ROANOKE TIMES
Copyright (c) 1995, Roanoke Times
DATE: Sunday, December 17, 1995 TAG: 9512150055
SECTION: BUSINESS PAGE: G-1 EDITION: METRO
DATELINE: WEST CHESTER, PA.
SOURCE: CHERYL HALL DALLAS MORNING NEWS
Fitness princess Denise Austin is sprawled out in QVC's studio green room chatting happily on the telephone, basking in her just-finished on-camera selling success.
In a mere 20 minutes barely time to bead sweat the aerobics-clad Austin has sold all 2,600 Prime Riders that the television retailer has to offer.
Her early morning TV appearance has been a quick and pleasant encore to her performance two weeks earlier, when in a single day, she enticed viewers to buy 38,000 cardiogliders for a total take of $4.2 million.
While some sell the sizzle, QVC sizzles the sell.
Austin and her Prime Rider embody what the cable shopping channel wants to pull off this Christmas: A trendy, celebrity-pitched product that will help QVC shed its cubic-zirconium image.
``I'm amused that people still think of us as that,'' says QVC marketing senior vice president Fred Siegel, without a trace of a smile. ``The big challenge is to differentiate ourselves and let people know what we are all about.''
So he's packed six weeks of holiday promotions and special programming that includes country musician Clint Black, leather goods by Coach and Mark Cross, Sony and RCA electronics and Mattel's Barbie Doll Collection. Not to overlook Engelbert Humperdinck and his new Christmas release.
QVC Inc. is a throwback to the future.
Like great store names in history, QVC creates theater in retailing. Its stage, however, is the modern mode of television and computer linkups.
As a virtual mall of the airwaves, it must achieve the intricacies of both retailing and showbiz, while overcoming problems inherent in selling stuff that customers can't touch, smell or try on.
``A lot of retailers have forgotten what it takes to be great,'' he says. ``Great, timely products displayed wonderfully, explained terrifically to the customer.''
And while many retailers are singing the Christmas blues, the chorus coming from these Pennsylvania foothills outside Philadelphia is decidedly chipper.
The biggest holiday-selling day in QVC history came the Sunday after Thanksgiving, when 322,000 orders were taken for 160 products to the tune of $11.6 million. That boosted the three-day weekend well past the $30 million mark.
Most retailers are loathe to give specific numbers. QVC makes sport of them noting, for example, that it took less than two hours to sell more than $1 million in Barbie paraphernalia last Sunday morning.
The show, which sold out 13 different items, was hosted by a living, breathing version of the famous doll.
The network heads into its 10th year as the undisputed king of TV selling, with 1995 revenue expected to reach $1.6 billion, up from $1.4 billion last year.
That's still small when compared with America's retail heavyweights. Dallas-based J.C. Penney Co., the nation's fifth-largest retailer, posted revenue of $20 billion last year. Big-Daddy Wal-Mart Stores Inc. weighed in at more than $82 billion.
But analysts say QVC's 15 percent annual growth rate indicates the company's long-term planning is heading in the right direction. They also shrug off any thought that the arrival of QVC's former boss at the helm of rival Home Shopping Network will shift QVC from its current steady course.
For their part, the folks in West Chester seem to welcome Barry Diller's reign at HSN, at least for the present. ``If they clean up the neighborhood, Siegel says, ``it makes the whole area more attractive.''
Customers who have an unpleasant shopping experience with other TV shopping services are less likely to try QVC, he says. ``There's been negative rub-off. There are those who equate us with them: the cheap 10-karat jewelry and carnival atmosphere. But there's a great difference between us and them.''
Much of QVC's efforts center on getting product to the market and in the hands of its customers faster, but not necessarily cheaper. QVC does not position itself as a discounter.
``One of the best things we do is fulfill,'' Siegel says. ``When you call us, the customer service representative will answer the phone within a ring and a half, the transaction takes seconds and chances are, it will be shipped out within hours not days.''
Customer reps can handle nearly 50,000 orders an hour. Its distribution centers can ship more than 400,000 packages a day.
Returns, the bane of any telemarketing operation, run 20 percent at QVC. That's one in five purchases, which is about par for the industry, but huge when compared with the less than 5 percent return rate experienced by traditional retailers.
In an effort to cut returns, QVC wants to cut the surprise factor, so that customers know exactly what they are buying and that it gets there in working order.
QVC rejected more than 3 million items last year because they failed quality testing. Forty percent of vendor samples pass muster, 10 percent fail outright, while half are approved on the condition that modifications are made.
In the ``test kitchen, a gold-plated serving piece sits in a polyurethane chamber, where it is being zapped with atmospheric hell to see if its no-tarnish guarantee holds up.''
Just down the hall, a cadre of headless tailor mannequins including ``Large Marge, a perfect 3X stand silently as a QVC designer measures a ladies' wind suit to see if its dimensions meet sizing criteria. A QVC size 10 is supposed to be a 10, not an 8 or a 12 no matter who makes it.''
In the Drop-Test Room, boxes are being thrown to the floor a half-dozen times or so to see if the manufacturer's package holds up and how its contents fare.
``We've become very mainstream and an acceptable way to shop,'' Siegel says. ``A lot of people are tuning in and watching us, even if they aren't buying from us. It's just a matter of time before they pick up a phone and say, Hey, I want that.''
As Siegel talks, his eyes subconsciously shift to one of two TVs silently monitoring QVC and its sister station, Q2. A 62-foot toy speedway being demonstrated on Q2 stops him mid-sentence.
Air time is money. Expensive money. So how QVC divvies it up is as crucial as how a grocer allots shelf space. Jewelry, which currently controls about six to eight hours of the QVC day, is being shrunk to expand focus on products for the home.
That has to be good news to Robb Cadigan, senior vice president of programming. Keeping the entertainment level up during a three-hour western jewelry show is a stretch by anyone's measure.
As QVC cameras zero in on a silver cameo pendant, the host describes its splendor in excruciating detail. Next up is a 20-strand silver bracelet that as the ruler shows is exactly 7 inches long.
``This is rather static, admits Cadigan, who oversees the broadcast lineup. Toys, tools and things that move are definitely more lively,'' he says. ``But jewelry is critical to the programming pace and mix. It's important to wind down.''
Nor does he want to kick a gift horse in the mouth. QVC's busiest day ever wasn't pre-Christmas. The Klondike Gold Rush Event, an all-day jewelry sell-a-thon Aug. 13, sold $18.3 million worth of baubles and gems.
Persuasive hosts are key. ``We look for people you'd like to talk to over the backyard fence,'' Cadigan says. ``People you can connect with for two or three hours. That's a long time on camera. It's an art.''
Cadigan, who has both broadcast and retail experience, doesn't care whether he's programming against Seinfeld. What he does worry about is what may be going on in the home at that time slot.
Products that don't take much explanation are good on weekday mornings when people are busy getting ready for work and children off to school.
Talk to the woman who directs QVC's worldwide buying operations, and you might wonder if you accidentally switched channels to CNN.
``We broke into our programming when Cal walked out on the field Sept. 6,'' says Darlene Daggett, executive vice president for merchandising, sales and product planning. ``In the next hour and a half, we sold $4 million worth of Cal Ripken products.''
In just moments after the Dallas Cowboys won the 1994 world championship, QVC sold 6,000 champ T-shirts, she adds. ``We're in the Super Bowl locker room selling the minute the game ends.''
During the worldwide launch on QVC, 17,000 units of Microsoft's Windows 95 software were sold for $1.5 million.
Daggett intends to be first with the hottest.
That means a streamlined process that gives great latitude to her top 25 buyers, who each purchase in excess of $50 million in products a year.
LENGTH: Long : 149 linesby CNB