QVC, a leading multinational ecommerce firm, wholly owned by Liberty Interactive Corporation QVCA, reported all-time high digital sales last (Thanksgiving) week, courtesy attractive deals and gift items. This underlines the growing preference among consumers to shop online rather than in traditional brick-and-mortar shops. The sales upside was primarily driven by electronic gadgets and home appliances from leading brands like Canon Inc. CAJ, Dell, KitchenAid and Susan Graver.
Shifting Dynamics
Traditional retailers recorded flat sales last week compared to 2014. With the bulk of the sales having shifted online, this was expected. According to preliminary figures from research firm ShopperTrak, sales at retail stores on Black Friday fell to $10.4 billion this year, down from $11.6 billion in 2014. On the other hand, a study by International Business Machines Corporation IBM shows that online sales were up 9.5% on Black Friday and up 14.3% on Thanksgiving Day compared to the prior year. We believe the convenience and hassle-free shopping experience enjoyed by consumers at ecommerce sites wins hands down against the chaos experienced at traditional retail stores.
QVC – Where Does It Stand?
Liberty Interactive’s QVC division is no stranger to this beneficial surge in online sales. It is the second largest e-commerce retailer in the U.S. after Amazon.com, Inc. AMZN. Growing adoption of high-end smartphones and mobile devices in the U.S. has provided a major thrust for the company that recently launched synchronized content for its mobile applications. Moreover, QVC recently partnered with Aéropostale – a leading apparel brand and signed on popular Youtube fashion star and video blogger, Bethany Mota, to launch her fashion and accessories line for teens. The partnership is expected to further drive online sales at the company.
Also, through gradual expansion of its presence in the developed markets such as Japan, Germany, Italy, and the U.K, QVC has been active on the international front as well. The company is also optimistic about its operations in China where recent data shows a sharp uptrend in online sales. We believe the company’s widespread international presence coupled with encouraging sales numbers bodes well for its growth prospects, going forward.
LibertyInteractive currently carries a Zacks Rank #3 (Hold).
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