Mike George sensed that the COVID-19 pandemic was coming.
During the week of March 12, the company began pulling its tens of thousands of employees out of offices in the U.S. and abroad, said George, president and CEO of Qurate Retail Group, which owns such brands as QVC and HSN. With its Italian arm headquartered in Milan, the company could see what was happening in Europe and had a few weeks to grasp what was ahead for the U.S., he said.
Now that retailers and brands are finding new ways to operate mid-pandemic, some are turning to livestreaming to connect with consumers remotely — an area QVC and HSN have occupied since their inception in 1986 and 1982, respectively.
Inside the company, QVC and HSN have had to make swift adjustments to serve customers, keep staffers safe, and prepare for business after the pandemic ends. Experts see QVC and HSN as well-positioned to capitalize on the coronavirus pandemic and anticipate that livestreaming will be here to stay once consumers can leave their homes.
Pandemic pivot
For consumers watching QVC or HSN these days, they'll likely notice some slight differences from previous broadcasts. In response to the coronavirus pandemic, guests selling their products have to market to customers via Skype, which sometimes gives a glimpse into their homes. Hosts discuss products in the studio alone.
The company has also scaled back its in-studio operations. Though the networks' food business has been one of its best performers during the pandemic, hosts discussing culinary products are no longer allowed to try the dishes they showcase on TV. Additionally, the hosts aren't showcasing as many sizes and colors of other types of products to simplify the presentation, George said.
"We were a little bit worried about what would be the quality of that experience. We pride ourselves on pretty high TV standards," George said. "But what we found was the customer actually loved it. She loved the intimacy."
Behind the scenes, there is a third of the staff in the studio than there was before, and its customer service staffers are fielding their calls from home, George noted. For workers still coming into the fulfillment centers, the company conducts temperature checks and has suspended its shift attendance and productivity requirements. Employees who don't feel comfortable coming into work have the option to stay home and receive partial pay without fear of their job being eliminated, he said.
The company has had to alter its fulfillment and returns operations, too. It takes longer to get orders to consumers. The company has extended its return policy to 90 days from 30 days, because it recognizes that it's hard for shoppers to return things from home, George said.
Given concerns about virus transmission, the company now leaves returned merchandise in trucks for a day or so to prevent contaminating the staffers handling the products, George said.
Even before the pandemic, the networks aimed to build consumer confidence with purchases by describing products thoroughly on-air, imposing quality standards for the products it sells and implementing common sizing standards for apparel items. By doing so upfront, it aims to reduce the likelihood of needing to return a product in the first place, George said.
To find out which products to showcase on each network, the company analyzed the performance of products in minute increments to determine which items were selling as well as what customers were buying online, George said. There were also internal discussions about what customers wanted as they lived, worked and educated their children at home, he said. The networks introduced a shopping checklist on their homepages to help their audience focus on what they need while self-isolating and tweaked its programming in response to changing consumer needs, he added. The companies have seen greater consumer interest in culinary, fitness, wellness, gaming, electronics and home office equipment.
"The good news for us in a bad situation has been that people are at home and more engaged in both TV and spending time online," George said. "We think about various forms of livestream internet shopping … but all of them [are] growing at double-digit or even triple-digit rates."
Post-pandemic plans
Before the pandemic, the company had taken steps to enter the streaming service market and reach consumers beyond cable and social media. Last year, the company combined the QVC and HSN apps, and the channels have been available for Roku users for a few years, George noted. The company also began streaming on Amazon Fire TV in August 2019, he said, adding that streaming via Roku and Amazon Fire has accelerated during the pandemic.
"As a consumer base, we're starved for interaction. We're starved for engagement. HSN and QVC are built to deliver on that promise."
Greg Portell
Lead Partner, Kearney
On the consumer side of things, the networks will likely focus on offering products that suit the needs of consumers working from home for the long term, George said. The company will also lean into its website and mobile capabilities as well as livestreaming, he said
"We're really looking hard at how to continue to expand our mix and range of products for the home, so that we can be a relevant retailer as the consumer behavior evolves," George said.
The telecommerce veteran has a unique opportunity to succeed during the coronavirus pandemic, because it already has the infrastructure to create shopping experiences that digital-only channels cannot, said Greg Portell, lead partner in the global consumer practice of Kearney.
"As a consumer base, we're starved for interaction. We're starved for engagement. HSN and QVC are built to deliver on that promise," Portell said.
Prior to the coronavirus pandemic, QVC and HSN needed to adapt to an increasingly mobile consumer, but the outbreak has made consumers less able to shop in stores, which plays to the TV channels' strength, Portell said. It remains to be seen whether the networks can build and maintain momentum once consumers can move freely again, he said, adding that the channels will likely need to draw consumers through featuring certain celebrities, promotions and product categories in the future.
Lessons for fellow livestreamers
After the pandemic subsides, experts anticipate that livestreaming will continue to be an important channel for consumer connection, but platforms facilitating such streaming need to make adjustments to improve the overall user experience. Digital engagement in livestreaming is likely to continue after consumers can safely shop in stores again, but it won't remain as high as it is while consumers are socially distancing, said Erin Schmidt, beauty industry analyst at Coresight Research.
Though brands are testing out livestreaming through platforms like Facebook Live, those come with two obstacles: a separation from the retailer and a less engaging shopping experience, Portell said. Unlike brands using newer livestreaming tools, QVC and HSN have built and honed a multidimensional remote shopping experience, he said.
Social networks are "not the retailer's channel, so instantly you're driving traffic for someone else rather than yourself even if you do make the transaction," Portell said. "It's still a relatively flat medium. It doesn't have the natural built-in connectivity that HSN and QVC have developed through their platform."
On the other hand, small businesses don't have the infrastructure of a dedicated channel like QVC and HSN, and they rely on social media platforms to bring them audiences, said Daniel Mayer, CEO of BeLive, an Israel-based startup which helps small and mid-sized businesses conduct livestreams.
In China, livestreaming has been a substantial part of the retail sector before and during the pandemic, said Mayer and Schmidt. Forest Cabin, a Chinese cosmetics company, enlisted and trained its staffers to serve as influencers, Schmidt said. The revenue brought in from livestreaming broadcasts brought in as much revenue as four brick-and-mortar stores, she added.
A critical step for livestreaming to go more mainstream in the future is allowing consumers to purchase products that they've seen during the broadcast without having to leave the platform, Schmidt said. Chinese retailers already use Taobao, a Tmall tool that allows consumers to purchase goods without leaving the livestream, she said.
"While livestreaming has made a lot of strides within the past year and … a lot of brands are starting to see initial engagement with consumers and initial revenue increases, I think that could only go up in the future when consumers are able to actually purchase within the app," Schmidt said.
