Getting Ready for Prime Time
The open house held in late summer at the studios of QVC was--like all its regular new-product searches--a display of both American ingenuity and entrepreneurial self-delusion. Behold Liquid Wallpaper; self-watering planters; Hip-Hop: The Game; and PottieStickers, a toilet-training aid. The 1,135 people who journeyed to West Chester, Pa., to show off their wares were united in their passion for odd, one-of-a-kind products, and their inability, thus far, to break into major retail.
On the eve of the event, QVC held an orientation. From an empty studio floor, Doug Rose, vice president of brand development and self-described "evangelist for QVC," presented statistics designed to wow: QVC grossed $4.4 billion last year based on the shipment of 89,347,954 items to a customer database of 6,800,000 addresses. (In contrast, Home Shopping Network grossed $2 billion.)
Part entertainer and part salesperson, QVC does not purchase Nielsen numbers and rarely researches viewer behavior; it measures success only in terms of sales per six seconds of airtime. What it has learned since its 1986 début is that its audience likes to buy things never seen before. As a result, QVC introduces 250 new products a week. "We don't want to be a department store driven by megabrands," says Rose. "We like to position ourselves as a launchpad for new products."
Veteran inventor Bob Albertson's water-purifying coffeemaker was discovered last year at an event at the Mall of the Americas in Minnesota. Though it took more than four months to get the product on QVC--where it sold a modest 4,000 units--the appearance transformed the idea into a true business. Target and Wal-Mart, which had rejected Albertson, suddenly decided to stock his filter, and General Foods and Procter & Gamble approached him about licensing the technology. What changed? "My product has been field-tested," Albertson explains. "If it passed the QVC test, they feel more comfortable."
Big retailers go after alumni of QVC precisely because it does everything that requires investment or risk: It finds new products, introduces them to a wide audience, and most important, vouches for their quality. QVC's stamp of approval is brandished, in large part, by Eric Christopher, who came to the network in 1996 to design a quality-control system based on his experiences at Nordstrom, Braun, and the Gap. His department conducts standard drop and shake tests to simulate UPS delivery, but also puts products to work rigorously: When he had to assess snow shovels in July, Christopher found he could test them with cedar shavings instead of precipitation. And in the absence of laws about how thick the plating on vermeil jewelry must be for it to be marketed as gold-plated, Christopher conducted tests and finally declared 0.6 microns the standard. All customers know is that the nice lady on TV says the shiny jewelry is for real.
"It's an emotional product. People will be crying and dialing at the same time," says one entrepreneur from Atlanta.
In prepping the crowd at the cattle call, QVC's director of vendor relations Marilyn Montross listed what her people look for in new products: a broadcast-friendly demonstration, a compelling story, problem-solving capabilities, unique features, value, and broad appeal. Exhibitors were advised to highlight these characteristics during the 10 minutes they would have to pitch to one of 40 QVC buyers--about the same amount of time the lucky few would have on-air. "Buyers will have a right price in mind that they think of for retail," Montross said, "but if they're crazy about the product, they're going to work with you." Montross promised that some 7% of the product-search participants would be invited back for further discussion, and 3% would get closer to a purchase order--most are worth more than $20,000.
Greg DeLoia was one of the QVC team sizing up the would-be vendors. A buyer specializing in soft home products such as textiles, DeLoia typically prospects at trade shows, small stores, and factories abroad. "You can usually find a handful of items that can work out for you," says the retail veteran, who cut his teeth at Wal-Mart. "If you aren't looking, you aren't going to find."
At one table, DeLoia inspected blankets and pillows featuring a thank-you theme--one was inscribed with "The best way I can show you/The gratitude I feel/Is to cover you in Thank You's/With wishes that are real." "It's such an emotional product," gushed its designer, Elena Johnson of Atlanta. "What makes it emotional is the poem--the poem and the price point. People will be crying and dialing at the same time."
DeLoia was more enthusiastic about Trish Sharlun's colorful terry-cloth washcloths. A mother of three, Sharlun sells a series of changing pads and towels called Posh Pals through a website and in boutiques near her home in Fredericksburg, Va. She handed DeLoia a burp cloth, noting, "If that baby's going to burp, that's where you're going to catch it."
Though baby items have never sold well for QVC--the theory is that consumers are pickier when it comes to their newborns--DeLoia was intrigued. He asked Sharlun if she had trademarked the name (yes), and whether she had the capacity to handle increased demand (yes again). He was also pleased to learn that she used a variety of patterns--"Stars-and-stripes you can sell all day long because of the whole 9/11 thing," Sharlun told DeLoia--and that she introduced new fabrics often.
Still, price was a concern. "I already knew it was too high--just by listening to where she's selling and who she's sourcing from," DeLoia says. "Those hooded towels--I'd bet she's getting $20 for them [wholesale]. I want to sell it for $20 [retail]."
Sharlun later confirmed that DeLoia had estimated her wholesale price with great precision.
In the end, QVC pursued 16% of the products from the West Chester cattle call--which USA Today referred to as "the American Idol of entrepreneurs." For those who made it, the chances of landing deals with other big retailers are greatly enhanced. For the rest, the verdict of buyers like DeLoia was plain enough: Their beloved concept simply didn't have broad appeal. Trish Sharlun was among those who received a rejection letter in the mail. She called QVC to ask for an explanation and maybe a little advice. So far, she says she hasn't heard back from her contact there.