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.
