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QVC’s acquisition of Zulily points to consolidation of mobile flash sales

QVC’s acquisition of ecommerce retailer Zulily points to the shopping network’s desire to ramp up its mobile offerings to millennial moms and proves that mobile-optimized flash sale sites are increasingly retreating under the umbrella of larger brands.

The curated collection site is joining the QVC with the initiative of creating a discovery-driven digital commerce conglomerate that will appeal to generations of women. Zulily currently sees approximately 56 percent of orders stem from mobile devices, suggesting that QVC will leverage this interest to maintain its mobile sales.

Zulily can offer QVC its deep experience with real-time data and analytics…real-time retail is the future and QVC clearly saw the value and promise of this exciting technology,” said Ken Morris, partner at Boston Retail Partners, Boston. “It can react in real-time and leverage its unmatched expertise in video technologies to create a truly powerful branding opportunity.

“This is truly a case where 1 + 1 = 3.”

Destination branding
Zulily and QVC are hoping to develop a singular destination brand for mobile-savvy millennials to shop at. An increasing amount of mobile-optimized flash sale sites are being acquired by large online retailers, suggesting that consumers will be swayed to spend more if a major brand has their mark stamped on a sale.

“We are big fans of the QVC business, and as we got to meet the QVC team we felt like this was an opportunity where together there is more value than each of the businesses on their own,” said Darrell Cavens, CEO of zulily, Seattle. “I believe our businesses share many of the same values as QVC and is highly complementary in nature.”

Zulily maintains more than 10,000 vendor partners to offer inventory from products including apparel, accessories, home décor, gifts and more. While QVC also has an extensive array of shoppable items, the acquisition will ensure that consumers can find potential purchases in any area.

It may also prevent customers from heading to a competitor such as Amazon, especially if QVC decides to keep up with Zulily’s flash sale strategy.

“Zulily will offer QVC a better outlet for mobile commerce as well as an expanded audience,” said Shuli Lowy, marketing director at Ping Mobile, New York. “While QVC has its own mobile apps, the company’s primary area of expertise still remains TV home shopping.

“Zulily, which is a much younger company, was built at a time when mobile was the fastest growing channel within ecommerce; the company therefore has adopted a mobile first approach.”

QVC is also likely attempting to cement its status as a mobile-friendly retailer by marketing to time-strapped young mothers who love shopping. Zulily’s 56 percent of mobile orders bodes well for QVC’s commerce model, which is beginning to rely on second-screen shopping even more.

Consumers watching its shopping channel online or on their televisions frequently interact with a tablet or mobile device while the show is running, or during commercial breaks. This provides an optimal opportunity for the brand to send a push notification or call-to-action to cement the potential purchase.

Last October, QVC leveraged Apple’s fingerprint sensor Touch ID technology to allow for streamlined user log-in to its mobile application and faster payment methods (see story).

Wearables are also on the horizon for the online commerce platform, as QVC recently revealed that it expects big things from the Apple Watch for retailers, both as an engagement tool and as a point of sale (see story).

Cross-marketing possibilities
The acquisition will enable both brands to broaden their product lineup and vendor network, but also allow for additional cross-marketing opportunities. QVC will receive access to zulily’s platforms with proprietary brands, giving it the ability to market to that audience and rope them in to its larger ecommerce offerings.

Their combined customer base clocks in at 19 million members, meaning the companies will be able to send out a plethora of mobile-optimized emails alerting customers of daily deals. Zulily also provides more personalization tools on the mobile side, which QVC can leverage to ensure its customers feel as though content is customized for their likes and preferences.

QVC is also planning to tap zulily’s real-time and historical data that personalized deals for customers each day and drives further engagement. Conversely, zulily will use QVC’s video expertise to bolster the shopping experience.

The combined scale and abilities of both brands will likely augment their power in the competitive mobile commerce sector, suggesting that other daily deal sites may be well-suited to team up with larger conglomerates for more features to leverage and a greater audience to reach.

“The hope is that the merge will allow QVC to better monetize its products via mobile,” Ms. Lowy said. “The step alludes to QVC’s belief that mobile commerce will be a key contributor to its organization.

“The merge also aims to have the two brands cross-sell to each other’s customers, which they say has relatively little overlap. QVC’s audience skews to a slightly older demographic between the 35 and 55 age bracket, while zulily’s audience is younger, between the 25 and 45 age bracket.”

Final Take
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York