Thanks to a surge of consumers looking for deals in the recessionary economy, private online sample sales, which offer highly discounted merchandise from luxury retailers looking to unload excess inventory, is becoming a fast-growing business. BuyVIP, a European private online shopping club with more than 3.5 million members, just secured $14.9 million in Series A funding from Kennet Partners, Bertelsmann Digital Media Investments, 3i Group and Molins Capital. BuyVIP’s American counterparts, Ideeli and Gilt Groupe have also been able to latch on to this expanding market where big-name designers like Calvin Klein, Zac Posen and Givenchy sell last season’s clothes, jewelry and handbags to shoppers at significant markdowns.
Now, private shopping club One Kings Lane is trying to be the online sample sale for affordable designer home wares and furnishings. The first 100 TechCrunch readers who sign up here will get a $25 credit towards any purchase.
Like Ideeli and Gilt Groupe, One Kings Lane is an exclusive invitation-only shopping destination, featuring high-end designer home goods at prices that are discounted by as much as 70% (everything on the site is at least 40-50% off retail price). One Kings Lane offers its sample sales during a 72-hour window, alerting members of sales via daily emails. The online site buys the excess merchandise directly from the designers, and then marks items up to make a profit. One Kings Lane cuts costs by outsourcing its e-commerce operations to e-business provider Auspient Inc.
One Kings Lane co-founders Alison Gelb Pincus and Susan Feldman say that invitation-only online “shopping clubs” are incredibly attractive to high-end designers because the exclusivity of the clubs doesn’t diminish the image of the luxury brands. Sites like Overstock.com or retailers like TJMaxx also offer discounted, excess merchandise but don’t have the luxury connotation attached to their names. Pincus adds that retailers are still able to take advantage of the potential buying power of shoppers across the Internet but not at the expense of tarnishing the brand.
One Kings Lane appears to be growing at a rapid pace in its first week of business. Already the site has tens of thousands of members. Pincus and Feldman say that because of the recessionary economy, consumers are trolling the internet for deals and they hope to make their site an easy way to find high-end home goods at discount prices. The sales are pretty good. Popular high-end Archipelago candles were discounted by over 50%, for instance, while they are being sold for full price on Nordstrom.com. Competitor Bluefly.com, which is an open site that also sells marked down luxury goods, has a wide variety of deals on home goods and will likely be a formidable opponent to One Kings Lane. Bluefly also has high-end, designer merchandise, including flatware from Vera Wang and Hermes, and shoppers aren’t restricted to a 72-hour window to buy goods. At the moment, One Kings Lane has a handful of designers featured and will definitely need to grow its roster of brands to create a loyal user base. BuyVIP currently features over 400 different brands. And part of BuyVIP’s new capital will be used to expand to new geographies, and a US expansion could grow the site’s 3.5 million user base even further.
I want to try
$10 says that Leena knows the people behind One Kings Lane
I’d like an invite.
And your signup link doesn’t work.
Why not just use Microsoft’s Live Cashback (aka JellyFish)? They offer pass on the commission they get from the merchant to you?
Where’s my $25!?
I’d also like an invite, but yeah, the link isn’t working
tried the link .. doesn’t take you to the coupon .. but I would surely like one
I was able to sign up using Techcrunch in the invitation line, but it didn’t say anything about the $25.
Use http://www.onek....com/techcrunch
From a consumer perspective, these types of businesses are great – especially during these tough economic times. From a business model perspective though, those companies that are mostly/solely buying inventory from the manufacturers and carrying that risk will have an uphill battle compared to those that are taking the drop ship approach. Plus, without exclusive relationships with brands it will be challenging for these sites to differentiate their offering.
I tend to agree. This is great service to buyers (especially women who like luxury products). It’s hard to get an exclusive deal with top brands and make this biz model sustainable. As a private shopping club, it will make money for sure. I’m not sure how it will scale and sustain.
It worked for me! I added something to my cart and it shows the discount.
I have to say though, this seems more like affiliate marketing than exclusive stores. Each member you “invite” that goes on to make a purchase earns you $25. Sounds like blog fodder…
(To be clear, I do not think TC is posting for any gain, and in this case we are getting the affiliate bonus, or at least, I did)
I tried it and I did not get the $25 off, so not at all clear if it’s working. If it is I hope they reply in the thread here.
Magento, our enterprise open source eCommerce platform, will natively support private sales in the enterprise edition (availability announced mid-April). This will bring private sales via our multi-store-retailing functionality to online merchants at a very low, competative price point.
I expect proliferation of private sale sites as a result – its a great model and the companies mentioned in the article have been highly successful. Congrats!
They forgot to mention other popular online sample sale sites, like TheTopSecret.com and Ruelala.com
And even others like Hautelook and Vente Privee
WARNING – I wanted to share with some of my contacts from my Gmail contact list. Generally when sites offer this option, they let you then select which contacts to send it to.
Instead – the next screen I got was “Thank you! Your invites have been sent!”. WHAT???
I think an invitation was just sent to everyone in my gmail contact list… over 700 people!!
This is a major concern. Did anyone else experience this?
Be warned!!!
OK – I freaked out too soon. Looks like it was only sent to those email addys that I typed in. It didn’t link to my gmail at all.
Sorry for the freak out! Ignore!
Please send me an invite
I didn’t get the $25 either. Is it broken?
Coupon code & active promotion & everything for Shopping
http://shopping...s.blogspot.com/
new business model similar (online private sales) but different (+public outlet sales and + real store at 57 Greene street in Soho, NY + monthly cocktail for members) at the same time….www.milanluxury.com
Looking for programming help, brands with products in home-related categories, investors….and luxury shoppers!!!
Gilt Groupe Invitation:
http://www.gilt...ite/xxjoeyg89xx
Ruelala Invitation:
http://www.ruel...invite/jgomez02
I agree with Chris Petrovic. As Magento releases its private sale platform, more of these companies will be duking it out for the same inventory. Prices will rise. Selection will get worse. And as the economy improves supply will shrink. Quality will lessen. Some consumers won’t care…they will buy any piece of garbage just because it appears to be discounted. But the general bigger consumer trend, accelerated by a down economy, is to actually buy more thoughtfully and carefully. This will keep lots of people from buying on price alone.
Nice to hear about these shopping deals. Here you can get better shopping service from Nethaggler.com
NetHaggler recently launched an innovative shopping service using consumer-friendly shopping concepts and a browser applet. Using the concept of Tag, Nag and Haggle, consumers can monitor for price drops, bargain for discounts, and join up for volume discounts.
To get started with the exciting new innovation, shoppers have to install a simple and secure bookmarklet on their browser.
NetHaggler supports several popular online merchants and will be adding more.
To learn more visit http://www.nethaggler.com.
another list of shopping clubs. some international ones too…
http://exciting...s.blogspot.com/