E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Fulfilling a promise to be everywhere shoppers are, QVC tests mobile commerce in all its formats.
Wherever a shopper is, QVC wants to be there. On TV, online, on a social network, in a foreign country—QVC does not want to miss an opportunity to engage shoppers and to try to sell them some merchandise. The company calls this strategy QVC Everywhere. In 2008, as part of this strategy, the retailer pioneered technology that truly fits the moniker "everywhere." It went mobile, adding an m-commerce web site and a text message program that enables consumers to purchase products via text, setting itself far apart from the competition. And last December it added an iPhone app, with BlackBerry and Android apps coming soon.
"We know from our research and experience that our customer wants a breadth of choice in access to QVC, and that she is a powerful user of mobile. So mobile commerce was a natural extension," says Angie Simmons, executive vice president of multichannel platforms. "People went from using mobile as a calling service to text messaging to using it for the Internet today, and now engage with mobile for entertainment, information and education. Our customer is making a very similar transition, especially as people adopt smarter phones."
QVC Inc. has adapted its mobile strategy to keep pace with the evolution in how its consumers use their mobile phones, moving from text messaging to a mobile site then a mobile app. In so doing, the retailer has learned lessons about selling via mobile that can benefit other retailers, including the need for many departments to be represented when developing m-commerce, and the importance of listening carefully to the savvy and often well-heeled consumers buying today's most sophisticated mobile phones. It went so far as introducing an updated version of its iPhone app based on such feedback.
And QVC has a great many consumers to listen to. It's the powerhouse of TV retailing, hitting $7.37 billion in total net sales in 2009. Years ago it added the web, which last year accounted for 29% of sales in the U.S.
Then came mobile. It declines to reveal how much it's selling through the mobile channel, but says things are looking up. "Sales are progressing—we are seeing rapid adoption of mobile commerce," Simmons says. "And the iPhone app really gave mobile a boost."
Home shopping is very much an impulse purchase, and mobile technology lends itself to impulse buying at QVC, says Sucharita Mulpuru, Forrester Research Inc. vice president and principal analyst.
Mulpuru cautions that m-commerce is still young, and that most retailers should not expect an enormous payoff in the immediate future. But she says those merchants that can match the right offering with a particular customer behavior can be successful, and that QVC is on target with its program that enables purchasing via text message.
"While text messaging has skewed young, you're hearing a lot more about people such as middle-aged women using the technology," she says. "Text messaging can speed the process of completing an order compared with making a phone call or going to the e-commerce site, and that fits well with the impulse home shopper."
No Internet required
QVC, which describes mobile commerce as "a modest investment" and declines to define modest, made a splash on the m-commerce scene in July 2008 when it introduced its site and especially its text message program, Text Ordering. It became one-half of an elite group of two, the other being Amazon.com Inc., to enable any mobile phone user to electronically purchase goods without the use of the Internet, as text messages travel over wireless voice lines.
So, for example, a shopper is lying on her couch in her living room watching QVC. The hosts are showcasing an item she likes. She already has an account with default payment and shipping information and has registered her mobile number with the retailer. No need to go to her computer or make a phone call. She texts ONAIR to QVCGO, QVC's short code—an abbreviated phone number used in text messaging. Within seconds she receives a reply text message asking her to confirm her order, which she does with a second text message. QVC sends a final text message confirming her order and informing her of an estimated delivery date.
A shopper can make other purchases via text, too. She can text a product number to QVCGO. QVC sends a text message back with the item number and price and a request to verify the purchase. After the customer verifies the purchase, the retailer sends her a confirmation. And she can text TSV to the short code to purchase Today's Special Value. Further, a shopper can add items to her e-commerce site-based wish list by texting WISH and an item number or WISH and TSV or ONAIR to the short code.
Some might think that a system that makes the purchasing process so easy and quick would catch on and be used by more than just two retailers. But experts say buying through a text message is a huge shift in customer experience from online and even mobile web purchasing, and say most retailers believe customers want more when shopping.
"The technology is there, and you can do text message purchasing easily enough, but people want a shopping experience that is to some degree rich with information," says Vikrant Gandhi, strategic industry analyst, mobile communications, at research and consulting firm Frost & Sullivan. "It will take a longer time for something like this to catch on."
At the same time that it introduced Text Ordering, QVC launched its fully transactional m-commerce site, m.QVC.com. It highlights Today's Special Value, Item On Air, Items Recently On Air and New Today, along with a box in which customers can enter an item number. The site also features a guide to QVC's television programs.
Additionally, the site offers a function designed to quicken the purchasing process, which is crucial as consumers don't want to input a lot of information on the small keyboards of mobile handsets. Speed Buy only requires a customer to enter her customer identification number or e-mail address along with her PIN to immediately purchase a product.