QVC Group’s total sales decline is slowing in the United States as e-commerce continues to make gains.
Overall U.S. sales decreased 2.8% to $1.37 billion in the first quarter ended March 31, compared with $1.41 billion in sales a year ago, the TV and web merchant reported this week. The Q1 decline, is an improvement over Q4 2016, when U.S. sales fell 6.7% year over year.
E-commerce revenue was a bright spot for the merchant in Q1. It increased 5.0% in the U.S. to $733 million from $698 million a year ago. E-commerce now represents 53.5% of U.S. revenue, up from 49.6% in Q1 2016. Mobile commerce revenue also is on an upward path, accounting for 61.1% of e-commerce revenue, up from 55.9%.
Globally, e-commerce accounts for 48.0% of QVC’s revenue, up from 44.5% a year ago. Likewise, mobile revenue is 62.2% of e-commerce revenue, an increase from 56.6%.
“We delivered strong improvement in the U.S. sales trend in Q1, and while we won’t be satisfied until we get to positive growth, this is an important progression in the second half of 2016,” CEO Michael George told investors an earnings call, according to a Seeking Alpha transcript. The web merchants plans to increase its U.S. sales by better balancing sales across categories to sell more high-margin goods, acquiring new customers and focusing on customer service to retain the customers it has, George said.
QVC plans to continue investing in its digital products, George said. For example, in Q2 the retailer will launch new versions of its iOS and Android apps that will feature more videos.
QVC.com and Zulily.com are both part of QVC Group, whose parent company is Liberty Interactive Corp. Liberty Interactive acquired Zulily on Oct. 1, 2015.
Zulily LLC also is amping up its digital marketing presence via Facebook Live and Hulu, said CEO Darrell Cavens. In addition, the web retailer uses machine learning to serve a personalized website to shoppers. The retailer launches 10,000 new items a day with 3-5 images per item.
“Through machine learning in 30-second intervals from 6 a.m. on, the website gets smarter and smarter, geared to every individual customer, and starts to present items, images, offers, events to the customers based on their historic behavior and what segments they fall into,” QVC’s George said. He hopes to use these same capabilities for QVC.com in the future.
QVC is No. 7 in the Internet Retailer 2017 Top 1000.
For the three months ended March 31, QVC also reported:
- Total QVC Group revenue, excluding sales from Zulily, of $1.97 billion a 2.0% decrease from $2.01 billion in Q1 2016.
- Total sales in the U.S. of $1.37 billion a 2.8% decrease from $1.41 billion.
- QVC Inc. international sales of $595 million a 1.8% decrease from $606 million. Outside the United States, QVC operates in the U.K., France, Germany, Italy, Japan and China.
- Zulily revenue of $359 million a 1.1% increase from $355 million.
- QVC Group net income of $91 million a 3.2% decrease from $94 million. Adjusted net income of $168 million, a 6.7% decrease from $180 million. Adjusted net income takes into account deferred tax benefits from acquiring Zulily in 2015, QVC says.
- 67% of Zulily orders were placed on a mobile device, up from 62% in Q1 of 2016.