43% of QVC’s U.S. revenue now comes from the web
August 8, 2014 01:55 PM
Thanks in large part to a strong showing from its online and mobile channels, television and online retail conglomerate Liberty Interactive Corp. boosted total sales slightly in the second quarter.
Sales on QVC.com now represents 43% of all U.S. revenue for Liberty Interactive, ranked No. 6 in the Internet Retailer 2014 Top 500 Guide. And 40% of those e-commerce sales stem from mobile shoppers, the company says.
"We generated solid results, with strong gains in Europe and China and improved growth in the U.S., partially offset by macro challenges in Japan,” says QVC president and CEO Mike George. “As we reimagine the worlds of shopping, entertainment and social as one, we continue to deliver a high-quality value proposition to our customers, as evidenced by our strong e-commerce and mobile penetration and excellent customer retention."
For the period ended July 31, Liberty reported:
- Total QVC.com revenue increased 7.4% to $779 million from $725 million in the second quarter of 2013.
- In the U.S. QVC.com secured $588 million in sales, up 6.9% from $550 million. The company also operates television marketing programs and dedicated e-commerce sites in Japan, Germany, United Kingdom and Italy.
- Total QVC sales were $2.01 billion, up 2.6% from $1.96 billion. Of that, $1.35 billion stemmed from U.S. shoppers, up 3.1% from $1.31 billion in 2013. International revenue was $662 million, a 2.0% increase compared with $649 million.
- Sales from other e-commerce businesses including Backcountry.com and BodyBuilding.com was $481 million, up 9.6% from $439 million.
- Net sales for all of Liberty Interactive was $2.50 billion, a 4.2% increase compared with $2.40 billion.
- Operating income was $284 million, up 9.2% from $260 million.
- For the QVC business as a whole, the average order value was $57.05, up 1.2% from $56.39
- The merchandise return rate was 19.2%, up from 18.9% in the second quarter of 2013.
A growing focus on the company’s web business required it to increase its online marketing spend during the quarter, though company executives did not disclose details.
“Two things are happening with online marketing: One, as the digital piece of our business becomes a greater and greater percent, online marketing is growing with that in ratio, but we have also been doing some experimental outreach in new channels beyond our typical paid and search engine marketing,” Claire Watts, CEO of QVC U.S. told analysts on an earnings call this week. “So affiliate expansion, comparison shopping expansion, et cetera, et cetera. And some of those are working and some of them have not returned quite at the rate that we expected, so we continue to push it that to find the right balance.”
In late July, flower retailer FTD Companies Inc. announced plans to buy the floral and gifting businesses, including the e-commerce sites, of Provide Commerce from Liberty Interactive for $430 million in stock and cash. FTD and Liberty expect to complete the transaction by the end of 2014.
For the first six months of 2014, Liberty also reported:
- QVC.com U.S. revenue of $1.55 billion, a 7.6% increase from $1.44 billion in the first half of the prior year.
- Total QVC sales of $4.00 billion, up 1.5% from $3.94 billion.
- U.S. QVC sales of $2.66 billion, up 2.3% from $2.60 billion.
- International QVC sales of $1.34 billion, a 0.1% increase compared with $1.33 billion.