Limited Supply And Great Prices On The Hush Hush

I’m intrigued by this Wall Street Journal report that online fashion retailers are turning to “private sales” to boost revenue.

The companies, including Gilt Groupe, RueLaLa and HauteLook, have built a following with virally marketed, daily “members only” sales of limited merchandise. Short, intense sales — often just 36 hours — along with constant updates on which items are out of stock create a sense of urgency and excitement to buy.
Membership is free and generally requires little more than a name and email address. The sites gather members largely by word of mouth, limiting their audiences. Gilt now has 1.2 million members.

According to the Journal, the private-sale business avoids two common pitfalls of online commerce: low margins due to inventory costs and spending on online ads.
From a marketing perspective, the “private sales” also bring the ever important exclusivity factor to the fore. Think about an estate sale in your neighborhood that’s only advertised by a few cardboard signs, or better yet not at all. When you enter such a sale, you are eager to buy before someone else spots the desired treasure. By creating that atmosphere in an online sale, these fashion retailers are scoring big.

About David Burn

Co-founder and editor of AdPulp. I wrote my first ad for a political candidate when I was 17 years old. She won her race and I felt the seductive power of advertising for the first time. I worked for seven agencies in five states before launching my own practice in 2009. Today, I am head of brand strategy and creative at Bonehook in Portland, Oregon.