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QVC expects continued domestic and global growth to push online sales to 50% of revenue.
“Our goal is to build one of the largest e-commerce transactional platforms in the world,” CEO Mike George said in a recent conference call with analysts hosted by investment firm Goldman Sachs. The call covered the retailer’s 12-month period from the second quarter of 2009 through the first quarter of this year. QVC is a unit of Liberty Media Corp., No. 11 in the Internet Retailer Top 500 Guide.
George said QVC plans to continue its online as well as overall growth through a three-part strategy:
- Building on sales from existing customers through a major upgrade of its technology platform, including new e-commerce technology that will make it easier for QVC to offer new, innovative shopping experiences and respond more quickly online to changes in customer demand; and continuing to expand its breadth of brands and product categories, including local, independent brands that it will take national and international.
- Building on the 22% of new revenue garnered from new customers over the past year, in large part by attracting new shoppers through social media and mobile commerce.
- Expanding its presence in international markets, with a planned launch of QVC Italy this October that will extend its worldwide customer base to more than 200 million households.
QVC’s new e-commerce technology platform will, among other things, improve the retailer’s ability to provide extensive behind-the-scenes content that complement its shopping videos with additional product videos, blogs, forums and other features, George said.
Social media and mobile commerce are supporting the next wave of major growth at QVC, he said. Facebook and other social networking sites have taken to new levels of growth the word-of-mouth marketing that has traditionally driven QVC’s market expansion. “Facebook is now one of our top sources of traffic to QVC.com,” he said.
At the same time, he added, the iPhone, iPad and other mobile devices are providing a new mobile experience that complements QVC’s video shopping programs. “We have yet to comprehend the potential power” of mobile commerce, he said.
George also noted that the growth in online sales as a percentage of total revenue will come as a mix of incremental and cannibalized sales. But he also noted that QVC should realize an improvement in profit margins as it transfers more of its sales to the web, as it saves the 2% to 4% of revenue allocated to the cost of taking telephone orders.
“I’m excited about our business,” George said. He added that he sees long-term growth potential resulting from the coming combination of video programs and the web across multiple viewing platforms.