As stories and jokes about failed dot-coms proliferate, it begins to seem that they are all here today, gone tomorrow. But e-commerce and multi-channel integration are not really new, as Stephen Hamlin, vice president of iQVC, points out. QVC, iQVC’s parent company, began operations as a broadcast-based direct marketer over a decade ago, and when iQVC was set up on the Internet in 1995, the two operations were completely integrated from the beginning — order processing, customer service and record files, shipping and handling — with pricing consistent across channels. It’s just that in 1996, no one had invented the terms “e-commerce” and “multi-channel integration” yet.
“We’ve been an e-commerce company for 14 years,” says Hamlin, “shipping directly to the home, so all the computer really was for us was another way to sell product. We never viewed it as a different business.” Initially, there was some speculation within the company that iQVC might cannibalize the older channel, but those fears quickly disappeared. In fact, customers buying through both channels are worth 25% more to the company on an annual basis. The combined operations posted $3.2 billion in sales in 2000.
Integrating the two operations was simplified by the infrastructure QVC already had in place. An in-house IT team designs most of the systems iQVC uses, although the group does work with such providers of Web-based order management services as CommerceHub of Clifton, NJ.
CommerceHub’s hosted infrastructure allows iQVC to communicate efficiently via a Web interface with its extensive “virtual warehousing” network of suppliers who drop-ship orders directly to customers. An average of 17% of iQVC orders goes through the virtual warehouse system. According to Frank Poore, president and CEO of CommerceHub, “Virtual inventory is the most complex customer service model.”
There has never been any doubt at iQVC about the importance of its customer base. Director of operations Carol Steinberg explains that iQVC has always known a lot about its customers: “From the first day we started doing business on air, we have all that information available.” CSRs for both QVC and iQVC come from the same pool, although online reps are required to have slightly different skills. “It’s one voice, one message,” says Hamlin. “We really try to keep it seamless.”
The historical depth of the operation has been an asset, according to Hamlin. “Even before the Internet came along, since we were so dependent on computers to gather information and handle it through telemarketing, we really got a leg up, even before we sold product, in designing our Internet architecture.”