The competitive landscape for the flash sale concept is getting more crowded every day.
Paris-based Vente-Privée.com, the largest flash sale company in the world, is expected on Thursday to unveil a partnership with a U.S.-based firm, likely serving as its entrée into the American market. Officials at Vente- Privée declined to provide details, but Jacques-Antoine Granjon, the site’s chief executive officer and co-founder, will be in New York Thursday for the unveiling of its U.S. partner, according to U.S. and overseas sources. Summit Partners, which has offices in Boston, Palo Alto, Calif., and London, has held a 20 percent stake in Vente-Privée since 2007.
Market sources have indicated that Vente-Privée’s U.S. partner could be American Express. Officials at American Express could not be reached for comment by press time. But the financial and credit card giant is scheduled to make an announcement on Thursday afternoon that it said is expected to “impact the fashion industry.”
Several speakers are set to partake in the American Express announcement, which is expected at around 1:30 p.m. at Eleven Madison Park Restaurant in Manhattan, but the name of only one has been released. That individual is Dan Schulman, president of Enterprise Growth Group at American Express. His responsibilities include strategies to expand alternative mobile and online payment services, and form new partnerships geared toward expanding and building new revenue streams for the financial firm.
The flash sale sites are so popular among consumers that $34 billion online giant Amazon.com last week launched its members-only Web site Myhabit.com. In February, Nordstrom bought HauteLook for $270 million. And venture capitalists are still making investments in the sector. Gilt Groupe on Monday said it raised $138 million in new funding, raising its valuation to $1 billion. Last month, ideeli Inc. said it completed its Series C financing round of $40 million, led by Next World Capital.
Kevin Ryan, Gilt’s founder and ceo, said Monday he expects more consolidation in the space in the next 12 months. Gilt is expanding rapidly, with plans to launch full-priced men’s and food sites this year.
“Our online male sales are three to four times bigger than Saks and five times bigger than Bloomingdale’s,” Ryan said.
As for the growing competition, Ryan doesn’t seem worried: “The large companies like ourselves have a lot of revenues and a lot of traffic, and it’s going to be hard for the smaller companies to compete.”
Meanwhile, Adam Bernhard, ceo of HauteLook, also is just fine with the competition.
“I think the competition is great. It continues to show that the consumer has chosen to shop this way. Retailers are looking at this as a space that’s here to stay, and the brand community sees this as a legitimate brand distribution channel that it has to pay attention to on a regular basis,” he said.
Bernhard said the top three online sites, which include HauteLook, do in excess of $1 billion in annual sales. He sees mobile innovation as the next driver for the space. The firm is launching its iPad app in the next 90 days so it can “go wherever the consumer is.”
Bernhard also disclosed that his firm is in regular discussions with credit card companies, which he said are starting to recognize the “power of the space.” He declined to elaborate on whether some arrangement with credit card firms might be in the works. Flash sale sites, interchangeable with the term private sales, meet the thrill-of-the-hunt need of consumers shopping online, where members-only shoppers have a limited time to make that deal. Some sites buy inventory, while others do not hold any inventory. Both business models do include curation to better target a particular customer. As consumer buying habits shift online, a variation of the concept is the daily deal site, such as Groupon and LivingSocial, which focus on local service deals.
Apar Kothari, founder and ceo of MyNines Inc., a sample sale-flash site aggregator, said, “There are three types of flash sale shopper: They are either looking for the best deal-value, a specific item or an opportunistic buyer looking for newly listed items.”
According to Tom Bernthal, ceo of Kelton Research, “Flash sales are not a passing fad. It’s here to stay. Consumers have voted with their dollars. They like this way of shopping and [the concept] is working.”
Bernthal pointed to Amazon and Zappos as disruptive innovators that have transformed shopping online. He also believes consumers have adopted the flash sale concept due to the idea of gamification.
“We’ve been watching for several years how companies are taking consumer behavior and adding elements of game play to make it more fun, enjoyable, sticky and a better shopping experience,” Bernthal said.
He noted that flash sales are the “ultimate example of gamification,” since they pull in consumers and change the way they shop.
Still, there’s debate on how the sites will evolve, mostly in reaction to inventory issues.
Stephen Wyss, partner in the retail and consumer product practice at BDO USA, said, “Flash sales provide a tremendous opportunity as a distribution channel, and the competition is starting to get hot. It started with a few players and now even eBay is considering development of its own flash model site.”
Ironically, eBay’s $2.4 billion deal for fulfillment service provider GSI Commerce in March did not include Rue La La, one of the top three flash sale sites in the U.S. Instead, Rue La La will be part of a holding company under the leadership of GSI founder and ceo Michael Rubin in which eBay will hold a 30 percent minority interest.
Wyss said, “At some point, as the potential for access to excess inventory diminishes, flash sales could evolve to full-price or near full-price flash sales, moving the concept to a full-price model.…In addition, they can create items just for the site, or test product on the site.”
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)