QVC Plus, the home-shopping TV service’s streaming brand, on Friday is launching Outdoor Escape, a new around-the-clock streaming channel dedicated to gardening and outdoor living.

The seasonal channel will be hosted by popular QVC personality and gardening expert Sandra Bennett, Soumya Sriraman, who joined Qurate Retail Group last year as president of streaming, told Broadcasting+Cable.

Outdoor Escape will feature lifestyle shows from QVC and HSN and give viewers easy access to purchasing products.

Qurate‘s QVC and HSN, the oldest names in shoppable TV, are evolving their approach as streaming creates new ways for viewers to buy what they see on the screen.

While more traditional programmers are embracing shoppable TV technology to create incremental revenue streams, one of Sriraman’s priorities is making programming more human. 

"This is a company that has taken to heart storytelling and bringing emotion into commerce is at the core of what it does every single day,” said Sriraman, who was with Britbox and Amazon before joining Qurate.

At the same time, adding distribution via streaming gives QVC more opportunities to reach viewers and viewers more ways to consume programming, interact and make transactions.

The company's  QVC and HSN linear channels are available as free ad-supported streaming TV channels (FAST). s QVC Plus and HSN Plus stream on platforms including  Roku, Amazon Fire, LG, Xfinity Flx and Samsung Smart TV. It is also looking to create new free ad-supported streaming TV (FAST) channels at a time when consumers are cutting the cord with traditional cable.

Last year, it created a seasonal Christmas in July channel.

“We found that to be hugely successful with our audience,” Sriraman said. “Audiences are responding to this idea of giving them channels they can watch and discover new products and new content as they sit back and watch.”

Gardening has been a mainstay on QVC’s main channel, making the category ripe for a streaming channel. For now, Outdoor Escape is available only on QVC’s app, but another channel, The Big Dish, is in the process of being distributed on more FAST platforms.

The company will see how Outdoor Escape performs. There’s a chance it will keep running past the summer. And the company has more seasonal channels in the pipeline. Some may be based on lifestyle categories, others may be built around the network’s personalities.

More Ways for Viewers to Buy

With streaming, viewers will have more ways to buy, including interacting with QR codes. Some viewers still like to call the channel to make purchases, though, Sriraman said. “We’re not limiting the ways people want to buy.”

On traditional TV, QVC pioneered shop-by-remote technology that the company will be rolling out on its streaming channel.

“The audience’s ability to transact and watch seamlessly is important, so the more opportunity someone has to get access to your channel, the more likely they are to deeper with you,” she said.

Streaming means “we now are not tethered to someone’s cable box,“ Sriraman said. ”You can take us with you wherever you go and you can watch our hosts that we know our audiences love, and you can discover things without having to be live.”

Sriraman is aware that traditional TV is looking for ways to build its commerce business. “It feels like everyone thinking about it as interactive ads,“ she said. ”We’ve always talked about it as interactive programming.”

It would appear likely that given the improvements in connectivity and technology, streaming viewers buy more stuff than TV viewers, but Sriraman said the company was not sharing that data. “We can say we’re super-excited about what we’ve seen since last year, and really excited about how the expansion of distribution on FAST is additive,” she said.

Sriraman is also looking forward to the launch of a new show, Design School with Ballard Designs, which will launch on QVC Plus March 24.

In each 30-minute episode, Ballard Design’s Caroline McDonald will guide viewers through the design process while tackling a challenge sent in by QVC viewers.

Design School will include shoppable entertainment features.

The show is designed to bring Ballard Design, traditionally a catalog brand, to life, Sriraman said.

“We all know that there are many things that are better told with video than in print or just static digital,” she said. "We’re very excited about the show.” ■

Qurate Retail Group said its QVC Plus and HSN Plus combined streaming service has launched on Samsung Smart TVs.

The app offers the only streaming shopping service on Samsung Smart TVs that lets viewers complete purchases and provides multiple live channels — QVC, QVC2, QVC3, HSN and HSN2 — and video-on-demand.

“Our QVC Plus and HSN Plus streaming experience is our most complete live-stream shopping experience, with virtually all of our programming in one package that makes it easy to peruse, discover and shop great finds,” said David Apostolico, senior VP, platform strategy, development & Distribution, v-Commerce Ventures at Qurate. “We already have many fans enjoying our content via popular FAST platform, Samsung TV Plus. Now, Samsung Smart TV users can also shop and enjoy using our app, with original streaming content they’ll love. We look forward to offering our customers this new way to engage with us via millions of Samsung devices and welcoming new customers on Samsung Smart TVs.”

Also: Qurate Retail Hires Soumya Sriraman From Amazon To Boost QVC Streaming

Qurate Retail has been looking to expand the reach of its original v-commerce experiences across new media and digital platforms. The QVC Plus and HSN Plus streaming experience is part of v-Commerce Ventures, a new business unit designed to accelerate Qurate Retail ownership of digital live streaming shopping. 

Programs available through the app include Cooking With Curtis, with Michelin Star Chef Curtis Stone; Total Look, which shows shoppers how to style a single apparel piece in three different ways; and QVC en Español, a collection of QVC’s first-ever Spanish-language shows. ■

Qurate Retail Group, parent of TV shopping channels QVC and HSN, said it hired Soumya Sriraman as president of streaming as the company looks to build its streaming commerce business. 

Sriraman, previously head of Prime Video Channels at Amazon, joins Qurate Retail as it executes Project Athens, a three-year turnaround plan designed to stabilize its core businesses and expand the $8.3 billion in video-commerce revenue generated by its streaming operations.

The company also named Stacy Bowe chief merchandising officer, QVC U.S. Bowe held senior merchandising positions at G-III Apparel Group and Macy’s.

“These appointments reflect Qurate Retail Group’s ability to attract the most accomplished and ambitious executive talent in retail,” said Qurate Retail CEO David Rawlinson. “Our vCommerce teams — QVC, HSN and vCommerce Ventures — are disrupting video shopping and we believe we have a right to win in this growing industry. In addition, we are accelerating the pace of change within Qurate Retail Group through Project Athens, our turnaround plan, which touches nearly every facet of our business. We’re pleased to welcome Soumya and Stacy to our team.”

In her newly created post, Sriraman will head Qurate Retail's streaming commerce businesses including QVC Plus and HSN Plus, as well as the networks' presence on digital livestreaming TV.

Reporting to Mary Campbell, president of vCommerce Ventures at Qurate effective Wednesday, she is expected to expand the staff of the company's streaming unit, the company said.

Before Amazon, she was founding CEO of the BritBox SVOD service. Previously she held positions with BBC Studios, Tartan, Vivendi Universal, Warner Bros. and Universal Studios.

Bowe will oversee QVC's Buying, Planning & Programming organization and will lead QVC's Design Development & Global Sourcing unit, an in-house agency that brings new brands, products and concepts to life in apparel, accessories, outerwear and home décor

Effective Tuesday, Bowe reports to Mike Fitzharris, president of QVC U.S. ■

Qurate Retail, the parent company of  QVC and HSN, said former Nielsen executive David Rawlinson II will become president and CEO effective Oct. 1.

Rawlinson was hired by Nielsen in 2020 to run its Global Connect Business, which was renamed Nielsen IQ. It was sold to Advent International for $2.7 billion earlier this year.

He will succeed Mike George after a two-month transition period, beginning Aug. 1.

Qurate was formerly known as Liberty Interactive and is part of John Malone’s portfolio.

Also Read: John Malone Agrees To Sell Qurate Super-Voting Stake to Greg Maffei for Nearly $400 Million

“We are pleased to welcome David Rawlinson to the Qurate family," said Greg Maffei, Qurate Retail executive chairman. "David brings an impressive track record of success, most recently with two storied brands, Nielsen and Grainger. At these companies, David was a transformational leader and successfully managed the businesses through evolutionary transitions. His knowledge of global e-commerce, understanding of consumer trends and focus on mission and culture as a purpose-driven leader make him a natural fit for Qurate Retail.”

Before joining Nielsen, Rawlinson was president of Grainger Global Online. He has also worked at ITT Exelis and served as a White House Fellow and held posts in the Bush and Obama administrations.

“Qurate Retail operates as a unique and powerful enterprise. The world of shopping has been forever changed by the pandemic and these brands have the international scale, customer affinity, and expertise in driving and meeting demand across multiple platforms to define the future of experiential retail,” said Rawlinson.

Cable legend John Malone, just days after converting his super-voting shares in Discovery Inc. to common stock for no premium to help facilitate its merger with WarnerMedia, has agreed to sell his Class B shares on TV and online retailer Qurate Retail Group to long-time lieutenant Greg Maffei, for about $400 million in cash or stock.

News of the filing first appeared in The Information. 

Qurate includes the two largest home shopping channels -- QVC and HSN -- as well as online retailer Zulily, Cornerstone Brands and green energy and other investments. .  

Malone, 80, helped found the modern cable business as chairman of Tele-Communications Inc., and has left his mark on practically every major cable deal in the past 20 years. He agreed on May 18 to sell his Qurate super-voting shares, which give him 41% voting rights in the company, to Maffei for $14 per share, according to Securities and Exchange Commission documents. Qurate stock currently trades around $13 per share. According to the filing, Malone would get paid in either cash, stock “or such other form of consideration as to which Mr. Maffei and Mr. Malone may mutually agree.”  

Maffei, who is CEO of Liberty Media and chairman of Qurate and several other Liberty holdings, joined Malone in 2005 after stints at Microsoft,  360Networks and Oracle. The two have been partners on several big deals, including the 2013 purchase of a 27% interest in Charter Communications. 

According to the SEC document, Malone agreed to the sale on May 18, pending board approvals. The document added that while he supports Qurate’s long-term strategy, he wanted to accept Maffei's offer “because it would provide flexibility for certain long-term estate and tax planning goals in light of potential changes in federal tax laws.”

The document continued that the sale is contingent on the approval of Qurate’s board of directors. Qurate also has call rights to Malone’s Class B shares, and if the company exercises that right, Malone said he would prefer to receive payment in the form of Qurate common stock, “such that he would continue to hold a substantial investment in Qurate Retail.”

Malone earlier agreed to convert his Class B super-voting shares in Discovery, which usually carry 10 votes each, on a 1:1 basis into common shares for no premium, a move that helped Discovery move forward with its planned merger with WarnerMedia. In a statement after that deal was announced, Malone said that he neither asked for nor received a premium for converting his Discovery stake. 

“I believe we are creating real value for shareholders and a legacy investment for my grandkids,” Malone said in the statement. 

Discovery’s super voting shares usually trade at around the same price of its common stock, but in the past several months, because of a sell-off by hedge fund Archegos Capital (which also shorted ViacomCBS stock), their value has soared. Bloomberg estimated that Discovery’s Class B shares have traded as high as $128 each at one point -- more than four times the Class A share price of around $32 per share. By converting his Class B shares on a one-for-one basis, Bloomberg estimated that Malone could lose about $280 million on the deal. 

That is in contrast to Discovery’s other major holder of super-voting shares -- Advance Publications, controlled by publishing giants the Newhouse family -- which according to Bloomberg will receive 13.1 shares of the new entity for every Class B share they own. Advance also will receive  the right to nominate two board members to the new entity.

Some analysts saw Malone’s Discovery deal as his way of helping to push the transaction forward. And he still will be a large shareholder after the deal closes, meaning he will participate in any upside in the stock price in the new entity. Some have predicted that the new Discovery-WarnerMedia could be valued at as much as $46 per share, well above the current $32 price of the stock on Thursday. 

Comscore, whose weak financial position has hampered its ability to compete as a provider of media measurement, has wiped out its debt with a $204 million strategic investment from Charter Communications, Qurate Retail and Cerberus.

In addition to cleaning up its balance sheet, the deal gives Comscore access to data that will help it provide the new types of audience and impression based measurement that are being demanded by a changing media and advertising industry.

Also Read: ‘New Nielsen’ Introduced at Firm’s Investor Day

The deal follows a lengthy strategic review at Comscore. 

At the same time, Nielsen, the leader in the TV measurement market, also conducted a strategic review. It would end up agreeing to sell its Global Connect business for $2.7 billion in November. Nielsen also announced in December plans to launch Nielsen One, which will use big data to measure all media across screens and advertising on all platforms.

Comscore said that with its new partners, it will be able to move more swiftly to provide more accurate measurement for brands, agencies and media sellers, give local markets more data for media measurement and provide smaller and independent networks with better viewership information.

“The retirement of debt provides the company with the financial flexibility to execute our plan. The investment and commercial agreements we announced today will supercharge our ability to deliver trusted cross-platform measurement for all customers. We are built to deliver now,” said Bill Livek, CEO of Comscore.

As part of the transaction Charter will provide enhanced access and rights to use its consumer-level data under a 10-year license. 

Also Read: Comscore in Breakthrough Deal for Comcast TV Data

Last year, Comscore signed a deal giving its access to data from Comcast. That deal is being extended.

The Charter deal will also make Comscore Charter’s preferred local measurement provider for Charter’s advertising business, including its addressable advertising business.

With Charter operating in New York and Los Angeles, Livek said Comscore will be able to provide data in those markets that no other company can match.

“The time has finally come for Comscore, with its industry-leading impression-based data sets, to be able to offer advertisers, agencies and inventory owners the kind of granular measurement, attribution and reporting they will need to compete in our high-tech world. As people continue to consume content in different ways and on multiple platforms, our investment in Comscore will further enhance the television industry and Spectrum Reach’s ability to provide marketers and advertisers with effective and measurable data-driven solutions,” said David Kline, executive VP at Charter and president of its advertising sales unit, Spectrum Reach.

“More effective audience measurement will help clients to better reach targeted audiences throughout the communities we serve and ensure a greater return on their advertising investment," Kline said.

Cerberus, whose other holdings include the Albertsons grocery chain and Chrysler, will be providing expertise in advanced data and analytics, programmatic ads and media optimization.

“We look forward to partnering with the Comscore management team, Charter and Qurate to build on Comscore’s next phase of transformation and growth,” said Matt Zames, president of Cerberus. “With Comscore’s leading data and analytics capabilities, we are excited to apply our expertise and resources to help build on its portfolio of trusted products and drive value for shareholders.”

Qurate Retail, controlled by Liberty Interactive, owns QVC and HSN will be providing expertise on eCommerce. 

Advertising agency and media buyer WPP is already a Comscore investor.

Comscore will continue to operate as a standalone company under current management. Charter, Qurate and Cerberus will each get two seats on Comscore’s board of directors, which will be expanded to 10 members.

Comscore has been in turmoil since irregularities were found in the company’s books four years ago. Since then the company has gone through a painstaking re-audit, several CEOs and reported operating losses.

In November, the company reported an $11 million third-quarter loss.

The investment from Charter, Qurate and Cerberus will enable Comscore to repay debt headed by Starboard Value LP.

A shareholder vote to ratify the agreement is expected to be held in the first quarter of 2021.

In the race to pick the pandemic’s winners and losers, some executives argue that the deadly crisis could make home shopping and e-commerce a more important part of the TV industry.

In sharp contrast to the difficulties faced by traditional media businesses, which have been roiled by slumping ad revenue, layoffs and production shutdowns, government-mandated stay-at-home orders have boosted TV viewing, producing a marked rise in home shopping for products that consumers normally buy in shuttered brick-and-mortar retail outlets.

RELATED: Pandemic Changes the Home Shopping Mix

“The stay-at-home orders are producing a seismic shift in the way consumers shop,” said Brian Meehan, co-founder and chief operating officer of Knocking, a content creation and commerce company that works with media partners like Univision Communications, Cox Media Group and Sinclair Broadcast Group on their e-commerce efforts. “Every day is now Cyber Monday, and every day is bigger than the last.”

Meehan and others contend the crisis could prompt a wider shift towards e-commerce in the media sector. Knocking founder and CEO Markus Reinmund said a long-term decline in traditional linear TV advertising, accelerated by the pandemic, will push media companies to find better ways to monetize their content.

“In a short, two-month time frame, stay-at-home orders have really accelerated the long-term trend in consumer markets towards home shopping,” Reinmund said. “Consumers have more time to engage with media and TV viewing is up. But media companies are not profiting from this because they are seeing a dramatic decline in ad revenue. So, finding ways to be less dependent on ads and actually earn a share of the consumer spending is becoming a very attractive idea.”

Interest in that idea can be seen in efforts by Qurate Retail, NBCUniversal, Univision, ABC, Amazon Studios and Discovery, as well as major TV-station groups like Sinclair and Cox Media.

“The overall market for home shopping and selling direct to consumers is obviously something that will only continue to grow,” NBCUniversal executive VP, head of marketing and advertising creative Josh Feldman said.

Last year, Comcast-owned NBCU launched ShoppableTV, which encouraged consumers to use their smartphones to buy products while watching such programming as French Open tennis, the Tour de France cycling race, Songland and Very Cavallari simply by taking a photo of a code on the screen.

This June, NBCU will dive even deeper into e-commerce with the launch of the NBCUniversal Checkout commerce system, which will simplify the process of buying goods via ShoppableTV content and branded videos and web articles.

Clicking with Commerce

In the pandemic’s early days, though, much of the e-commerce growth has been gobbled up by the already dominant giant online retailers. Amazon, for example, reported $75.5 billion in net sales of goods and services in the first quarter of 2020, up 26% from a year earlier, with net sales from its online stores hitting $36.7 billion in Q1, up 24% from Q1 2019. The tech giant has forecasted an 18% to 28% jump in total net sales for Q2 of 2020.

How much of this growing market can be captured by TV companies is open to question, given that most of the industry has little experience with retail. It’s also unclear if the growth in e-commerce makes up for lost ad revenue from brick-and-mortar retailers that are in increasingly precarious financial straits. Retailers accounted for 14.5% of the TV ad spend in 2019, MediaRadar estimated.

A recent survey by Elevate at the media research and consulting firm SmithGeiger found 46% of Americans were spending more time shopping online. Half of the people sampled also said they spent more time watching TV for entertainment, and 41% noted that they were watching more local news.

“The shift in shopping patterns is here to stay,” noted Andrew Finlayson, executive VP of digital strategies at SmithGeiger, which does work for Knocking. That, in his view, opens up e-commerce opportunities for TV companies. “Consumers that were resistant and not shopping at home now have the full experience of doing it and in many cases might be continuing this behavior in the future.”

Another trend driving increased interest is the growing use of streaming platforms. In the first quarter, Roku had 39.8 million active accounts and time spent streaming as up 49% year over year, VP of content distribution Tedd Cittadine said.

“This is having a positive impact lifting the viewership for many of our channel partners, including the home-shopping channels that have seen, on average, double-digit increases in viewership time during the first three months of 2020,” he said.

Viewership gains are welcome news for traditional home-shopping channels, which have struggled in recent years because of larger industry-wide declines in pay TV subscriptions and linear TV viewing.

In 2019, Qurate Retail, which owns QVC and HSN, reported a 4% drop in sales to $13.46 billion.

iMediaBrands, the owner of ShopHQ and the Bulldog Shopping Network, saw even bigger declines, with net sales of $501.8 million for the fiscal year ending Feb. 1, 2020, down from $596.6 million in fiscal 2018.

Qurate Retail responded to the decline with a major expansion in digital operations. In August 2019, it launched a live streaming app with on-demand video and six channels on Roku and Amazon’s Fire TV. The Roku app now has more than 3 million installs, making it one of the platform’s top 25 free apps, said Todd Sprinkle, QVC’s senior VP of brand creative and production.

Qurate brands also have bolstered their presence on social-media platforms such as Facebook, Instagram and YouTube, with over 350 hours of content each week on Facebook Live; added linear streams on smart TV platforms like Samsung TV Plus and LG Channel Plus; and an expanded presence on local broadcast stations.

“Over the years, the model has evolved from linear TV into a multiplatform shopping experience that spans web, broadcast, mobile and social platforms,” QVC’s Sprinkle said. “We can reach a greater proportion of households today than we could 10 years ago,” even with multichannel cord-cutting.

Since the start of the pandemic, Sprinkle said, “we are seeing increased interest online in items that are helpful in the home,” with page views for a number of items increasing in March. Categories upwardly affected include food (up 66% from a year earlier on QVC and 48% on HSN.com), home-office gear (77% on QVC.com and 234% on HSN.com), wellness (up 143% on HSN.com) and health and fitness (up 126% on HSN.com).

Check It Out

These trends are occurring as a number of major programmers are rethinking their business models with new ad products and e-commerce applications.

Early efforts in that direction seem promising, with companies like Knocking, Univision and NBCU reporting successful e-commerce efforts.

“We’ve had an incredible response with the conversion rate of ShoppableTV being around 30% higher than the average e-commerce conversion rate,” NBCUniversal’s Feldman said.

Next month’s launch of NBCUniversal Checkout will further strengthen those efforts] by simplifying the creation of e-commerce offers and streamlining the consumer experience, Feldman said.

RELATED: Working for Pandemic Relief

Checkout is part of NBCU’s On Platform ad offering and its larger push into advanced advertising systems.

“Checkout can turn any branded video or web article into a native shoppable experience,” he said. “You can go to a video of a holiday gift buying guide and buy multiple brands in one checkout in the most frictionless way without the viewer ever leaving the environment they came for.”

A shift in viewing and consumer focus towards digital media and streaming should make such efforts even easier.

Univision, for example, currently has e-commerce offerings for national linear TV, local TV stations, online, social media and radio. “Being on multiple platforms was a key part of our strategy from the start,” Univision Local Media senior VP of growth initiatives John Buergler told Multichannel News.

In June of 2019, Univision partnered with Knocking to launch Gangas & Deals, a digital shopping market for Hispanics, with six- to eight-minute segments featuring upcoming brands on the morning show Despierta America. As part of the multiplatform efforts, Univision posts clickable materials on Instagram, where consumers can easily buy products.

Adding e-commerce options to the video on streaming platforms would be a logical next step that would greatly simplify the purchasing process, though Univision and most other media companies have not yet made that move.

Discovery’s Food Network Kitchen subscription video-on-demand service launched last October on Amazon’s Alexa, Fire TV and other platforms with features that would allow users in select markets to buy ingredients for some of its cooking show lessons.

And Amazon Prime Video’s original series Making the Cut with Heidi Klum and Tim Gunn, which premiered in March, allows viewers to purchase fashions featured in the competition show.

Data-Driven Dollars

Cittadine said Roku’s connected-TV platform already has a number of attractive features for e-commerce. The Roku Pay setup, used to buy app subscriptions on the platform, can streamline the checkout process, and Roku’s extensive data collection and analytics efforts could help companies promote their products, create targeted ads and develop more compelling e-commerce strategies.

“We’re still in the early days of shopping on streaming services,” Cittadine said. “But you can imagine the opportunities this creates when you can target the right consumer who is looking for a product with embedded purchasing power and interactivity.”

That makes improved data and measurement of audience engagement one of the key opportunities surrounding e-commerce efforts.

Last fall, Knocking began testing short, one-to-three-minute “Local Steals & Deals” segments that could be placed in local newscasts. In March, it fully launched the product, which now airs on stations owned by TV groups including Cox Media and Sinclair.

The exact format is up to the stations. Typically, a local anchor or personality will introduce the segment, which is produced by Knocking and hosted by former QVC personality Lisa Robertson. Local Steals & Deals features upcoming brands selected by Knocking and is typically part of the newscast or show, rather than an ad.

The segments are crafted as editorial content, with brands that have compelling stories about the entrepreneur behind the companies or the causes they support, rather than straight product pitches, Knocking executives said. As editorial content, they also don’t have to take away from ad time and have the long-term benefit of providing valuable data about the consumers.

“It is a fundamental shift in the business model for media,” Knocking’s Reinmund said. “Instead of just exposing them to an ad, I can go way beyond that. I’ll have actionable deep-engagement data and I can build a relationship with a consumer that will be much deeper and more valuable.”  

The pandemic has prompted a rise in the number of people buying products from home, but for top shopping channels like QVC and HSN, the increase in interest was a mixed blessing as customers shifted from buying high-margin offerings like fashion and jewelry to less-profitable home categories.

QVC and HSN parent Qurate Retail Group, which also includes online retailer Zulily, saw revenue in the first quarter dip about 5%, to $2.9 billion. Operating income fell 20% as the shift to low-margin offerings and an increase in costs associated with its fulfillment centers and employees during the pandemic ate into profits.

About 10,000 Qurate employees are now working from home and the company has spent about $19 million in emergency pay and benefits for its workers. Qurate has committed about $10 million to support urgent needs in its communities, including donating airtime for public-service announcements, participating in the Small Business Spotlight initiative with the National Retail Federation; a global PPE-creation project funding artisans globally with female-founded nonprofit group Nest; and relief programs like Meals on Wheels and No Kid Hungry.

Qurate president and CEO Mike George said sales began to rebound late in March and have continued into April. Qurate’s online businesses had strong showings in the quarter, with traffic on the QVC website up about 30% compared to the prior year and live streaming over social media rising 100%. Home viewership at the QVC and HSN channels was up 10% in the period.

On a conference call with analysts, George said though it is still early in the second quarter, the April growth is consistent and evident across several product segments.

“We’ve seen it across new customers, reactivated customers, occasional customers and core customers,” George said. “We’ve seen it across a range of home categories, electronic categories, beauty categories. The only place we’re not seeing it is in apparel, accessories and jewelry. So I’d characterize it as consistent, broad-based sales growth.”

The shift wasn’t exactly an accident, George added. Qurate foresaw the changes in buying habits associated with the pandemic, and tailored its message and offerings to meet them.

Tailored to the Times

Qurate blew up most of its on-air
programming calendar, inventing new programs that would address the moment, like Love Your Home, a home-products show that replaced Beauty iQ, and airing afternoon miniseries to take advantage of an increase in viewership during that time slot.

QVC, HSN and Zulily also beefed up their home-products inventories to focus on new trending categories like home, sanitation, food and storage, business tools, tech resources for distance learning and
beautification. The company also leaned
into its social media platform, including the #PostAtHome campaign on QVC, which featured hosts live streaming from their homes, and Cornerstone Brands’ Grandin Roads #MakeYourDoorHappy, encouraging viewers to share their front door decorations on social media.

QVC and HSN saw increases in home-fitness products — sales of bikes, treadmills and ellipticals were all up — as well as vitamin supplements and home-office products like laptops, tablets, printers and monitors. Viewers also were interested in boosting connectivity with family and friends as shelter-in-place orders continued, leading to increased sales of video-calling devices like Amazon’s Echo Show and Facebook Portal.

Qurate said about two-thirds of
new customers in the quarter came in organically, reflecting the power of its brands. Now, George said, Qurate will step up marketing spending to attract and retain new customers.

“We’ve seen improved efficiency across all marketing channels, including paid social, which gives us a powerful platform to highlight our unique shopping experience and are moving quickly to convert new customers into lifetime customers with campaigns that build relationships by focusing on what makes us unique and targeted emails, digital nurturing through retargeting and the piloting of additional social channels and ad formats,” George said on the call.

Lower Margins, Higher Costs

Evercore ISI analyst Oliver Wintermantel wrote in a research note that while the April sales growth is encouraging — he revised his Q2 revenue estimates upward to a 1% decline — the mix in products to some lower-profit merchandise comes at a time of additional operating costs related to the pandemic. Wintermantel expects EBITDA margins to fall another 100 to 150 basis points in Q2.

“Consumers adapted to the new stay-at-home mandates and the company adjusted its merchandising, programming and marketing to better meet the needs of its customers,” Wintermantel wrote. “That said, the product margin pressure due to category mix shifts continued and [Qurate] is incurring further COVID-related costs — including additional pay, reduced productivity in its fulfillment centers, which is leading to increased fulfillment times and additional bad debt reserves (in anticipation of the deteriorating economic situation).”