Engaging the Customer Is Key to Qurate’s Success

WWD: Given the techtonic changes shaking retail, how is Qurate adapting to all of that change?

Mike George: The company has evolved enormously from its roots as a TV shopping company in the U.S. 30 years ago with our QVC business. We do live at this very wonderful and strange intersection of retail and media, content and commerce and social, and also brand marketing because we're really at our heart a brand builder as a company. And so for us, it's about understanding this explosion about digital media.

So how do we take advantage of this explosion of digital media to present ourselves in new ways to new sets of consumers? How do we take advantage of the consumer coming back around to retail as an experience, a curated engaging experience?

Retail is more than a search box and an algorithm and free shipping, so how do we take advantage of that desire for more from the shopping experience? We think about how brands are being built differently in today's world. This growth of digitally native brands, even China-direct brands, the very way in which brands grow up in today's world are changing so we think about how do we use our platforms to go after all those opportunities, leverage our global scale and reach, our consumer engagement and our web properties — but be willing to keep changing.

And so our mantra is about constant innovation, continue to try to reach new sets of customers in new digital platforms, be willing to try things, fail and move on, and continue to deepen that product experience and add more value to the consumer. It's really been a fun time for us. It's been a dynamic time for us. We're trying to release new capabilities on a weekly basis to reach new sets of consumers and trying to reimagine what this business could be.

WWD: You announced voice activation today. What was the decision behind that?

M.G.: We released a skill on Alexa for our HSN brand and we'll expand that across our other brands over time. Alexa and its cousins, these will have a fundamental change in the ways people will engage with brands over time. In many ways they are a voice version of a search engine.

Quite frankly they are not very friendly to brands, and they're not very friendly to the shopping experience. And if you search a typical brand term or fashion term on Alexa or on a marketplace, you'll see what you get. So we wanted to change that equation and we are about having a relationship with our customer and get her on a conversation.

For us, conversation commerce is a logical extension of our core value proposition so we wanted to use Alexa to help the consumer search for inspiration rather than search for a product. So if you get an Echo Show as an example, which is an Echo device with a video screen built in, you can engage with Alexa, you can bring in HSN, you can engage with our platform and search for those things you care about and be presented with great, rich content, live and on demand, that will help you have a deeper experience with the brand. I think it's perfect for use in our model, but we have to use it in a way that's right for us.

WWD: How do you judge the right time to go into conversational commerce? You don't want to go into it too early — and you made the point that you're not afraid to innovate and fail, but you obviously want to succeed — so when's the tipping point? Is it the number of users of the devices, or how does it work?

M.G.: I wouldn't say we have a really systematic view on that. We think a lot about our flywheel. We think a lot about how we create value and how these changes in the world really intersect with that and stay true to the brand proposition, and then it's a matter of what does it take to innovate, how big is the change.

We talk a lot about shrinking the change so we can do something that's reasonable in size, can be delivered quickly. And so we have been debating voice-activated conversational commerce for probably a year, and about three months ago, we said “OK, it's time to stop debating it and just get a prototype in market.” Part of the head-set change we've needed is we are so proud of our customer experience, so proud of customer loyalty and retention that we've probably erred on the side of being overly conservative about giving her new features and benefits before we're confident they're perfect.

So now we realized we live in a world where we're going to give her things that are imperfect, but extend the experience, and then we'll co-learn with her and evolve the experience. I think voice commerce

WWD: Was that new attitude toward trying things also part of the decision to merge QVC and HSN into one business unit?

M.G.: It was. We acquired HSN in January of this year, and we believe in both brands. We will maintain both brands, but when you think about the pace of technological change, that goal to innovate at a higher speed, we needed to figure out what can we do together in combination that will give us the best of both brands and still maintain the unique identity of each brands.

We're bringing the two businesses together, maintaining separate brands, separate campuses, but now we can drive innovation on the digital platforms, innovations on mobile and innovations on voice commerce in a cohesive, aligned way. And we've also brought our merchandizing teams together across QVC and HSN so we can really think about a category and a customer and create the optimal assortment across both QVC and HSN in an integrated way. Between those two brands, we have five broadcast networks in the

U.S., so how do we make sure that all five networks are engaging different consumers with complementary propositions in product and programming. We needed to bring things together to create that separation and complementary [product lines] across brands in the networks.

WWD: When you're looking at all the brands, be it HSN, QVC or Zulily, and then the different platforms and the different devices that they're on, obviously TV, mobile, desktop, etc., does that dictate the different programming that you're looking at? M.G.: Today, we think more about customer journeys than about platforms, where is the consumer, what is she trying to do, what does the shopper want to do, and how do we intersect that desire in a way that's engaging for her.

So we just find this infinite array of journeys that we can tap into, everything from I'm on Facebook and I'm in a community learning more about beauty, and we can intersect that interest with our live beauty broadcast channel, Beauty IQ, which we simulcast on Facebook live. We can engage her in that learning moment. We can take her to a site that doesn't have QVC or HSN on it, but is a marketplace that has QVC, HSN or Zulily products but under a different social platform, kind of a micro brand, a social brand.

If she is on YouTube, and she is focused on the use pattern on YouTube, which is typically learning how to do something new, and if she wants to learn how to fry a Turkey for Thanksgiving, which I highly recommend, if you search how to fry a turkey without burning down my house, we want to be there. We want to be there with really great content and, by the way, with some really great turkey fryers. So what are all those occasions on our interactive TV platforms? We can present to her multiple networks, multiple on-demand programming. So it's just about ►