Flash Sales Sites Still Glowing: A Look at One King's Lane, HauteLook, Rue La La, Gilt Home and The Foundary
July 19, 2012,
Bold pillows for sale on One Kings Lane.
Susan Feldman, One Kings Lane co-founder and chief merchandising officer, explained the reasoning behind the extended sale period. "Our members have told us they love the freshness of shelves changing every day, but also want a permanent online marketplace. We add new products to Vintage & Market Finds every day, which stay in the marketplace for five days or until it's sold out. Our daily sales continue to last 72 hours."
As the inventory on the site changes daily, textiles typically represent about 10% to 15% of the items offered on One Kings Lane. That includes bedding, bath towels, throws, pillows, fabrics, and curtains.
While the report by Mulpuru, the Forrester Research analyst, focuses heavily on the challenges and pitfalls of flash sale sites (chief among them is training the consumer to shop only when there is a deal), she singled out One Kings Lane with optimism. She notes that One Kings Lane is likely to "benefit from rich product assortments that can be sourced from manufacturers that are more likely to support profitable drop-ship efforts, while at the same time they avoid facing extensive competition from physical retailers like T.J.Maxx or Ross stores that can absorb large volumes of merchandise."
One Kings Lane said it was the first to start flash sales in the home category with a supply of premium, branded products sold at deep discount over a short period of time. In 2010 it expanded into vintage and one-of-a-kind products with the launch of Tastemaker Tag Sales, and in 2011 launched movie set sales, estate sales, and shopped the globe to bring finds from destinations like Belgium, Italy, India, and Morocco.
Feldman said that through the Tastemaker Tag Sale program, One Kings Lane discovered hundreds of high-quality vintage sellers who were looking for new online channels to sell their items, inspiring the launch of Vintage & Market Finds.
A luxury bedding sale on HauteLook.
Kecia Hielscher, vp of home at HauteLook, said the acquisition has been a boon to the flash sale site. "In home, [Nordstrom has] supported us in acquiring key home brands and inventory. And they're just one more reason for our members to feel confident about our brands, assortments and service."
Home is a strong business for HauteLook and one of its fastest growing categories, Hielscher said. In 2011 HauteLook saw a 104% increase over 2010 in the home category. Home textiles makes up about 25% of the home business, she said.
Hielscher noted that new sale events start each day at 8 a.m. Pacific and they last for four days on the site. The time frame works for HauteLook customers, she said. "We have found that our members like to take measurements in their spaces and envision how the products will look in their home before purchasing. They like to take time to consider their purchase, however they know that there is limited inventory available, so they do buy quickly when it's an item they really love."
Will other brick and mortar retailers follow Nordstrom's example? Mulpuru said she was not aware of anyone actively pursuing other businesses. That's "largely because retailers are risk averse and frugal, and many of these home flash sale companies think very highly of themselves with extraordinary valuations that retailers are unlikely to pay."
Some retailers may be considering getting into the space themselves. Saks and Neiman's have done it on their own for clothes, she noted, "but I've seen few executions of it because it requires a separate team and I think is viewed as a management distraction now, especially since the buzz around flash sales has died down by now."
Rue La La
Sentiments decorative pillows were recently featured on Rue La La.
Interested in joining Rue La La? New members can request a spot on the waiting list, which adds to the air of exclusivity surrounding this invitation-only private sale shopping site. In addition to fashion, accessories, footwear, home, wine, gourmet food, it has added categories like travel and local deals. Its top selling home textile brands are Frette and W Hotel.
Rue La La appears to be sticking to its original flash sale model of two-day sales. "At Rue La La our members love the excitement and urgency of shopping our 48-hour boutiques every day," said Stacey Santo, vice president of marketing communications. However, Santo noted that, "We do preview our boutiques three to five days before they go live to ensure our members never miss their favorite brands."
Santo described how Rue La La consumers function. "Members often check the brands' web sites or stores for an idea of the types of merchandise they may hope to find."
That behavior is naturally a challenge to sellers of full-price merchandise, whose stores become mere showrooms for bargain hunters wanting to try on merchandise before buying. And e-tail sites of full-price merchandise can be used for research and price-checking.
But while the concept of daily deals, half-off and other steep discounts are not actually new in retailing, what is new, as Mulpuru points out in her research for Forrester, is that the deals are heavily curated. She points out that "[e]ven smaller companies like Rue La La say that most of their 400 employees are dedicated to buying and sourcing merchandise."
As Santo explained, "We offer the best brands in the home category that we know our members will love, as well as inspire them to try new brands and products that they might not be familiar with."
Missoni Home is a top textile brand for Gilt Home.
Gilt Home launched late last year and the response has been "tremendous," said Jason Goldberger, president of Gilt Home.
"Gilt Home is one of the biggest businesses at Gilt and it's becoming increasingly important to the overall Gilt brand. Gilt Home also represents one of the biggest growth opportunities within Gilt," he said.
Bedding is one of the Gilt Home's popular categories, Goldberger said. "Home textiles are a very important part of our business and it continues to grow exponentially. Our customers have really been responding to the range of textiles sales on the site, whether it's bedding and high-thread count sheets from Frette, Missoni Home, W Hotels, towels from Sferra and Matouk, [and] cashmere throws."
Gilt Home was one of several niches added by the Gilt Groupe, joining sites for food, travel, menswear, children's clothes and local business deals.
Goldberger said: "Daily flash sales continue to be a favorite feature on Gilt Home." Longer sale formats were recently introduced.
"We currently offer a range of sales - some are three days, some are four, and some are up to a week long. The durations vary. Often when have a special sale featuring a unique brand or product range, or if it's curated by a notable designer, we extend the sale for a longer period of time to give our members a better chance and longer time to shop."
The Foundary recently created Specialty Shops, which feature a new sale each week for its members.
Private home furnishings sale site the Foundary also launched longer sales. In April, it created a section on it web site called Specialty Shops, which feature a new sale each week for its members. These sales last for 14 to 45 days, compared to the main site's typical three day events.
"These longer-lasting Shops give Foundary members adequate time to research and consider their purchases. This is especially helpful when considering higher price points," said Emily Dixon, marketing specialist for the Foundary.
The extended time frame also allows the Foundary staff to generate more editorial information and integrate it with sales - linking up product descriptions, social media and House Press, the Foundary blog.
Longer sale periods are not necessary replacing flash sales, Dixon said. "Specialty Shops appeal to members that prefer longer purchase considerations. In a sense, it is the Foundary's way of capturing a broader audience while remaining true to our original members."