QVC seeks to upgrade its image, remain 'relevant' (2/4ページ)

- More competition for cautious shoppers: Rivals on every front - stores, other direct sellers and e-tailers - are scrapping for every dollar. "It's more competitive than ever," says Dan Butler, merchandising vice president at the National Retail Federation.

Archrival shopping network HSN, for instance, also just upgraded its companion Web site and is ramping up its advertising.

- More choices for TV viewers: QVC keeps its prime channel location - with about 80 percent of its programming on channels 35 or lower - by paying cable operators a percentage of net sales, as well as extra fees. But new services, such as video on demand and TV shows streamed via the Web, could dilute the value of that real estate.

In the past, the location meant channel browsers could "bump into" a product they liked on air, says Fred Siegel, who was QVC senior vice president of marketing from 1993 to 1998 and now works for a home-security company.

With video-on-demand, "they don't just surf around," he says. "They'll say, `What's on HBO on-demand that I haven't seen?' "

- Home-shopping image: QVC reaches 93 million U.S. households, but only about 10 percent have bought from the network. One snag: Many people still view TV-based home shopping as lowbrow - even though QVC sells brand-name goods, sophisticated electronics and fashions from couture designers.

As QVC put it in its September 2007 employee newsletter: "The home shopping stigma is alive and well."

Leading QVC into its future are relatively new managers: George became CEO of the Liberty Media-owned network in 2006. Chief Marketing Officer Jeff Charney also joined that year. Former Limited Brands president Meade Rudasill became chief operating officer last year. Claire Watts, former executive vice president of merchandising at Wal-Mart Stores, will become the U.S. commerce president on May 1.

Despite the challenges, QVC has in its favor fiercely loyal customers. They typically have a deep affinity for the brand, says Jeffrey Rayport, author of "Best Face Forward," a book on customer service.

QVC devotees readily call into the live segments to offer product testimonials, are up on the personal lives of their favorite program hosts and generally view the channel as entertaining. "As weird as it may sound, for people who love the network, it's good company," Rayport says.

Pretty picky in host selection

QVC works hard to build that loyalty.

It is extremely selective when choosing those chatty hosts. Last year, it screened more than 3,000 applicants and chose three. New hosts are trained for at least six months before getting their own on-air slot.