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QVC-HSN Merger Puts Amazon, Walmart on Notice

12 Jul, 2017 By: Doug McPherson


WEST CHESTER, Pa. – Reaction to last week’s announcement of a QVC-HSN merger has been quick and varied but many insiders agree that the new company could easily serve as a thorn in the sides of Amazon and Walmart.

The combined company will be No. 1 in global video commerce with $14 billion in revenue. It will reach more than 360 million homes via 17 broadcast networks, and it will broadcast more than 145 hours of live content per day, the companies said in a presentation to shareholders just after the merger was announced.

That will also make it the No. 3 company – behind only Amazon and Walmart – in e-commerce and mobile commerce, with $7.5 billion in online sales and $4.7 billion in mobile commerce revenue.

QVC and HSN, however, remain separate brands producing a total of more than 55,000 hours of shoppable video content per year.

AJ Khubani, founder/CEO of TELEBrands and founder of BulbHead.com, calls the merger is a “win” for multiple industries. “The news … just sent ripples throughout the direct response and e-commerce space – ripples that are especially being felt by Amazon and Walmart as a finalized merger would position QVC/HSN as the third largest e-commerce company in North America. This is exactly the type of all-in move the industry needs [and] … with a merger of this scale, you should expect to see groundbreaking innovation across television-enabled commerce and entirely novel shopping experiences to capture the modern consumer.”

Daphne Howland, a reporter with RetailDive, says the merger is an opportunity to “create synergies and combine forces to push into e-commerce (including mobile) in a significant way.”

She adds that there was very little that was surprising about the merger. “Once fierce rivals, QVC and HSN have good reasons to join forces. For one thing, QVC-owner Liberty Interactive already owned 38.2 percent of HSNi,” she writes. “Plus, interactive broadcast retail has already shifted in a major way from television sets to the web. With that, and an aging consumer base, the time was ripe for the two to come together and plot a course to grow online sales, particularly on mobile.”

She agrees the new company could have far-reaching consequences for Amazon and Walmart, which increasingly rely on their marketplaces – and third-party sellers – for sales. Half of the merchandise sold on Amazon comes from its marketplace, and Walmart’s own fast-growing marketplace contributed to an e-commerce sales spike of 63 percent – and an attendant 69-percent digital gross merchandise volume increase – in its most recent quarter.

Stefany Zaroban, Internet Retailer's director of research, says the TV retailers “tend to each have their own very loyal customer base, and I would guess that the two companies will work harder than ever to keep those customers from moving to Amazon. As consumers continue to shift more of their spending to the web, much of that is going to Amazon. So we think there will be lots more deals like this, as well as store closures and bankruptcies."

Other analysts say the result could eventually mean even better deals for customers of the video and online shopping destinations, which include five channels shown on TV and online (QVC, QVC2, BeautyiQ, HSN, and HSN2.

"We have a very sophisticated customer who has a lot of choices about where she spends her money," said QVC President and CEO Mike George, who will oversee both networks when the deal closes, which is expected to be later this year. "Every opportunity we have to make the business more efficient, we definitely see being able to pass those (savings) back to the customer as a real important value of the combination."

"The increased scale of this combination will allow us to more effectively competitive, we think, in a changing and evolving retail and digital environment," said Liberty Interactive President and CEO Greg Maffei on a conference call discussing the deal.

One of HSN’s most popular entrepreneurs, Rhonda Shear, who developed the Ahh Bra, called the merger “amazing” in an interview with an NBC-TV news affiliate.

“I think it’s really exciting,” Shear said. “I think you’re going to see two amazing companies that have already been amazing on their own merge into one company. I think instead of being afraid of it, I think it’s the perfect timing for what’s going on in retail.”

She adds the merger could potentially take HSN to a whole new level. “QVC is a global company so the opportunities of HSN becoming global is really exciting,” she said.


About the Author: Doug McPherson


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