Qurate Retail Inc., QVC. Inc.’s parent company, reported e-commerce revenue of $1.9 billion for the second quarter ended June 30. This represents 59.4% of the quarter’s revenue of $3.2 billion.
The following retail brands operate under Qurate: TV and web retailer QVC Inc. and flash-sale site Zulily.com, as well as HSN and Cornerstone brands including Ballard Designs, Frontgate, Garnet Hill, Grandin Road and Improvements. The parent company acquired HSN and its brands in mid-2017 for $2.1 billion.
Zulily had the most sales growth among Qurate’s assets because of “strong customer growth,” Qurate Retail CEO Michael George said according to a SeekingAlpha transcript. In fact, total customers for Zulily.com grew 29%, the retailer reported.
Zulily uses machine learning for customer retention and acquisition, and Qurate is looking to expand these capabilities across its brands. The marketing technology allows the retailer to automate and scale its ad-generation process to target shoppers in the most cost-effective ways, he said.
“Over the last two months, we’ve been able to use a modest level of marketing spend to, in some cases, double or better than double the viewership of top-rated programs like ‘In The Kitchen with David’ and ‘Friday Night Beauty’ on Facebook Live,” George said.
QVC is working on attracting a “new generation of consumers” with digital-only merchandise and programming. For example, it is launching new beauty brands it is marketing on Instagram. Plus, in the U.K. in Q4, it is launching a new e-commerce site for beauty products called Kelly.
QVC also held a Black Friday in July event that had 12 hours of live programs. The event “significantly exceeded expectations,” George said. QVC attracted five million viewers on Facebook Live, which is eight-times the viewership it sees on a typical day, driving “meaningful incremental sales,” he said. Plus, it was QVC’s highest single day for customer acquisitions in the month.
Meanwhile, the TV commerce giant is still working on “turning around” HSN and “the quality of sales,” George said. “There’s a lot more to do here, but we’re excited about a number of compelling brand launches later this fall and other initiatives aimed at moderating the sales erosion,” he said.
Qurate recently integrated HSN’s marketing team into the Qurate retail in-house marketing team. Plus, Qurate hired 20 marketing employees within the last few months.
Within the Cornerstone brands, Frontgate is the e-commerce business dragging down results, while Garnet Hill and Ballard Designs had strong growth in the quarter, George said. Qurate in June appointed Tom Bazzone as president of Frontgate.
HSN’s results are only included in Qurate Retail’s results beginning Jan. 1, so year-over-year comparable numbers of the Qurate brand would not show an accurate picture. Here’s how e-commerce sales broke down for each brand:
QVC:
- QVC’s Q2 2018 e-commerce sales increased to $1.04 billion, up 8.0% from $963 million in Q2 2017.
- E-commerce sales represented 50.0% of total sales for QVC, up from 48.7%.
- QVC’s U.S. e-commerce sales were $796 million, up 6.7% from $746 million, and represented 55.8% of total sales, up from 54.6% of sales.
- QVC’s international e-commerce sales increased 12.9% to $245 million, up from $217 million.
- International e-commerce sales represented 37.3% of international sales, up from 35.5%.
HSN:
- E-commerce sales decreased 13.0% year over year in Q2 2018 to $280 million, down from $322 million Q2 2017.
- E-commerce represented 59.2% of sales, up from 60.4%.
Cornerstone brands:
- E-commerce sales decreased 6.9% to $188 million in Q2 2018, down from $202 million in Q2 2017.
- E-commerce represented 71.9% of sales compared with 70.2% in Q2 2017.
Zulily:
- Zulily’s sales increased 13.1% in Q2 2018 to $415 million, up from $367 million in Q2 2017.
Personnel changes within the quarter include:
- Mary Campbell, who has been with the retailer for 20 years, is now chief merchandising and interactive officer.
- Jeff Yurcisin, former Amazon vice president of Softlines Private Brand, is now CEO and president of Zulily.
- Aidan O’Meara, a former VF Corp. veteran for 25 years, will be leading QVC International.
QVC Group is No. 7 in the Internet Retailer 2018 Top 1000, and HSN is No. 28.
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