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Can QVC Translate Its Pitch Online?

WEST CHESTER, Pa.

A FEW seconds before going on the air here, the QVC host Sandra Bennett hurries onto a set that looks like a suburban American kitchen. Rachael Ray is waiting behind a counter stacked with her cookware, on sale today at $49.76 for an eight-piece set.

Ms. Ray, the television personality, author and chef, knows a thing or two about selling. But QVC knows a little more.

“You tell me what to do, and that’s what I’ll do,” Ms. Ray tells Ms. Bennett.

As the cameras roll, Ms. Bennett embraces Ms. Ray like an old friend, tells her how cute she looks and notes that Ms. Ray’s cookware is selling quickly.

Behind the scenes — down a hallway and up some stairs — a producer, Stan Odenweller, scans nine television and computer screens. A live database shows him that all of the cookware is selling at a rate of $7,844 a minute, which is a little low for QVC.

Mr. Odenweller has a line into the women’s earpieces, and he nudges them to focus on pieces of the cookware that his databases show are popular with viewers — in this case, the red versions. Almost as soon as Ms. Bennett begins describing them, QVC’s call volume starts to spike.

“They’re loving the red,” Mr. Odenweller tells the two women.

When Ms. Ray lifts the lid off a red casserole dish, Ms. Bennett gushes over the variety of colors on offer, adding that the purple versions are brand new and that shoppers love them.

Mr. Odenweller glances at the database again. The purple version is selling like crazy, so Mr. Odenweller prompts Ms. Bennett: “And fewer than 300.”

“We now have fewer than 300 remaining, so if you want the purple, this could be it,” Ms. Bennett says.

Then: “150 remain ...”

“If you do want that purple, now is the time, only 150 remaining,” Ms. Bennett says.

“QVC.com,” Mr. Odenweller adds, coaching her to mention the company’s Web site.

“And if you go to QVC.com, you can find lots and lots of recipes from Rachael,” Ms. Bennett says, wrapping up.

By the end of the 12-minute segment, customers have bought about $350,000 worth of cookware. Over at QVC.com, in the 24 hours after Ms. Ray first goes on the air, shoppers have purchased 13,500 of her baking sets.

It was only several years ago that analysts and even Michael George, now the company’s chief executive, were wondering if the Internet had made QVC a relic.

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QVC has its TV operation honed down to the second. Its online and mobile pitches are works in progress.Credit...Jessica Kourkounis for The New York Times

But Mr. George said he had an epiphany of sorts after he was approached to join the company about five years ago: QVC’s strong points — direct feedback from customers, limited-time offers and live sales data — were the Internet’s strong points, too.

Over the last few years, QVC has been fine-tuning its Web site and offering mobile phone, interactive-television and iPad apps.

It has also added exclusive products from reality stars like Kim Kardashian and Rachel Zoe, along with expensive products like $5,000 high-definition televisions. Today, QVC.com, a once-negligible part of the QVC empire, accounts for about a third of QVC’s domestic revenue.

In the third quarter, QVC had revenue of $1.8 billion, up 7 percent from the same period a year earlier. That is more than two and a half times the revenue of HSN, its closest competitor. And about a third of QVC’s sales now come through the Internet rather than television.

“A few years ago, I had more of the perception that this was a television-shopping business which would be extremely vulnerable to the Internet and e-commerce,” says Douglas Anmuth, an analyst at Barclays Capital. “They’ve really caught up.”

Still, catching up is not winning. Online, QVC has hundreds of rivals, from traditional retailers like Wal-Mart and Nordstrom to start-ups like the Gilt Groupe, which offers discounts on designer items.

Yet digital retailing is a medium where the lowest prices, along with free shipping, tend to influence customer decisions. QVC rarely guarantees either. And the channel’s hybrid of talk show and pitching, which goes out to more than 98 million American homes a day, is hard to duplicate online.

“Candidly, when I first started talking about it, my instinct was, having spent my life in retail, that this is an old idea that the Internet is passing by,” says Mr. George.

“It was a bit of an unnatural act to take this company that was so successful, and you’ve got such a well-grooved process, and say, how do we make this a multimedia company?”

IN 1986, Joseph Segel, founder of the Franklin Mint, the mail-order coin company, founded QVC. He was trying to mimic the success of the Home Shopping Channel. The first broadcast showed a guy in a red blazer talking about a shower radio, and other early programs ran sweepstakes to attract viewers.

Back then, computers were cutting-edge if they could indicate whether items were in stock. Today, as Mr. Odenweller’s screens suggest, QVC is a much more data-driven business.

“We track new orders per minute in increments of six seconds; we can look backward in time and see what it was that drove that spike: ‘Ooh! Ooh! Show me the pocket of that handbag,’ ” says Doug Rose, who oversees programming and marketing. If sales-per-minute numbers are not high enough, QVC will cut a segment short.

Before going on the air, QVC’s “guests” — the products’ makers or sellers — are trained in the “backyard fence” style, which means talking about a product as they would to a neighbor.

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Maureen Kelly, left, the head of Tarte Cosmetics, talks about her make-up products on QVC.Credit...Jessica Kourkounis for The New York Times

Guests are invited back only if they sell enough; even then they are critiqued like pro athletes. “They’ll do tape reviews,” says Maureen Kelly, founder of Tarte Cosmetics, an upscale line that she has sold on QVC for five years.

QVC’s beauty executives will review a segment and suggest, for instance, that Ms. Kelly rub an eyeliner on her hand. On a good segment, she says, she sells $12,000 a minute.

THE sales may be minutely managed, but the on-the-air presentation is still purposefully folksy. There are no cue cards or teleprompters, in part because QVC is live 24 hours a day — it runs taped programming only on Christmas — and scripts would require hundreds of writers.

“They don’t want to see a bunch of polished professionals,” says Lisa Robertson, a longtime host. “They want to see the real people.”

Milinda Baker Weldon, 45, a newspaper deliverywoman in Graham, Tex., about two hours west of Dallas, says QVC is on at her house about six hours a day. Ms. Weldon, like most other QVC customers, is a repeat buyer — she started with Bare Escentuals powder, then bought Northern Nights sheets and is now a QVC shopaholic, she says.

“They’re just so down-home, so it’s like they’re right in your living room demonstrating,” Ms. Weldon says. Ninety-five percent of QVC’s revenue comes from existing customers, and QVC tries to hold on to them with easy return policies and with call centers based in the United States.

QVC, which is owned by Liberty Media, has been a television business since its founding. Liberty also owns about one-third of HSN but says that for now it is not interested in combining it with QVC, wanting to focus instead on projects like QVC’s international expansion.

When Liberty took control of QVC in 2003, it had a Web site but hadn’t made e-commerce a priority. The Internet was “a lower-cost way, compared to having a phone call to an 800 number, to execute,” says Gregory B. Maffei, Liberty’s C.E.O. “What we didn’t know at the time was how much you could grow the buy-anytime portion of the business.”

Yet even the on-the-air portion of QVC’s business seemed stale several years ago. It had brought in a handful of expensive cosmetics brands and designers making cheaper lines, but there was still a hold-your-nose perception among some shoppers.

People would confuse it with an infomercial, Mr. George says.

QVC started courting vendors like Dylan’s Candy Bar and Nars Cosmetics. More recently, people like the “Mad Men” costume designer Janie Bryant, as well as Ms. Zoe and Ms. Kardashian, have introduced thousands to QVC, often through social media like Facebook and Twitter.

“Rachel Zoe brings so many new customers it’s staggering,” Mr. George said.

When she did a New York Fashion Week show from a Manhattan studio, “the inventory kind of evaporated,” said Doug Howe, who oversees merchandising and strategic planning for the company.

For vendors like Ms. Zoe and others, QVC offers both a huge sales stream and an advertising vehicle. Ms. Kelly of Tarte says that in a typical eight-minute segment, she sells what she used to sell in a month at Bergdorf Goodman. (She says she pulled out of that store because her profits weren’t high enough.) She says a QVC spot builds sales at Tartecosmetics.com as well as at Sephora.com and at bricks-and-mortar retailers where her products are sold.

Vendors generally reap higher profits selling through QVC than through physical stores, where they help pay or train the sales force, and where store discounts can eat into their profits. QVC rarely sells at a deep discount.

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Mike George, QVC’s chief executive, has pushed the company into the digital world.Credit...Jessica Kourkounis for The New York Times

That has led to trendier and more expensive items. But some kitsch endures. “You may look and say, ‘Wow, that’s not for me,’ ” says Mr. George, who then happens to glance at the screen, where the host is holding a gift box with Santa’s face on it. A P.R. woman in the room utters an anguished sound. But Mr. George quietly explains that Christmas items remain quite popular. “If you look at our shows, you find a range,” he says.

FOR all the power of TV sales, QVC.com is now more profitable than QVC’s television operation. It needs fewer call-center workers, and while QVC must share profits with cable companies on TV orders, it doesn’t have to pay them for online orders where the products have not been featured on the air for 24 hours.

QVC.com sales rose to 31 percent of QVC’s domestic sales in the third quarter, up from 28 percent in the period a year earlier.

Mr. George says 60 percent of QVC’s new customers in the United States buy on the Internet or mobile devices. Of those, more than half are buying products that have not been shown on TV recently, or at all.

But Web shoppers may be less interested in the QVC hosts and products than the company’s television shoppers are. Online shoppers also tend to be more interested in the best price than in staying loyal to brands like QVC.

Donald Chesnut, an executive at the marketing firm SapientNitro, says QVC’s e-commerce site doesn’t offer as much interaction between hosts and shoppers as its TV programs do. Nor, he says, does it invite online shoppers to chat with one another.

“Knowing that there’s all these fans of QVC that buy and buy very often, what was totally missing as I loaded it up was any sense that I’m joining the QVC community,” says Mr. Chesnut, who worked on projects for QVC several years ago. “It feels like a generic e-commerce-related business.”

Mr. George says that first-time buyers on QVC.com might not be loyal to QVC, but that e-mail marketing could help convert them.

“We know that if you don’t make a repeat purchase in 90 days, you’re probably not going to,” he says. “We’re able to decipher, based on what product you came in on, what other items might be of interest to you.”

He also says that message boards, ratings and other social features on QVC.com do promote a sense of community and that “their usage level is very high.”

Still, analysts are quick to note that new-customer growth — as well as the revenue that follows that growth— is at a 10-year high for QVC, and they largely credit the Web site for that. “The online business is becoming such a crucial part of the business for QVC,” says Mr. Anmuth of Barclays.

For some consumers, however, nothing will ever replace shopping on television. Ms. Weldon, the Texas shopper, says she uses QVC.com to place orders, but says the Web site doesn’t compare to QVC’s TV programs.

“You know, on Sundays I might find a program on Lifetime Movie Network, but whatever I’m watching, if it’s not QVC, when the commercial comes on I’ll flip it back to QVC,” she says. “I’m just stuck on them.”

A version of this article appears in print on  , Section BU, Page 1 of the New York edition with the headline: Can QVC Translate Its Pitch Online?. Order Reprints | Today’s Paper | Subscribe

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