You wake up, put the kettle on and slip a few slices in the toaster and poof! That dark cloud of smoke emitting from your once trusted toaster tells you to get a new toaster. It may be Sunday, it might be cold and rainy and you may not be able to jump out and find a toaster. iQVC has 39 different toasters available online. Still only available in the USA but since QVC now operates channels in the UK, Germany, Canada and Japan we no doubt will see an extension of this service in the near future.

Few companies and publications have taken notice of the webs most successful general merchandise retailer. Originally iQVC was launched on MSN on December 9, 1995 and the audience was estimated at less than 500,000. When iQVC opened on the World Wide Web, 1.9.96 the potential audience base at the time was estimated at 37 million. The average number of page views is 350,000 or about 1m hits per day. The most popular time to shop is midnight but there is a big weekend business and a peak at lunchtime as well, which indicates that people are checking iQVC out from the office.

The synergy between the TV and online operations are enlightening. Lets look at the facts.

The WWW ratings company, PC Meter has cited that iQVC is the number one general retailer on the web for the seventh consecutive month. The rating system is based on consumer usage.

iQVC garnered 1% of all WWW traffic that is the highest reach of any general merchandiser.

iQVC places in the top 2% of the more than 3,000 web sites ranked by PC Meter, with an average of 30 pages per visit.

iQVC shoppers visit the site twice a month for an average of 19 minutes per month. This is 400% greater than the average 4.5 minutes Internet users spend on other web sites.

iQVC's business since the Xmas season has averaged $1 million a month and every month since Christmas has seen an increase in sales.

iQVC sold $2m worth of goods from November 1 to Xmas 96' and received 1m hits per day. The average order was for $70 and iQVC attracted 10-15% new customers every day from the Internet.

FACT: QVC set a one day sales record of over $20m in 1996

iQVC is the interactive shopping division of the American electronic retail giant QVC. QVC has been in operation since 1986 and should achieve sales of some $2b in 1997. In 1996, QVC reached $1.83 b or more than Bloomingdales or Saks Fifth Avenue. The decision to launch an interactive service fits in with the corporate view that this is a natural direction for a company that has a great deal of interactive retail and direct marketing experience.

FACT: 7.12.96 QVC sold $8.2 million of the Packard Bell P 200 computers in 205 minutes

QVC employs some 8,700 people. iQVC, which now employs about a dozen people, can rely upon the highly developed logistics and fulfillment of QVC. iQVC benefits from this relationship in many other ways. Few companies on the Internet can tap into the extensive audience that QVC has. There is a blend between product, service and information which results in a frequent televised joint on-air and online programming anytime QVC airs or makes a mention of the iQVC URL, the servers reach capacity. The TV side has an estimated reach of some 61m US cable and satellite homes.

FACT: in 1996, QVC shipped 51m products, which averages out to 1,300 packages for every Post office in the United States.

Over 100,000 items from 180 merchandise categories and 22 individual product departments that offer products for the Home, Kitchen, Books, Sports, Jewelry, Electronics, Entertainment, Clothing, Computers, Photography and much more. Inventory is accessed in real-time, ordering is simple and confirmed instantaneously and items are out of the warehouse generally within 24 hours. Later this Autumn, iQVC will redesign their site and will reorganise by introducing "frames" so that online customers can more easily navigate through the site and locate the products they are interested in purchasing. The addition of "My iQVC" will allow shoppers to personalise the iQVC shopping experience to their personal interests. This includes the introduction of "My Style Advisor" which acts as an online fashion consultant that helps to choose clothes and jewellery best suited to the customer's figure and face. It also includes the addition of "My Mailing List" which allows the shopper to interact with iQVC by having them sign up for mailing lists that will notify the customer of upcoming programming events, product offers and special features that would be of interest to them personally.

The makeover will also include a "Feature Finder" which helps shoppers find the product that is right for them by allowing them to specify product features which are important to them. "Feature Dictionary" and "Product Advisor" are additions to this feature that give definitions to terms shoppers may not be familiar with and suggest attachments to products that the shopper may not be aware are available. The concepot is to help consumers make informed purchase decisions.

FACT: 13.6m people have made a purchase from QVC. 5m within the past 12 months. 60% of those who order the first time become repeat buyers.

How does iQVC's site stack up? The basic white background and graphics are just standard. What makes this site work is a powerful search engine that accommodates the tremendous product selection iQVC has available. The search engine contributes to the quick speed and ease of use of the site. What really makes this site work is the trusted backup of QVC. Attracting customers who are already loyal is easy but the additional traffic shows that new distribution channels attract new customers.

The link to the live broadcast side of QVC is really the first step towards true interactive commerce. Broadcast special sales events can be enhanced by the online presence. The online community can be drawn to the televised events. The possibility of Internet broadcasting is also apparent but still a short distance away from becoming practical.

FACT: QVC customers made 80m phone calls in 1996. QVC has 5,300 phone lines and can take 60,000 calls in one hour. 60% of calls are handled by operators while 40% of orders are processed automatically. Daily call average was 218,000 or one per 2.5 seconds.

About fifteen years ago there was a major shakeout of satellite companies in the US cable market and a similar event will occur soon with those trying to conduct business on the Internet. It is a natural feature of fledgling industries. iQVC has a much better chance of surviving the coming Internet shakeout because they are supported by a well managed company that operates efficiently and dynamically. QVC was also an industry innovator and understands direct marketing and their customers. QVC itself is a branded concept that many know and trust. QVC has brand names and more importantly can brand just about any concept or product they choose through the power of the TV. Their state of the art fulfilment and logistics system is already in place.

FACT: 3.4.97 QVC shipped their 250 millionth package. QVC's warehouses cover 13.5m square feet or the equivalent of 29 American football fields. How many Internet commercial sites can boast such a dynamic infrastructure?

The lessons for QVC will pay off big time when the convergence issue becomes a reality. Many are still disbelievers and after all the hype it is hard to blame them. But, we have seen a trend now that finally fits in with the technological reality. QVC will continue to grow both domestically and internationally and their experience with iQVC shows that they are preparing for a new future. A future where change occurs rapidly. QVC will remain flexible to these changes. The American cable company Comcast owns QVC and has recently partnered with Microsoft. There is little doubt that QVC will have not have a big role to play in the new Comcast/Microsoft commitment to the convergent strategy. The maturation and globalisation of the Internet market will just add traffic and sales to their existing system without a great deal of outlay. All iQVC has to do is keep to the community spirit of QVC and continue their policy to listen and respect their customers.

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© Budd Margolis / Through the Loop Consulting Ltd 1998-2000