppercorns. “Look at this!” he said. Then, seeming to realize what he’d done, he thrust it into my hands and looked away.

The combo grinder, it turns out, is an astonishingly useful thing to have next to your stove. It hasn’t revolutionized our cooking. But it’s made things, well, just a little bit better. It lacks only one thing to make it perfect, and that’s for Peter to admit to other people where he bought it.

Megan McArdle is The Atlantic’s business and economics editor, and the editor of the business channel at TheAtlantic.com.
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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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