QVC CEO Michael George took the stage at the Goldman Sachs 22nd Annual Global Retailing Conference in New York this week to spread a little Zulily love, less than a month after his company bought the Seattle-based e-commerce company for $2.4 billion.
Zulily had a few earnings misses and saw its stock tank before it was scooped up in the bittersweet acquisition. But if you ask George, there’s plenty to be excited about.
Even Zulily’s relatively slow shipping times, one of the company’s biggest criticisms, is kind of a badge of honor in George’s book.
He said the long shipping times are “fundamental to the business model” because Zulily focuses on boutique-style goods that come from smaller shops spread all over the place. That means products aren’t warehoused in one place where they can be sent out in a hurry, like Amazon does.
“And so the value proposition to the customer is we’ll give you great, unique, differentiated products at a great value, but you have to wait a couple of weeks to get it,” George said at the conference on Wednesday. “And so far, that’s been a value proposition that has helped them get to be one of the fastest-growing e-commerce players in history.”
Sure, he said, Zulily is working on ways to improve speeds, both by working more efficiently with retailers whose goods the site sells, and experimenting with some warehousing options. Eventually, he said, there will be a mix of ready-to-ship options and Zulily’s traditional model. But he doesn’t seem to be in much of a hurry to fix the issue.
“What I admire about the Zulily team is they were willing to go against conventional wisdom,” George said. “Conventional wisdom is: the only thing that matters in e-commerce today is free shipping and overnight shipping. And we’ve never believed that at QVC.”
He said Amazon can have the customers who are ordering something for a birthday party they forgot about tomorrow. That’s just not QVC’s or Zulily’s target audience.
“Fortunately, there’s a lot of business to be done in retailing, and it’s all about inspiring the customers at the end of the day and making her comfortable with the trade-offs that she’s getting,” he added.
George also spent time on stage tossing out a few interesting stats and making a case for why Liberty Interactive’s QVC Group, a brand known for selling knickknacks on television, will blend so well with a pioneer in e-commerce.
Not only do both companies break the Amazon mold, but they complement each other in ways that will help both businesses grow, he said.
QVC has 40 million customers between the ages of 35 and 70, according to George. Zulily, meanwhile, has about 5 million customers between the ages of 20 and 45, without much overlap. Just about 6 percent of Zulily shoppers have used QVC before.
That opens an opportunity for QVC to reach a new generation of shoppers through Zulily. The company plans to keep the brands separate, but it hopes to make the “zulily small boutiquey brands a feeder system to QVC, leveraging the power of our two platforms.”
“All the things they know in digital, all the things we know in TV, we think there’s a lot of upside,” George said.