Home-shopping giant QVC is making a play to grab a bigger share of the booming beauty business: It is launching a separate TV network dedicated solely to cosmetics, fragrances and skincare.
The channel, to be called Beauty iQ, is set to arrive in 40 million U.S. homes in November on providers such as DirecTV and Dish. It will feature live programming five nights a week, with the rest of its schedule rounded out by recorded beauty-centric segments.
QVC’s foray into more television programming comes at a time of deep uncertainty in the media industry, as legions of customers are abandoning cable subscriptions in favor of streaming services such as Netflix and Hulu. The rollout of Beauty iQ, then, effectively amounts to a contrarian bet that there’s still a reasonably bright future for live television viewing.
Mike George, the chief executive of QVC, said there were several reasons why the company chose to make an investment in its beauty business. For one, it is a line of products that appeals to a broad range of age groups, crucial for a company that is working to lure a younger audience.
And, as QVC has moved from mass-market beauty items to more luxury offerings, “It’s probably been one of our fastest-growing businesses over the last 10 years or so,” George said in an interview.
The momentum that QVC is seeing in beauty is part of a broader wave of sales momentum throughout the industry. Market research firm NPD has found that sales of pricey, so-called “prestige” beauty items were up 7 percent last year, and there is ample evidence that the category is still going strong. Ulta saw sales soar 14.4 percent last quarter online and at its stores open more than a year. Sephora, meanwhile, delivered double-digit revenue growth in the most recent quarter. JCPenney, Macy’s and even Anthropologie are investing more heavily in their beauty divisions because they see such a big opportunity there for profitable sales growth.
QVC is already pulling down big bucks in beauty. The company said such items accounted for 17 percent of its total sales last year. And so there is some risk that Beauty iQ will simply cannibalize QVC’s existing business rather than steal share from other sellers.
George says he feels confident that Beauty iQ’s business will be largely additive; QVC, he reasons, can only show so many hours of beauty products each day, as it also caters to people shopping for electronics, fashion, home goods and other items.
It’s clear that QVC has big ambitions for Beauty iQ in the traditional television environment: George says the company is willing to invest in more hours of live programming if the early offerings meet expectations. And the company is in active talks to get the channel on more distributors’ slates of programming so they can reach more households.
“We think we can continue to expand the base of people who view us on broadcast,” George said, noting that QVC viewership has increased in each of the last three years.
But Beauty iQ is also meant to take the company further down a path of digital experimentation. All of the programming will be available to watch live within QVC’s app and much of it will be simulcast on Facebook Live. The company also plans to use Facebook Live and YouTube as key tools for disseminating additional video content, such as tips and tutorials for how to use a certain product.
While QVC’s bet on television might seem old-school, its muscle in the digital arena should not be underestimated. The company has emerged as something of an unlikely titan of small-screen shopping, with a mobile sales haul that is among the biggest in the retail industry. QVC was early to acknowledge the “second screen” phenomenon, in which people watch TV while swiping and tapping on a tablet or smartphone, and it tailored its app to that behavior. If it can manage to be similarly prescient with how it harnesses the power of Facebook Live and YouTube, it could turn Beauty iQ into a powerful digital property.
(c) 2016, The Washington Post ยท Sarah Halzack
