QVC HSN Merger Forms Third Largest Retailer – So What?

qvc hsn merger

It was recently announced that QVC would acquire the final shares needed in order to fully own HSN. When these two iconic home shopping giants merge, they will create the third largest e-retailer in the world, second only to Amazon and Wal-Mart.

So will QVC become another mega-retailer looking to deliver automated options with mechanical efficiency or will they apply their formula for connecting with customers on TV to change the face of online sales?

The can opener experiment

In 1977, radio station owner Bud Paxson accepted 112 avocado-green can openers in lieu of payment from an advertiser. In order to recoup some of his money, Paxson decided to try and sell them on the air and recruited the help of a little-known radio show host, Bob Circosta. The two men didn’t think many of the can openers would sell and they both were surprised when all 112 sold out within an hour.

The dawn of home shopping

Thus began the dawn of home shopping. After the can opener experiment was such a success Paxson went on to launch the Home Shopping Network and Bob Circosta became the country’s first ever home shopping host. The launch changed the way Americans shopped almost overnight and HSN became a model that inspired hundreds – if not thousands – of shopping channels and infomercials.

For many years, HSN led the pack when it came to innovation and engaging with customers. In 2010, the company’s approach to exclusive branded material made headlines in the retail world.

The ‘Eat, Pray, Love’ campaign

One of their most popular – and successful – campaigns was connected to the book and movie ‘Eat, Pray, Love’. HSN worked with Sony to develop a line of clothing, accessories and other products tied to the movie. Sony then donated 2,500 copies of the book and hosted a movie premiere screening for the people who would be working in the call center associated with the product line.

Every employee was able to read the book and see the movie so that when customers called in and asked about a specific item, (“I loved the scarf she wore in Italy – where can I get it?”) they were able to match up what they wanted with what was available.

HSN the Innovator

It was an approach that gave HSN a much-needed boost. It also set the bar for branded and exclusive content which has since been copied by countless stores, cable channels, and websites. While HSN has been an innovator from Day One, that ability to think outside the box didn’t save them when online options simply began to overtake sales from traditional television home shopping options.

For many years both HSN and QVC plodded along and saw sales lag. But while HSN continued to flounder, QVC built up steam. On its own, QVC still flagged behind HSN in terms of sales, but as time went on, QVC not only grew, they began to partner with and buy out other retailing giants.

The growth of QVC

Between 2010 and 2015, QVC worked to position itself as a major retailer in as many regions as possible, starting with launching their channel in Italy. They partnered with China National Radio to take over operations of their shopping network and e-commerce websites. In 2013, they partnered with Ion Media Networks to bring its programming to a wider audience through broadcast television and digital cable subscriptions.

Year after year, QVC expanded their company and increased their partnerships, growing their business and expanding their customer base.

HSN, on the other hand, found itself struggling in the marketplace. As online and mobile shopping gained greater acceptance, both television based shopping giants found themselves suddenly competing with everyone from individual sellers on eBay and Etsy to global giants like Amazon.

In July of 2017, Liberty Interactive Corp, who already owned 38% of the stock in HSN, announced it would buy the remaining shares for its parent company, QVC. It is a move that not only makes QVC the leader when it comes to traditional home shopping, it also makes the company the third largest e-retailer in the world with a revenue of more than $14 billion annually.

QVC will pay $2.1 billion for the remaining control of HSN, though there’s been no word if QVC will make the payment in 1 million installments of $19.95.

The “great crack up” of the retail industry

But if you think QVC is positioning itself to become the next Amazon, CEO Mike George will be quick to shoot that theory down. In a presentation George gave to HSN employees, he discussed the “great crack up” the retail industry was currently undergoing.

“A few big, giant, global, scale based players winning and growing. Wonderful companies, monstrously efficient companies, but they practice a kind of joyless form of shopping,” he told the assembled employees.

But that’s where they were all about to make a difference, George said.

“What we believe in, together, what we share in common, is this belief that there’s a third way from brick-and-mortar, and from big scale e-commerce players. […] We believe that humanity still matters in shopping, that relationships matter, people matter, inspiration matters, joy matters, fun matters in shopping, and that’s a really special thing that we get to experience together.”

To be fair, QVC is no stranger to encouraging talent from within the company. When QVC acquired Zulily in 2015 they didn’t simply absorb the company into its parent brand. Zulily continues to operate online today much as it did before the merger. More to the point, talents at Zulily were identified and used to improve QVC as a whole.

To illustrate his point, George told the group about Zulily’s warehousing system. According to George, Zulily came to them with…

“a really good warehouse management system, homegrown, better than QVC’s. And so, no pride of authorship, we said, great, Zulily, go build a new warehouse management system for QVC. But Zulily built it, is building it on our behalf and it’s wonderful working with an amazing team of engineers and technologists out in Seattle on something that will really make a big difference.”

Putting the humanity back into home shopping

So, for HSN employees, there’s hope they can find new outlets to share their talents with a company that promotes itself as being the human side of convenience shopping. For the public, there’s the promise of a third way to shop easily. A company that aims to be more than big box retailers by promising to be less: Less hands off, less automated, less anonymous; More involved, more accessible, more human.

Somewhat ironically, QVC will be striving to put the ‘Home’ back into home shopping.

About the Author

Ryan Gerardi
Creative, resourceful, and resilient B2B sales and marketing technologist who works with people and businesses on a variety of levels to help elevate their game, their brand, and their businesses.
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