Flash sale sites

October 28, 2014

With the shuttering of Vente-Privée USA, a high-end, France-based flash sales site that partnered with American Express and its 30 million members (a sure thing, right?), what does the future hold for these types of shopping sites?   Similar sites such as Gilt, Groupon, Amazon's MyHabit, Nordstrom's HauteLook, Rue La La, have had great successes and big bumps along the way as each tries to find its way to the comsumer.

 

If you are not familiar with these types of sites, here is a little background.   Flash sales (or sometimes called deal-of-the-day sites) are an ecommerce business model in which a website offers a product for sale for a short period of time, usually a day or two. Customers register as members and receive offers and invitations by email or social networks.  Sort of the T.J. Maxx for the new generation.

 

Obviously, the model has been tweaked by various competitors.  Regardless, what these sites offer the internet-savvy consumer is big brands at big savings.  Maybe not what you were looking for exactly, but something you may like and be willing to purchase.

 

Let's start with some basic questions: would you ever buy from a flash sales site?  Have you?  Do you swear by them?

 

I'll admit that I was intrigued when Groupon arrived on the scene many moons ago. At the time, the deals were great and there were only one or two per day.  Since then, these sites have become more and more outlets for closeouts, sketchy electronics, overstocks, etc.  Deals are there to be had, but are you willing to spend the time to find them?

 

As flash sales sites have matured, they have also branched out into high-end jewelry.  This is what intrigues me most.  Would you be willing to spend $5,000 on a $9,000 ring if it was a great deal online?  I would argue no, but as these sites pop up more and more, I wonder.  As with online jewelry retailers, I was doubtful that they would succeed.  (Bluenile.com did about $400 million last year, mostly in engagement rings.)  So are they successful today? I don't know, but they are bringing in revenue which has hurt the local independent retailer.  It seems that it would be a natural progession for online jewelry sites to branch out into flash sites to move old inventory.

 

I'm not sure what the fates of these flash sales sites will be in a few years...but one or two will survive and offer some unique buying opportunities.  The question will be whether those opportunities will be for you and your buying habits, style, and taste.

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