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Flash sales


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  • Open question up to class
  • Class question: Does anyone know any examples of flash sale websites? These are some, but not nearly all Has anyone used flash sale websites before? Which website(s)? Why do you buy the deals? Do you really need the product? Do you buy it for a practical purpose or just because you can’t resist the deal? Addiction?
  • focused on luxury apparel and accessories Vente Privee grew fast and profitably in Europe and that spawned similar businesses in the United States Now there is less luxury inventory and flash sales sites are bigger. That has forced these companies to pay more or find other ways to get their products. Average deals have dropped from 70% off to about 50% They have increased in popularity but that has caused the effectiveness to drop because there is no longer a surplus of brand named stock so flash sales have turned to lesser known brands and reduced savings.
  • by Doubleclick co-founder Kevin P. Ryan, early eBay executive Alexis Maybank and Louis Vuitton and Bulgari merchandising executive Alexandra Wilkis Wilson
  • Products: Groupon has restaurants, retailers, spas, hotels, dental services, online services, sports clubs, etc vs. Gilt has mainly clothing brands, expanding with “Jetsetter” to vacations, with “Taste” to food, with “City” to high end restaurants, retailers, etc Different gilt sites:,, Language: Groupon “we sell stuff we want to buy.” “no BS.” “no ‘gotchas’” vs Gilt language is more formal
  • Gilt exclusivity is false…just for feeling of New York exclusive invitation-only sample sales
  • Ask a group to volunteer to choose preferences for the new customers.
  • By offering deals on sites like Groupon and living social local businesses can grow their customer base Many consumers purchase something they wouldn’t usually because of a deal on a flash sale website This is a great tool for restaurants and coffee shops Allows businesses to sell unsold merchandise This ranges from apparel to hotel rooms and much more Helps the company by promotion through word of mouth Flash Sales have become an industry in themselves
  • Ebay, Neiman Marcus and Saks Fifth avenue have added flash sale components to their websites to sell unsold merch Recent articles have The GiltGroup nearing a $1 billion evaluation, Hautelook sold to Nordstrom earlier this year for $270 million.
  • Transcript

    • 1. John DiLoreto Kaitlyn Dormer Mathew Gravesande Nick Jerome
    • 2.
      • Highly discounted, limited time sale offer
        • e.g. 50% off dinner at Wingers if you buy coupon in the next 24 hours
      • Easy method to sell off surplus stock
      • System has been named a win-win for both retailers and consumers
      • Sometimes based on collective buying power
    • 3.  
    • 4.
      • The model was started by Vente Privee in France a decade ago.
      • Grew rapidly during the recession as a way to sell off excess stock.
      • Gilt, which started in 2007, is the largest flash sales business in the United States, followed by Rue La La, HauteLook and Ideeli
    • 5.
      • launched Nov 2008
      • 7,000 employees across HQ in Chicago, office in Palo Alto, local markets in North American, and regional offices in Europe, Latin America, Asia
      • “ we sell stuff we want to buy”
      • ” No BS” - no buried conditions
    • 6.
      • Launched in 2007
      • launched women's clothing and accessories in November 2007, men's in April 2008, Gilt Groupe Japan in February 2009, Gilt Fuse in August 2009, a travel site named Jetsetter in September 2009, Gilt City in April 2010 and Gilt Home in May 2010
      • First come, first served basis
    • 7.
      • Local retailers/restaurants
      • Either online or in store
      • Variety of products
      • Friendly, relaxed website – language
      • Little categorization
      • Emphasis on the discount
      • Major luxury brands
      • Exclusively online
      • Mostly apparel
      • High-class insider-only access
      • Different sites
      • Emphasis on the prestige of the product/brand
    • 8.
      • “ Customers” – open to everyone
      • Daily deals – based on impulse purchasing
      • Collective buying
      • “ Addiction”
      • Personalized profiles - deals for you
      • “ Members” – seems more exclusive
      • Advance preview – know the brand before sale
      • Exclusivity – only I get this
      • “ See what inspires you”
      • Similar to regular online shopping
    • 9.  
    • 10.
      • Cheap deals (50-70% off, sometimes even more)
      • Get designer brands at reasonable prices
      • Find new stores, restaurants, brands
      • Excitement
    • 11.
      • Addicting - associated with the ‘thrill’ of it; like lottery tickets or gambling
      • Impulse purchases - time limit forces consumers to make quick decisions without spending much time to think/consider; results in adrenaline rush
      • Information overload - spam
      • 52% of respondents feel “overwhelmed by the number of bargain-boasting emails they receive on a daily basis”
    • 12.
      • Grow customer base
        • Great for restaurants and coffee shops
      • Consumers purchase something they usually wouldn’t
      • Sell unsold merchandise
        • Apparel, hotel rooms, and much more
      • Promotion through word of mouth
      • Flash Sales - industry in itself
    • 13.
      • Key Idea: Attraction to the firm
        • Builds brand recognition & loyalty
        • Drawing attention for new firms
        • Attracting new demographics to old firms - Saks Fifth
      • Results in:
        • Selling surplus
        • Grow revenue
        • Increasing store traffic
        • Perception of scarcity
    • 14.
      • May feel forced to slash prices too dramatically in order to keep up with the competition
      • If not involved, can easily loose out sales to competitors
    • 15.
      • Flash sales as division of company
        • Ebay, Neiman Marcus & Saks – already have own flash sale components to sell unsold merchandise
        • Hautelook sold to Nordstrom earlier this year for $270 million.
        • The GiltGroup nearing a $1 billion evaluation
      • Mobile applications
      • Deals based on GPS location on mobile device
        • Also on personal info on device (searches, texts, etc)
      • More/better aggregate platforms like Yipit
    • 16.
      • Flash sales are on the rise
      • New platforms modify/improve upon previous sites
      • Growth for new/small businesses
      • Big impact on business
      • Questions?
    • 17.
    • 18.