The Special Value on QVC

III
The Special Value on QVC: An Analysis of Factors
That Affect Home Shopping Revenue
A Thesis
Submitted to the Faculty
Of
Drexel University
By
Azamir Latriel Green
In partial fulfillment of the
Requirements for the Degree
Of
Master of Science in Television Management
September 2015
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Copyright 2015
Azamir L. Green
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Dedication
To my immediate family, Mom, Dad, and Ty, I am so thankful to have you guys in my
corner. There is nothing I look more forward to other than making you all proud.
To my extended family and friends your prayers and support are greatly appreciated.
To my best friend, Mark thank you for every alley-oop, and for being the glue that held
my broken pieces together during this journey.
Because of you all I didn’t give up!
I Love You All!
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Acknowledgments
Thank you to my Thesis Advisor, Phil Salas and my Program Director, Albert Tedesco.
You both have helped me through this graduate experience and I appreciate your patience
and guidance throughout my graduate studies and thesis writing process.
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Table of Contents
List of Tables ............................................................................................................... vi
List of Figures ............................................................................................................. vii
List of Appendices .........................................................................................................v
Abstract ...................................................................................................................... viii
1. INTRODUCTION .....................................................................................................1
1.1 Introduction ..............................................................................................................1
1.2 Statement of the Problem .........................................................................................3
1.3 Background and Need ..............................................................................................5
1.4 Purpose of the Study ................................................................................................7
1.5 Research Questions ..................................................................................................8
1.6 Significance to the Field ..........................................................................................9
1.7 Limitations .............................................................................................................10
1.8 Definitions..............................................................................................................11
2. LITERATURE REVIEW ........................................................................................12
2.1 Introduction ............................................................................................................12
2.2 HSN- Home Shopping Network, Inc. ....................................................................12
2.3 QVC- QVC, Inc. ....................................................................................................13
2.4 Value Perception: Do You Have to Love It to Buy It? ..........................................16
2.5 Brand Relationship.................................................................................................21
2.6 Forecasts ................................................................................................................24
3. METHODOLOGY ..................................................................................................28
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3.1 Introduction ............................................................................................................28
3.2 Criteria for an Objective Analysis .........................................................................28
3.3 Qualitative Analysis (Survey) ................................................................................29
4. RESULTS ................................................................................................................33
4.1 Introduction ............................................................................................................33
4.2 TSV’s are given a certain amount of air- time; does QVC allocate adequate tease
time and airtime to TSV’s that are sold at different price points? ...............................33
4.3 What challenges are encountered by customers when making purchases and how does
it affect QVC? ..............................................................................................................38
4.4 What is the perceived value of Today’s Special Value?........................................40
5. DISCUSSION ..........................................................................................................44
5.1 Introduction ............................................................................................................44
5.2 Discussion ..............................................................................................................44
5.3 Recommendations for Future Research .................................................................46
5.4 Conclusion .............................................................................................................47
LIST OF REFERENCES .............................................................................................48
APPENDIX A: TSV Email Pre- Purchase Blast .........................................................52
APPENDIX B: Inside Q ..............................................................................................54
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List of Tables
1. Beauty Electronic TSV ............................................................................................36
2 Kitchen/ Food TSV ...................................................................................................37
3 Electronics Computer TSV .......................................................................................37
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List of Figures
Figure 1: Existent Model of Perceived Value .................................................16
Figure 2: Perceived Cost and Benefit ..............................................................17
Figure 3: In the Kitchen with David Branding ................................................24
Figure 4: Using the scale below, could teasing TSV’s priced over $150.00
prior to airdate be beneficial? .........................................................................34
Figure 5: Host Social Page TSV Tease ............................................................40
Figure 6: Screenshot of Today’s Special Value Blogs ....................................41
Figure 7: Screenshot of customer who has no interest in the upcoming TSV .41
Figure 8: Screenshot of customers soliciting advice ......................................42
Figure 9: Customer missed TSV presentation .................................................43
Figure 10: Customer didn’t receive TSV email for upcoming TSV ................43
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The Special Value on QVC: An Analysis of Factors That Affect Home Shopping
Revenue
Azamir Latriel Green
QVC is known as the leading home shopping network. Every day, they offer their
customers a Today’s Special Value that can vary across broad categories. Today’s
Special Values are provided as an incentive to customers; a way to gain new customers
and boost revenue. The thesis will examine the challenges that are faced by customers
when they make purchases and how they affect QVC. It will also provide an analysis of
the amount of time spent teasing and selling a Today’s Special Value and if it is an
adequate amount for different price points. In addition, this thesis will study the
perceived value of QVC customers, in hopes of finding an effective way to forecast sales
for Today’s Special Value.
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CHAPTER 1: INTRODUCTION
1.1 Introduction
The migration of retail from brick and mortar to television’s multi-billion dollar
home shopping networks has transformed the way customers purchase. The start of home
shopping was in 1977 via radio in Clearwater, Florida. Masterminds Lowell W. Paxson
and Roy Speer took their idea of selling merchandise on radio to television shortly
thereafter. In the early 1970’s, Paxson, an AM radio station owner, had succumbed to the
rise of FM radio and began to lose listeners as well as advertisers (International Directory
of Company History, 2004). In an effort to keep his company afloat after an advertiser
could not pay his bill, Paxson took some electric can openers provided by the advertiser
and began to sell them on the radio. Due to the success of the can opener sale, Paxson
decided to change the name of the radio station to Suncoast Bargaineers and change his
programming to radio shopping. Listeners would call the radio station and make
purchases through the phone (Schudel, 2015).
In order for Paxson to successfully orchestrate this transition, he enlisted the help
of Roy Speer for financial support. Speer was an attorney and real estate developer
(Reference of Business 2015). The two decided to change their company name in order to
fit their new programming genre and selected the “Home Shopping Channel.” A few
years later they would go on to change the name again, dropping “channel” and adding
“club.” By 1985, while rechristening their company, they launched the network
nationwide, broadcasting 24 hours a day through cable and local television stations
(HSN.com, 2015).
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The success of HSN did not go unnoticed by a West Chester, Pennsylvania
startup. In 1986, Joseph M. Segal, founder of QVC, was an entrepreneur who started
multiple businesses, including The Franklin Mint. The Franklin Mint was known for
being one of the “world’s pre-eminent producer of high quality collectible items, as well
as the only private mint commissioned by foreign countries to produce coin on the realm
(icollectfranklinmint.com, 2010).” Segal then entered the television home shopping
business with QVC. Both QVC and HSN are owned by Liberty Interactive Group but
function as two separate entities and have two distinct styles of programming. HSN
utilizes a hard sell approach, as opposed to QVC’s backyard fence approach. Both home
shopping channels are constantly coming up with new ways to entice their viewers to first
tune in and then make substantial and or non-substantial purchases, in order to increase
viewership as well as revenue. In doing so, home shopping channels create customer
incentives to drive business and gain new customers. Over 70 percent of HSN’s core
customers are women 25-54, with a household income of about $60,000 (Wilson, 2008).
Although Mike George, who became President/CEO in 2006 is reluctant to put an age on
“her,” their core customer is 35-65 years old, with a household income ranging from
$50,000-$250,000 (Thau, 2011).
In 1970, Paxson began his home shopping network with can openers; in 2015,
what can be purchased from a home shopping network can meet the needs of most
people. Products available for purchase from home shopping networks range from
makeup concealer to plants. Brands evolve while selling on QVC; one product evolves
into an entire product line. Joan Rivers is a prime example of how one line can grow into
a larger line. Joan Rivers, in her 24 years at QVC, grossed over one billion dollars in
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sales, according to Fortune (2014). Joan Rivers sold jewelry, beauty and fashion which is
still in high demand among QVC customers. Home products, electronics, beauty, health
and wellness products are now a major revenue source for home shopping networks
(QVC.Com, 2015).
HSN is a multi-billion dollar company, but QVC nearly doubles HSN’s annual
revenue. In 2010, the 10-K of HSN, QVC, Shop NBC, and Jewelry Television revealed
collective gross revenue over $10 billion (Rapaport Magazine 2010). As reported in
QVC’s 2015 10-K Report, QVC.com in 1996 began allowing their customers to purchase
products only available online and view products that may interest them. QVC has
maintained a consistent e-commerce stream of revenue and continues to innovate and
mature in technology, most recently, making their QVC app available for Apple Watch
users. The QVC app allows customers to watch live programming and search what has
been sold earlier as well as the Today’s Special Value item. The TSV is an item that
customers look forward to because of the possibility of a great value.
1.2 Statement of the Problem
Today’s Special Value (TSV) is a specially priced item offered to the QVC
customer every day at midnight Eastern time, with the exception of the customer and
employees that are privy to the information prior to its air date. TSV’s have been utilized
since 1987, bringing special values to customers from various vendors that offer products
both new and old that have done well previously (QVC.com). The TSV is usually marked
down to a lower price than usual and or provides extra incentives for making the
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purchase. The difference between any other item sold on this day compared to a TSV is
that the TSV are expected at to generate anywhere from 20% to 30% of the company’s
daily revenue, which contributes to the growth of QVC. TSV’s are also essential for the
growth of the customer base as well. Makridakis, Spyros, Hogarth and Gaba, explained
that the future is somewhat like the past, but not quite comparable in the same manner
(2010).
TSV’s are bought by QVC with the intention of selling out all that has been
purchased. In order to make an accurate forecast, economic, brand identity and product
changes must be taken into account. Future outcomes will be all equally and uniquely
challenging. Preeminent is the difficulty to foresee and consider all of the factors that
might influence the future (Moore, Haran. 2010). In doing so, QVC takes numerous risks
that could possibly decrease their chances of having continuously successful TSV’s. Not
all TSV’s are successful at reaching all pro forma goals of 100%. However, an employee
interviewed by the researcher stated, “Although TSV’s are purchased with the hopes of
selling at 100%, that’s not always what the plan is for that day in particular.” Hence, “If
the only goal were accuracy, meaning that the interval will include the actual value, the
best way to achieve it is a forecast of infinite size” (California Management Review, Fall
2014)
Ideally, QVC hopes that 24 hours is enough time to make a decision about any
TSV purchase. QVC sells products from hair removal beauty items to quality beds that
can both be highly priced. Are the customers given enough time to make a decision or are
they just using their sense of perceived value because it’s from QVC? TSV’s aren’t
revealed to all consumers until the actual TSV airdate. Only selected viewers are privy to
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upcoming TSV’s. On QVC’s website, users are occasionally given the opportunity to
preview prior to the TSV. A tease is aired 30 minutes prior to the TSV being offered for
the first time. How effective can a TSV be if given a certain amount of time and what
products could benefit from this change?
1.3 Background and Need
Home shopping networks have been in existence since the early 1970’s beginning
on AM radio and then migrating to television. The programming and structure have
evolved over the years, even more so once other home shopping networks came into
existence. In order to stand out, home-shopping networks had to create distinct features;
one was to engage and create incentives for customers. HSN and QVC’s approach
pertaining to their selling methods and incentives vary. TSV’s have been in existence
since 1986 and have offered viewers specially marked items with an exceptional value
(QVC.Com, 2015). Over the years, QVC has grown its West Chester television studio
into one of the most advance technological television studios worldwide (QVC.Com,
2015).
In 2006, QVC teamed up with American Express to support the Count Me In
charity in support of women entrepreneurs. In 2015, the company launched an app for the
newly designed Apple Watch, to provide customers’ access to QVC programming and
products. QVC continues to expand by utilizing its second channel, referred to as QVC
Plus. QVC Plus provides pre-recorded programming on a three hour delay as well as live
programming.
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For many years, QVC has partnered with vendors and outside companies to raise
money and awareness for many charities. Relationships forged by QVC with vendors
can help bridge gaps and bring quality products to QVC. Lori Greiner, QVC ambassador,
is known for the “clever and unique” items she brings to QVC and particularly how
successful the products become. According to ABCNews.com (2014), Scrub Daddy
generated $100,000 in 18 months, mostly generated from air time on QVC. As a result of
a successful track record, vendors instill their trust, relinquishing most of the control of
their brand, and work closely with QVC in following the practices they have set in place.
This includes how they promote and position a product for a TSV. Still, the goal is for
both vendor and QVC to do well in order to increase the revenue of both parties and meet
the needs of the consumer.
A QVC employee interviewed for this research observed that a minority of items
priced over a certain amount were not as successful as a product that was not as
expensive. Why is that? This could easily have numerous reasons, and the answer is
essential to the analysis of how TSV’s are sold and may perhaps increase TSV’s pro
forma goals for higher priced items.TSV’s are broken down throughout the day with
certain pro forma goals for each host and time the TSV is presented on air. Hosts are
usually grouped into categories in which they fit and have some level of expertise in
selling a product. A well-seasoned host will usually be the first to introduce a TSV.
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1.4 Purpose of the Study
The purpose of this study was to research and identify whether QVC’s Today’s
Special Value requires excessive teasing prior to its air date in order to be successful.
Teasing is used to give the customer an idea of what is to come without giving them all
the information, just enough to keep them engaged and hopefully have them continue to
watch the programming. Since a large portion of QVC’s annual revenue is generated
from Today’s Special Value, it is essential for all possible opportunities to be explored to
increase the chance to grow revenue. The Category Production, Planning and
Merchandising department continues to present TSV’s that should thrive at all price
points. However, research that demonstrates the possibility of a certain price point
performance of a TSV is nonexistent.
In order to ensure QVC is using all resources at all price points, the researcher
created a survey. The survey was distributed to a variety of persons involved with the
selection and production of TSV’s. This survey queries the participants on how much
time is allotted for a TSV to be sold, their affiliation with TSV’s, and how effective
teasing of a TSV priced over a certain price point could benefit the gross revenue of
QVC. The data for the survey was collected, assessed and measured in order to consider
all functions.
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1.5 Research Questions
RQ1: TSV’s are given a certain amount of air- time; does QVC allocate adequate tease
time and airtime to TSV’s that are sold at different price points?
RQ2: What challenges are encountered by customers when making purchases and how
does it affect QVC?
RQ3: What is the perceived value of Today’s Special Value?
RQ4: How can QVC more effectively forecast revenue for Today’s Special Value?
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1.6 Significance to the Field
Home shopping networks survive some of the worst economic downturns because
of the special values they offer their customers. HSN and QVC both have surpassed multi
millions in net sales. QVC, a Liberty Interactive Corporation, had total net revenue in
2014 of $6 Billion (QVC, 2014). If all Today’s Special Values are forecasted accurately
and sold efficiently, they increase their chances for success. The significance of this
research is to aid home shopping networks in understanding perceived value as it pertains
to customers and the benefits of projecting plausible revenue numbers in order to not
overestimate or underestimate the total demand for products.
1.7 Limitations
Approval by QVC to divulge actual data may encumber the process, as well as
obtaining survey respondents who are willing to give their honest viewpoint of the
Today’s Special Value, stands as a limitation. The inability of the researcher to divulge
product and interviewee names represented somewhat of a limiting factor in the analysis
of results.
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1.8 Definitions
Today’s Special Value (TSV) – Per the QVC website, “Today's Special Value®. Every
day since 1987, we've offered one item at an exceptionally low price good for that day
until 11:59 p.m. ET”.
Dollars per Minute- Revenue that should be generated per minute when selling a specific
item.
TSV Hit- A segmented time in a specific show where the TSV is presented.
Scoreboard- Where the quantity of products and dollars are being tracked simultaneously.
Sell Thru- Tracks the quantity of a certain product being sold at the present time and
continuously tracks the TSV.
New Names- New customers who made a purchase for the first time at QVC.
Pro Forma- A sales goal set for a product to be met at certain points throughout the day.
Line Producer- Line Producers are the eyes and ears of the customer for the host. They
watch for what is making customers want the product being sold and relay that
information to the host.
OTO- One Time Only offers are generally used once a TSV has sold out or has been
taking off of air because of performance.
Show Ticker- Show tickers are used as a show enhancer, and run along the bottom of
viewers’ television screens in order to entice customers to make a purchase based on
reviews by owners of the product.
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Spots- Spots are QVC promotional commercials that are used to inform customers of
future endeavors. They also aid in providing a buffer for production logistics.
Tease- A tease is used to give viewers/customers an idea of what’s to come later in the
program.
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CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
This chapter will examine and discuss shopping value perception as it pertains to
customer buying habits as well as discuss the pro and cons of forecasting. Furthermore, it
will also discuss the origins of the home shopping channel and QVC’s Today’s Special
Value. Finally, this chapter will examine the idea of QVC allotting certain initiatives to
higher priced TSV’s in order to increase the opportunity for higher success rates.
2.2 HSN- Home Shopping Network, Inc.
HSN was formerly known as “Suncoast Bargaineers” which was broadcast
through AM radio originating in Clearwater, Florida, and begun in 1977 by Lowell
Paxson. In the early 1980’s Paxson solicited Roy Speers to join him in growing his then
declining radio company’s programming. Once they incorporated the home shopping
concept into the programming, business for this once failing radio station began to
flourish. Paxson and Speers monitored revenue and as their home shopping concept idea
continued to do well they decided to transition into television (International Directory of
Company History, 2004).
From the inception of the idea to sell products on television to 1985, the duo of
Paxson and Speers was grossing $1billion annually (Hintze, 2015). The company was
then renamed “Home Shopping Network” and was viewed on a Tampa area cable system
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and assigned a permanent channel number (HSN.com 2015). HSN went through
occasional name changes in their early days. The reason for the 80’s rise of HSN is still
debated. “One reason may have been that the shows' hosts gave no warning as to what
items would appear on the TV screen and when. As viewers could only purchase items
for as long as the products appeared on their screens, anywhere from two to ten minutes,
the typical member would watch the program for several hours each day in an effort to
find the best deals on products they wanted” (International Directory of Company
History, 2004).
The majority of HSN customers are homeowners, with a typical household
income of $65,000 a year or more (Moss, 2011). New York City, Los Angeles,
Philadelphia, and Chicago are the network’s largest markets (Levy, 2012). HSN
continues to broaden it is reach and by doing so has reached 95.0 million homes as of
(2014). Their online business started in 1994, when they formally launched HSN.com.
HSN gives customers incentives such as Today’s Specials and coupons. HSN has shown
it can survive during the worst times. During the deepest part of the 2008 recession, they
were able to sustain, and grow sales by 3 percent (Levy, 2012). HSN’s 2014 10K,
reported a total net year to year sales increase of $163.7 million (HSN,2014).
2.3 QVC- QVC.Com
Once QVC established itself as a home shopping network, it became one of the
largest in a short span of time. Coming from the merchandising industry known for its
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fine-quality collectibles made Segal suitable to lead QVC. QVC was named by its
founder Joseph M. Segal in 1986. “He named the company QVC to represent its three
guiding principles: Quality, Value, and Convenience. These values were created to
behold trust with customers, creating lifetime, avid fans” (QVC: About QVC, 2013).
QVC alone reaches 108 million televised homes, which generated collectively with
QVC.com $6.1 billion in 2014, increasing 2013 revenue by 2.5% according to QVC
Annual Reports.
QVC has had a Today’s Special Value, also known as a TSV every day since
1987. “Every day, we pick one special item and offer it at an extra special value that day.
It's an item we believe you'll love. And we love telling the story behind it. Today's
Special Value®. More than a daily deal. The best find of the day” (QVC.com, 2015).
QVC’s Today’s Special Value (TSV) comprises a large percentage of their expected
annual revenue goal; however, the TSV can have an uncertain impact on the company’s
revenue. According to a QVC Category Producer interviewed for this research, “this
strategy has been successful with the exception of when TSV’s do not reach forecasted
goals. When a TSV is not meeting goals, other products such as OTO’s are assigned to
compensate.” OTO is short for One Time Only and is used to generate revenue by giving
customers a great value.
In comparison to other home shopping networks, QVC prefers to stay away from
a fast-paced, hard-sell route with heavy emphasis on price-cutting and savings, and
prefers to use a backyard fence approach (Women’s Wear Daily in Reference for
Business 2015). This intimate soft-sell approach is more of a talk-show format with
hosts, placing emphasis on product information more than on price. They thrive on
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building relationships with the host and QVC community. QVC engages and captivates
audiences on all of its platforms in the United States as well as worldwide. QVC manages
to present 1,500 products on air every week and approximately 288 of these are new to
the QVC customer (QVC.com, 2015).
QVC follows a strategic plan on how they purchase merchandise. QVC’s 2015
10-K Annual Report explained that their purchasing practices are consignment based,
allowing them the leeway to return merchandise if they do not sell all that is purchased in
a timely manner. QVC’s brand relationships with celebrities, entrepreneurs and designers
and the promotion of those brands by their respected brand ambassadors add value to the
items being sold. The story telling of how a product has come about helps promote the
brand while gaining trust from the customer. They have built relationships with highly
noted celebrity and fashion designers such as Ellen DeGeneres, Isaac Mizrahi and from
the food circuit, Rachel Ray. Because of these forged relationships, QVC is able to
engage in cross promotion via the celebrity guest on other shows they are associated
with, e-commerce and mobile platforms.
Furthermore, QVC makes purchases with the intent to do well but they do not
primarily depend on any single supplier or designer for a significant portion of their
inventory purchases but all facets of the business including e-commerce (QVC 2015 10K Report).
2.4 Value Perception: Do You Have to Love It to Buy It?
It is suggested that perceived value is correlated with purchase intention. Research
has shown perceived value has a direct predominance in a customer’s buying habit.
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Perceived value for a customer is a general analyst of the functionality of a product and is
solely based on the perception of what is received and what is given to the customer
(Zeithhaml, 1988).
What one values, another person may not. In past studies, perceptions of price,
product quality, service quality and risk strongly influence perceived value and purchase
intentions in offline and online channels (Broekhuizen and Jager, 2003). QVC customer
purchases rely on service quality, and in addition, to how a host or vendor is perceived.
More favorable perceptions of service quality lead to a reduction in relation to perceived
risk for customers (Broekhuizen and Jager, 2003). In most instances in past research,
service quality in correlation with behavior has a direct effect on value perception as well
as service quality perception.
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Figure 1: Existent Model of Perceived Value
Source: Einwiller (2003)
Factors shown in the above diagram all influence financial performance, cost
savings, revenue and growth of a company. Service quality and product quality are
considered an instrumental benefit. Price is listed under monetary cost with a direct
connection to perceived value, perceived risk, time and effort expenditures and perceived
enjoyment, and is connected directly to both perceived value and purchase intentions.
In competitive markets, it is prevalent that perceived value plays a major role in
maintaining a competitive advantage, with predicted purchase behavior contributing to
the enhanced interest of marketers and researchers (Broekhuizen, Jager 2003).
Figure 2: Perceived Cost and Benefits
Source: Zeithaml (1988)
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Advantages, both monetary and nonmonetary are instrumental in evaluating why
the price of the perceived value is important to customers (Zeithaml, 1988). Cost includes
all factors presented when making a purchase based on nonmonetary and monetary
factors. Benefits include those factors that are instrumental to the purchase as well as the
self-seeking, hedonic reasoning as to why a purchase is made and the direct correlation to
the customer making a purchase. The diagram shows how cost as well as benefit plays a
role in perceived value.
QVC uses different methods of programming formats to increase appeal and
influence their customers to make a purchase regardless of how one may perceive the
merchandise quality. At the same time, TSV’s and QVC’s method of selling products are
classified by the goal- directed behavior Babin, Darden and Griffin (1994) defined as
customers being highly motivated to purchase a product or service in an efficient and
timely manner with minimum irritation. Items presented on air are sold for a certain
amount of time; a customer is still permitted to purchase an item after the sale is
complete.
In the course of a day, a Line Producer can see the rate and the quantity of
products being sold on a “scoreboard” that tracks sales data for all items in the day and
how the current show is performing. The Line Producer synthesizes the information and
feeds it to the host, who will usually use it as a sale tool in hopes to push other customers
to make the purchase. Customers viewing QVC are periodically prompted by a show
ticker of reviews that run along the bottom of the television screen along with possibly
seeing how many of the given item have been purchased. The researcher found an
accumulation of factors can have a direct impact on a customer’s perceived value
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regarding merchandise quality. Zeithaml (1988) theorized that price will depend on three
notions; first, the availability of cues that suggest quality. Second, price and quality
variation within a category of products, and finally, consumer awareness of a
competitor’s prices.
Sweeney, Soustar and Johnson (1999) stated that price has been directly linked to
quality but not necessarily perceived value. The higher the price perceptions (the higher
the monetary costs), the lower are the value perceptions. When a customer is purchasing
an item, the perceived relative price of a product compared to other products with similar
features will encourage a customer to become more inclined to make a purchase that
better suits them. In line with other studies, the greater the perceived relative price, the
less the perceived value judgment (Broekhuizen, Jager, 2003).
Quality, Value, and Convenience represent the QVC brand. Customers buy
products that they may be afraid to lose because of the financial risk attached, among
other reasons. One risk is that the product purchased will not function as expected and/or
will not fulfill their needs. If the product does not meet the performance expectation, the
purchase will become more of a waste of money, time and an inconvenience. If all risks
are not properly evaluated, they become detrimental to the company’s revenue
(Broekhuizen, Jager, 2003). QVC customers run the chance of encountering these risks
especially when purchasing TSV’s; this could be a direct effect of one of the major
negative issues found because of the lack of opportunity to examine products prior to
purchase (Einwiller, 2003).
TSV’s are generally given an allotted amount of time to be sold throughout the
course of a day in hopes of reaching all current consumers and hopefully reaching new
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customers, also referred to as New Names. The attitude or behavior toward a particular
product between a host and vendor is more positive when consumers feel they are able to
perform the behavior (Azjen 1988). As it relates to a TSV, customers want to purchase
the TSV at any time but most want to wait to purchase the TSV with a host customers
feel they can trust. During the day, selected times are allocated for demonstration and
education about the product. TSV’s are used partially as a way to control viewership. A
Coordinating Producer interviewed by the researcher mentioned that, “ most loyal
customers will tune in to watch QVC to see what the daily TSV will be and make a
decision to purchase.” The researcher found that QVC believes that pressure diminishes
because of its customer loyalty. This is essential when the economy is at a low, and
alleviates the idea of having to engage in expensive marketing programs (QVC 10-K
2014).
QVC programming is a uniquely designed genre that engages customers from
different angles. QVC fosters bonds between the host and customer through their QVC
social community, which creates relationship that allows a viewer to feel comfortable
with every purchase. In order for the host-customer relationship to be successful, the
product the host is selling must be of good quality, reinforcing all that was said by the
host. Products that are sold on air must meet the need or a want of their demographic and
have a value that is perceived as great. A key factor for the success of any product is the
solution it has for any given problem for its potential customer (Pace, 2009). The host as
well as product expert must educate the customer to convey why they should purchase an
item, focusing more on telling the story and including the facts that make the customer
ideal for this product and their current situation.
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There are elements added for stickiness, or audience retention, that keeps
customers engaged in the programming. Stickiness is one of the key drivers in making
QVC’s programming enticing to customers. According to a fifth year Associate Category
Producer interviewed for this research, the average QVC viewer watches for up to 3
minutes at a time. To stretch that time, QVC uses different movements, positioning, and
teasing of items to come in a current show and a show to come. By doing so, it will create
a new element and perceived enjoyment by the customer. In the relationship between host
and customer Vallerand explained, perceived enjoyment relates to peculiar motivations to
perform a behavior that is pleasurable in its own right (1997). Trust can be defined as the
confidence of the trusting party that the trustworthy party is reliable, has high integrity
and is associated with such qualities as consistency, competency, honesty, fairness,
responsibility, helpfulness and benevolence (Morgan and Hunt, 1994). QVC has a strong
and loyal customer base and continues to grow as QVC is constantly adding new
customers to the QVC brand.
2.5 Brand Relationships
Customers with the intent to purchase items over a certain price point commonly
compare similar items with a lower or parallel price. Quite often, consumers will find that
they are not always successful in making the correct choice. The “Value Chain” is
defined by Leenders and Flynn, as an accounting of all aspects and essential steps in how
an item is presented, in order to provide value to a customer (1995). Professor David
Garvin of the Harvard Business School suggests that there are eight dimensions of
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quality. Perceived quality relies heavily on the perception of the customer. The brand
relationship between a customer and an organization contributes to the perceived value.
A customer’s reasoning behind why they choose certain brands over others are
streamlined and allows them to make choices that allows them to have no hesitation
(O’Shaughnesssy, 1987).
QVC sells items that a customer would generally purchase only in person. For
instance, QVC sells many diverse products ranging from clothes to electronics. Food and
perfume are two categories where there would have to be some level of brand trust in
order for a customer to make a purchase. QVC sells perfumes and a large assortment of
food that customers’ trust will be worth the money. Schwarz, MacInnis and Price’s idea
of perception depended profoundly on how information is processed as it pertains to a
product. The term “imagin- ability” is directly related to how a product triggers
imagination in an individual (2004, 1987). QVC hosts use a wide variety of verbs to
convey how an item smells, taste or functions.
QVC trains vendors and on-air product experts on how they should position their
products and how to work along with the host to talk to the audience/customer. Tsao
(1996), defined the imagined relationship between the host and customer as para social.
QVC consciously builds these relationships between customer and host to build trust as
well as with the vendor/product expert and customer. In order for QVC to sustain their
trust with customers, they must maintain a rapport between the customer and the brand.
For instance, QVC at one point sold Paula Deen products, but because of a scandal she
was involved with, QVC decided to discontinue sales of her products. Although there
were no quality issues, her brand was tarnished and some customers no longer wanted her
23
products. If a product is revealed as not performing as a host or vendor claims, this will
have a negative effect on customer brand relationship as it pertains to QVC. This is of
high priority in the marketplace, because of the unforeseen issues that may occur
pertaining to the products customers receive (Aaaker, J.L., Frounier, & Brasel, 2004).
Hosts at QVC are given niches in different categories based on feedback by viewers on
how they purchase when this specific host is selling. If a host sells a certain genre and
seems to be trustworthy in what they are selling, customers then become comfortable
with that host selling that particular genre. Senior Host David Venable is known as the
resident foodie on QVC.
Figure 3: Sample of branding for “In the Kitchen with David”
Source: Inside Q
On cook days, featuring 24-hour long cooking and kitchen products, Sundays, and
Wednesdays, David’s show, In the Kitchen with David is scheduled during peak
viewership times. David’s sales goals are higher and food/kitchen TSV’s are expected to
succeed. A viewer seeing David Venable sell anything besides food and kitchen with the
exception of electronics and home items is somewhat unlikely.
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In theory, creating relationships with a brand can be a positive factor that directly
affects consumers’ self-perceptions (Cheng, White, & Chaplin, 2012; Park et al., 2010).
The opposite of brand relationships is brand resistance, which can have a direct effect on
customer perception and therefore QVC’s revenue. A major impact how many TSV’s are
bought and cancellations of an order by a customer reflects directly on how host and
guest use emotional logic when selling a product (Ziglar, 2001).
When products do well, QVC will then replicate either the exact item as it relates
to the value and/or add an additional color or style. According to Kuenzel and Halliday,
QVC should consistently take into account consumers’ repurchase intentions, related to
successful bring-backs of TSV’s Any item can become a bring back, a term used to
signify an item returning to air once it has left (2010). QVC has a strong customer
following on all platforms of social media and on QVC blogs, where customers give their
experience with certain items they have purchased from QVC. This feedback then has a
negative or positive effect on how QVC moves forward with different items.
2.6 Forecasts
QVC TSV’s begin at 11:59 ET every day, with a projected forecast of quantity
the product would sell in 24 hours. The team in charge of the execution of the TSV
includes the Planning team, which calculates the revenue logistics and determines how
much time should be used in order for the TSV to be both beneficial for QVC and the
vendor. The Merchandising team works directly with the vendor to bring forth a product
that customers will want to purchase based on something that is new and something that
has worked in the past. Forecasting can be seen in two different forms; resourceful or
25
inefficient. According to Leenders and Flynn there are two basic ways to classify an
effective forecast (1995). The first is qualitative, relying solely on the experts in that
genre. Secondly, quantitative forecasting focuses on previous results. Both qualitative
and quantitative results are used to improve future outcomes.
There are customers who are informed about upcoming TSV’s prior to airdate.
Customers are chosen based on prior purchase habits, how often they purchase and what
they inquire about while they shop online. These dates range from one month to one day
prior to the Today’s Special Value. TSV’s are usually planned six months prior to airdate.
Barnett (1988) suggested a total market might not stand as a driving force for a business
strategy if the market is complex or the product’s history or brand is just a small share of
what is to be presented. Instead, the principal challenge may be to understand product
substitution and competitiveness when it comes to items such as vacuums and computers.
Makridakis, Spyros, Hogarth, and Gaba (2010) explained that the future would not be
exactly like the past. This means future TSV numbers cannot solely rest on the success of
past TSV’s. More often than not, the researcher found that goals for TSV’s were not
being met. This could be the result of not assessing the actuals.
When TSV’s are bought, they are bought with the intention to sell out, not
necessarily on the TSV date but over a short amount of time. Haran and Moore (2014)
explained that in order for a TSV to be of some use for predicting future performance, a
range must be focused upon and not over analyzed with the goal of not under performing
as well. The intention of the TSV is to reach a certain percentage of the yearly goal of all
the TSV’s acquired by QVC. TSV’s are not all successful because of the notion QVC has
adopted to streamline focus on a product. If an item has done well previously on QVC,
26
they will add a different color or pattern to the next TSV. That is not necessarily what the
customer wants or the correct strategy to generate more revenue from one product when
striving for a successful TSV. If TSV’s are purchased with the intention to analyze
customer reviews, suggestions from the blogs and research of all other events, as well as
estimates of previous TSV’s, they will succeed. Haran and Moore (2014) encouraged
having probability as a factor in the planning and distribution process. If this concept is
utilized it will allow QVC to navigate the twin risks of producing too much versus
producing too little.
Haran and Moore (2014) explained,
“Every business decision depends on making a forecast of the
consequences of the decision. Although most organizations do forecasting, most
do so badly. They ask either for a point of prediction-a single “best guess”
forecast, when everyone knows that this is an oversimplification of the truth, or
for a simple range forecast, which is likely to result in biased predictions more
often than not. In this article, the authors propose a better approach, one that takes
seriously the uncertainty in forecasting and the most common errors in the way
people think about this uncertainty”. (Haran and Moore 1999 pg.5)
A total demand of a product is needed in order for QVC to have a genuine
understanding of how TSV’s can be successful. A total demand for QVC encompasses
all goods and services offered with products sold. QVC must have what is needed in
order to meet the demand of its customers with the services they offer.
27
William Barnett (1988) explained in four steps how to calculate total demand,
which can be helpful for the success of TSV’s. QVC must continually define and redefine
the market and look forward for ways to expand their demographic. Second, the industry
demand must be divided into main components. Next, QVC must forecast the drivers of
demand in each segment and project how they are likely to change. Finally, QVC must
conduct sensitivity analyses to understand the most critical assumptions and to gauge
risks to the baseline. Looking at non-successful TSV’s, QVC encounters situations that
seem to be directly affected because of critical assumptions and non-consideration of a
sensitivity analyses. “Despite the best analysis, moreover, the assumptions behind the
other demand drivers could also be wrong, especially if discontinuities loom on the
horizon (Barnett, 1988)”.
What could possibly be adequate enough to say a TSV will be successful?
Barnett explained that a company could affect its demand if it is estimated lower than the
forecasted baseline. There is a larger risk for errors that are forecasted too low, resulting
in full revenue potential not being met. Overall, including total demand in the strategy
process can be beneficial for the company and success rates of TSV’s. Hough (1999)
wrote about having goals and the positive effect they can have on improving sales and
revenue. It is imperative that businesses forecast, but it is just as important to know that
forecasts can be unreliable.
O’Shaughnessy, author of “Why People Buy,” would argue that the teasing of a TSV of
any certain price point prior to its airdate would not lead to a successful TSV. The
customer has control and forecasting will not help with tomorrow or the next TSV.
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“In other words, consumers cannot say what their decisions will be before
they have made them. Once we accept that an individual’s decisions, by
definition, cannot be known in advance, then it makes no sense to speak of
programmed decisions” (O’Shaughnessy, 1987, pg.55).
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CHAPTER 3: METHODOLOGY
3.1 Introduction
This case study consists of an objective analysis of QVC’s Today’s Special
Value, and how perceived value and allotted time can influence purchasing. Interviews
and surveys were issued and distributed to individuals with a direct relationship to
Today’ Special Value. Three categories are being analyzed in this case study, a computer,
beauty electronic and kitchen product. The data was collected with the intent to aid in the
financial growth of QVC’s Today’s Special Value.
The purpose of this study was to first identify the challenges encountered by
consumers when making purchases and how it affects QVC, and second, to analyze the
amount of airtime given for a specific item and explore the alternative of different TSV’s
at different price points. In order to have a true understanding of what is being considered
when purchasing a Today’s Special Value, the perceived value of the customer must be
taken into account. Finally, in analyzing and researching perceived value, price points as
well as challenges, the researcher plans to propose a more effective way to forecast sales
of Today’s Special Value.
3.2 Criteria for an Objective Analysis
The researcher chose to study a leading home shopping network, QVC, in order to
analyze the purchase process of a special sale item known as “Today’s Special Value.”
According to QVC’s 10-K Report (2015) their core customer base represents an attractive
demographic target market. Based on internal customer data, approximately 53% of
QVC’s 8 million U.S. customers for the twelve months ended December 31, 2014 were
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women between the ages of 35 and 64. Programming is distributed to over 100 million
television households continuously throughout the course of one year. QVC audience
represents approximately 98% penetration of television households subscribing to
services offered by television distributors (QVC’s 2015 10-K Report). QVC does not
stand alone in offering and attempting to give its customers a “special value” for a certain
amount of time daily. Based on the research findings, QVC has experienced many
successful Today’s Special Values, making it a reliable, objective analysis.
Helping to justify the choice of QVC as a research subject was that the network
had a strong customer following regarding the TSV attached directly to QVC.com and
other social media outlets. TSV’s are generated and adjusted for future presentations
based on customer reviews on what has been previously sold, which makes it essential to
the research. Avid QVC fans form groups on Facebook as well as in the community
forum on QVC.com. This allowed the researcher to explore some issues QVC customers
have pertaining the TSV.
In addition to having customers’ opinions with regard to TSV’s, it was of
immense importance that the researcher had access to interview employees directly
associated with the TSV. In order to obtain the most impartial survey, employees with
various tenure and experience in contrasting roles that work with the Today’s Special
Value were chosen. All respondents expressed interest in the idea of helping with aiding
TSV future success.
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3.3 Qualitative Analysis (Survey)
In this study the researcher utilized a qualitative group of employees and vendors
who work with QVC, directly pertaining to Today’s Special Value.
The Research questions in this study included the following:
How long have you worked for/with QVC?
What is your current role at QVC?
What is your responsibility pertaining to a TSV? (For Example: Execution,
positioning, etc.)
In your opinion, do any of the listed categories need more time for a viewer to
make a purchase?
Using the scale below, could TSV’s priced over $150.00 be teased prior to TSV
air date?
Please provide one comment or suggestion pertaining to the way TSV’s are teased
and how effective or ineffective they are.
The qualitative case study described the opinions on how TSV’s are being sold on
QVC and how time and perception can be instrumental in the success of those products.
Interviews as well as the survey were rendered in order to collect data as it pertains to
Today’s Special Value.
Setting
This study was conducted via an online survey, as well as in person interviews
with the researcher. There were a total of 10 online surveys completed along with 3 inperson interviews. This survey was optional and confidential. Forty percent of those
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surveyed had worked with QVC in some capacity for 6- 15 years, 30% 2-5 years, 20% 16
plus years, and 10% 0-1 years.
All persons surveyed were asked to complete the survey in its entirety from the
link that was given only for them to complete. Participants were interviewed in the
privacy of their own office.
The researcher chose to use a purposive sample in order to generate a genuine
response related to Today’s Special Value. The participants all worked with or at QVC in
relation to Today’s Special Values. Participants titles included: Host, Guest Host,
Vendors/Representatives, Planner, Associate/Category Producers, and Merchandiser.
Data for three different TSV’s priced over $150, in different categories, were collected by
the researcher and analyzed.
The data collected and shown represented the breakdown of products sold as an
entire one-hour blocked show or a “hit.” A hit is where a TSV is placed in a show for a
certain amount of time outside of its own show. Throughout the course of the day the
status of the TSV is updated and distributed to those that work with the TSV. This
information is beneficial for the team to help monitor and/or adjust certain aspects of the
presentation that causes viewers to purchase the TSV.
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Chapter 4: RESULTS
4.1 Introduction
The qualitative analysis of those surveyed who work with QVC in the execution
of certain TSV’s brought forth answers to Research Questions 1 and 2. To effectively
establish if TSV’s were being teased effectively and answer the third research question, a
quantitative analysis of customer feedback from blogs and forums both hosted and not
hosted by QVC were also taken into account. Data was compiled for three separate
TSV’s from different categories to get a broad scope of TSV’s and to challenge if in fact
items purchased at a higher price point needed more time in order to be effective. The
researcher will take in to account all results in order to answer the fourth research
question.
4.2 TSV’s are given a certain amount of air time; does QVC allocate adequate tease time
and airtime to TSV’s that are sold at different price points?
The qualitative analysis was effective in proving that it is essential for items
priced over $150 to be teased prior to its TSV release date. The survey asked what
categories could benefit from being teased prior to its airdate. The data showed that the
respondents were split in their decision on how effective this option would be, but all
agreed it would be effective and beneficial for three of the categories. According to the
respondents, Electronics, Kitchen/ Food, and Beauty TSVs teased prior to airdate could
be essential to the success of the TSV. 100% of the respondents felt that electronics,
34
above any other genre of products could benefit from prior teasing, whereas Home/
Décor, Jewelry, Apparel, and Accessory TSV’s did not need as much time in order to be
effective.
Figure 4: Using the scale below, could TSV’s priced over $150.00 be teased prior to air
date?
Category
Yes
Total
Responses
No
Mean
Electronics
10
0
10
1.00
5
2
7
1.29
3
4
7
1.57
7
1
8
1.13
2
5
7
1.71
2
5
7
1.71
1
6
7
1.86
TSV
Beauty TSV
Home /
Decor TSV
Kitchen/
Food TSV
Jewelry TSV
Apparel
TSV
Accessories
TSV
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Those surveyed were employees who have been employed by QVC anywhere
from one year to over 16 years as well as outside contractors and vendors who work
closely with QVC in the execution of a particular TSV. When the respondents were asked
to provide a comment or suggestion pertaining to how TSV’s are teased and how
effective or not effective teasing the TSV would be, a merchandiser thought that, “In
order to be effective you’d have a full list of features as well as the TSV price. The
problem with this pre-promoting could leave us open to price matching from the
competition once they know what our offer will be.” There was a general consensus as
far as teasing a TSV. The general agreement was that higher priced TSV’s should be
teased prior to airdate but only to a certain extent. As mentioned by a Planner who has
been with QVC for over 16 years, “QVC does not rely on teasing for any item. We don’t
believe in shoving a good deal down our consumers’ throats.
Our viewer knows we have the TSV each day. They understand Fashion Day will
most likely have fashion as a TSV so will turn on the TV just to see. Ideally when it
pertains to our viewer it is not as if they are pre-warned or teased to what’s to come that
will get them to make a purchase, but more of if it’s something they wanted or need that
makes them make the purchase.”
40% of the respondents worked at or with QVC for 6-15 years. 30% of those surveyed
were in the merchandising department.
When asked if certain categories need more time for a viewer to make a purchase,
100% of all respondents agreed that electronics was the one category that could benefit
from more time. All respondents didn’t reply to all questions. The assumption by the
researcher was that for this question, they didn’t agree or disagree. There was a split
36
decision among the surveyors when asked how effective prior teasing could benefit items
priced over $150. 50% of the respondents agreed that teasing the TSV that is priced over
$150 would be somewhat effective and the other 50% thought it would be effective.
Eight out of ten surveyed provided comments and suggestions regarding the questions
surrounding Today’s Special Values.
The researcher found that most items of a higher price point are usually purchased
after a substantial amount of rationalization. When analyzing the TSV hits and TSV one
hour shows, it was evident that one-hour shows were more impactful, which lead to
higher sales performance. This supports the researcher’s theory that time is more
important when making a purchase with a higher price point. TSV’s that were priced over
$150, particularly in the kitchen/ food, beauty and electronics categories were among the
TSV’s that did not do as well as projected. The three products chosen to analyze are not
unfamiliar products for the QVC customer. The researcher chose to analyze three
different categories that were TSV’s previously and priced over $150. The beauty item
chosen was a beauty electronic tool.
Table 1.
Beauty Electronic TSV
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Table 2.
Kitchen / Food TSV
Table 3.
Electronics Computer TSV
In one-hour shows, the host and guest host review all of the features of the TSV
as well as when they do a TSV hit. As shown in the tables, there are more one-hour
shows as opposed to hits as it relates to the products being analyzed, primarily because of
their price point. The time of day plays a major part in how high or low a performance
goal is set for a TSV.
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Appendix A and B contain illustrations of tools that play a role in reaching
performance goals. In Appendix A (Image: A1) is an email blast pre-purchase flyer along
with a short description (Image: A2) with the option to have an early look at an upcoming
TSV as well as the option to purchase. If interested in purchasing, there is a link provided
that will take the viewer to a full detail page (Image: A3). QVC is able to measure the
likelihood of success of the TSV’s that are to come with a pre-purchase email blast.
Although they do not use the pre-purchase to change TSV day performance goals, they
do make a conscious effort to add other products to supplement what will possibly not be
made by the TSV.
QVC has selected a group of customers who are given the opportunity to receive
the “Inside Q” (Appendix B: Image: B1, B2). Others are aware of this information
because those privy to TSV’s prior to release date share this information with others in
groups they participate in. This can be beneficial as well as a hindrance to QVC (Image:
B3).
4.3 What challenges are encountered by customers when making purchases and how does
it affect QVC?
In Table 1, TSV Beauty Electronics was soft, meaning not doing as well as
intended. The host influence on customers has an effect as well. The first show beat its
goal by 1%, while the other hits and shows did well but did not meet forecasted goal. The
analysis of TSV’s show how that no matter how much time is allotted, the number of
units that are to be sold vary because customers buy more from host they trust. The day
39
part the show falls under also is a factor. The Kitchen/ Food TSV, Table 2, shows the
opposite of what is expected when David Venable sells kitchen/ food products. Being the
“Resident Foodie” for QVC, David has static shows on Sunday and Wednesday that have
a loyal fan base. As shown in Table 2, the TSV did well prior to the “In the Kitchen with
David” show at 12:00 and was soft for his static show. Customers could have decided to
purchase earlier because the quantity of a popular color was low. An Associate Category
producer interviewed from the Home and Food category mentioned that customers wait
to purchase items sold on a cook day for “In the Kitchen with David” because of their
brand loyalty to the show. Table 2, shows that the first one- hour show did not meet its
goal, but the second one- hour show goal was surpassed by 34%, and the third show met
its goal by the end of its presentation.
Overall, the Kitchen/ Food TSV in Table 2 performed well, sometimes surpassing
its performance goals set by the planners. The Electronic TSV, Table 3, was a soft TSV
throughout the entire day. This could be a result of this product being sold too frequently,
customers not being interested and/or the TSV not being a strong product. This TSV met
none of its forecasted goals for the day. This TSV was equipped with all tech savvy hosts
with the exception of David Venable, who has a large following that prefers to purchase
from him, although he is a deemed a “Foodie.” The highest grossing sale during this day
was during a show where the TSV reached 74% of its goal in 24 minutes of airtime.
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4.4 What is the perceived value of Today’s Special Value?
As the screenshots establish, many QVC customers take a lot of advice in making
a purchase, based on reviews from other customers who have previously purchased the
product. QVC allows its viewers to give feedback through its community blogs and hosts
social media pages and blogs.
Figure 5: Host Social Page TSV Tease
Source: Albany Irvin QVC Host Facebook Post
The researcher selected a random sample of viewers’ posts relating to TSV’s, to
analyze how effective promotion can be for the success of a TSV. There is a specific
section dedicated to Today’s Special Value called TSV Talk, where a customer can visit
and get feedback from TSV’s, past and present. Occasionally, there can be discussion
surrounding a future TSV.
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Figure 6: Screenshot of Today’s Special Value Blogs
Source: QVC.com Today’s Special Value Blogs
Future TSV’s can be found on personal groups formed by QVC customers. There,
they share their views on the TSV, questions regarding the TSV, and QVC in general.
Customers’ opinions on TSV’s are beneficial to the research. Communication is a much
more inclusive, more encompassing concept than persuasion (includes inquiring as well
as advocating) (Varey, 2002). The frustration of a customer over the value offered by a
TSV is seen in Figure 6. This post occurred at 8:14 PM, well before the TSV midnight
start; another QVC customer prior to its release date made this viewer privy to this
information.
Figure 7: Screenshot of a customer who has no interest in the upcoming TSV
Source: QVC.com TSV Blog
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Every value offered will not be the best value for QVC customers. The value can
include an easy pay option where customers can pay over a certain amount of time and or
free shipping and handling. Teasing a TSV prior to its sale without the price being shown
or provided by the host could serve as another way to get customers to continue to wait
for the TSV presentation. Figure 7 shows a customer who used the channel guide for
QVC to see what the future program would contain, and by being a loyal customer was
able to know what the TSV was prior to its scheduled airtime. When a customer types in
the phrase “one more hour”, the search results yielded examples of how customers can
navigate and put together an idea of how a product performs and how fast that
information can travel.
Figure 8: Screenshot of customers soliciting advice
Source: QVC.com TSV Blog
Time is important as it relates to Today’s Special Value. Customers need time to
make conscious decisions on the product they are purchasing, more so with higher priced
43
items. In the screenshot below, (Figure 9) a customer not only missed a product that was
presented but was not aware of the extra colors.
Figure 9: Customer missed TSV presentation
Source: QVC.com TSV Blog
Figure 10 shows an incensed customer, because he/she was not made aware of an
upcoming TSV.
Figure 10: Customer didn’t receive TSV email for upcoming TSV
Source: QVC.com TSV Blog
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Chapter 5: DISCUSSION
5.1 Introduction
QVC has sold over 10,000 separate Today’s Special Values since 1987
(QVC.com, 2015). Although the company has had many successes with TSV’s, is a
single day enough time for each considered purchase to be made by the customer? Could
the perceived value, along with the given air- time by QVC be enough for customers to
make a purchase? If QVC would reanalyze their forecasting method of how much
inventory they take in, will that better help with the pro forma goals being reached?
The purpose of this qualitative study was to increase QVC revenue by introducing the
idea of customer perceived value and to provide an analysis of airtime given for TSV’s.
The researcher also sought to determine if improved forecasting will aid in increasing
revenue and accurate pro forma goals.
5.2 Discussion
QVC uses a system that the researcher refers to as CUFF, Continue Until Failing
Fails. It is a system that works for QVC. If something in the past has worked and has run
its course they will still be inclined to continue on the same path failing or succeeding.
However this has worked for the company and has contributed to the company’s current
success.
The data collected from the qualitative study by the researcher showed that items
purchased over a certain price point could benefit from more time so that customers can
make a decision on purchasing the product. The allotted air – time given for each TSV is
45
helpful in reaching a large audience because of the extended time given on TSV days.
QVC promotional spots serve as a way to give the call center time to free up phone lines
and allow others to call in to place orders for products previously on air. They are also
used as a way to inform customers of what’s to come next for QVC and potential deals
and events they should look out for. That time would also be an opportunity to highlight
upcoming TSV’s.
Emailing customers prior to the TSV date can assist with properly forecasting a
number of potential buyers and calculating a more accurate number pertaining to the pro
forma goals set by planners and the merchandising team. Appendix A, (Image A1) shows
an example of an email that went out to a selected group of customers who would
potentially purchase a beauty item based on previous buying habits and inquiries while
on QVC.com. The customers who are made privy to the information will be directed to
go to the website and purchase prior to the TSV date.
Some viewers do not take advantage of this opportunity and prefer to wait for the
presentation on its actual airdate. QVC will benefit more from their email blast if they
would implement in their checkout system the option to receive emails with choices of
items they would like to be notified about with the option to change those items. Limiting
customers to what they have purchased previously decimates the other possibilities of
them purchasing items they haven’t yet purchased. The email should contain all the
features of the item and as suggested by a host to ease the anxiety of the expensive
purchase to not focus on the easy pay or the offer and just the product itself. This will
increase the perceived value of the TSV and give the actual benefits of what is being
sold.
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5.3 Recommendations for Future Research
Based on the results of the research, the end data could improve if seasoned
employees as well as a new employee from the same department could give their
viewpoint. The research instrument should allow respondents to be able to return to the
survey if they needed to stop and complete at a later time. Second, a study of the
relationship across brands in relation to the person who is selling would be beneficial.
QVC has added QVC Plus, a second channel that runs regular QVC programming
on a three hour delay in addition to live programming, was created to counter program
the main channel. QVC Plus incorporated a One Day Only one-hour product show to
work as a TSV on the second channel. This show will have hits throughout the day that
will run solely on QVC Plus. A recommendation for additional future research would be
to provide an analysis of how the counter programming on QVC Plus is beneficial to the
growth of QVC.
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5.4 Conclusion
QVC customers can benefit from additional time, in order to make purchases over
certain price points. This can also alleviate the risk of returns for QVC and ensure
revenue retention. The idea of creating compelling teases that are enticing to the customer
can aid in creating stickiness and strengthening conversion numbers. Currently QVC
utilizes teasing of future sale items. These teases are usually loaded with a lot of
information or just enough to spark the interest of the customer. QVC’s customers have
found that the service quality, along with value of the items being sold are appealing and
have a direct impact on their purchase intention. Perceived value, along with brand
relationship, and not necessarily time, stand as the key drivers for the initial purchase.
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Appendix A: TSV EMAIL PRE –PURCHASE BLAST
Image A1: Email Preview Blast for A TSV
Source: QVC.Com, 2015
Image A2: Short Description of TSV
Source: QVC.Com, 2015
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Image A3: Screenshot of the Early TSV Blast
Source: QVC.Com, 2015
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Appendix B: Inside Q
Image B1: Inside Q June 2015
Source: Inside Q, 2015
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Image B2:Inside Q Month of June Programming and TSV’s
Source: Inside Q, 2015
Image B3: Screenshot of Customer Sharing her Inside Q with Facebook Group
Source: QVC Addicts Facebook Group
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