Growth at private sale sites continues
Growth at private sale sites continues
Recent data suggests that consumer enthusiasm for the flash sales industry is intensifying. ComScore's February Media Metrix, which measures online traffic, revealed an overall increase in unique visits to these sites compared with the same month last year.
"This is definitely a growing space," says Andrew Lipsman, senior director of marketing and industry analysis at comScore. "[Industry-wide] traffic has increased year-over-year and the majority of sites are showing strong growth rates."
While it's undeniable that certain sites such as HauteLook.com saw a slight decrease in unique visits, there is no concrete evidence to suggest the industry has yet to hit saturation. For direct marketers at flash sales sites, a healthy media mix can help to bolster and maintain the consumer enthusiasm evident in the comScore report.
Stacey Santo, VP of marketing at Rue La La, an invitation-only site where roughly 3.2 million members receive offers from boutique retailers, notes that the "experience" is what drives the industry.
"When we send out the daily email, it's like the curtains go up and the audience rushes in," she says. "[These emails] kick off that excitement every day." Rue La La, which saw a 161% year-over-year increase in unique visits, employs a variety of direct marketing tactics, including social media, mobile apps, a mobile commerce platform and email.
"Our marketing is more of a service, it's more than just push and pull," claims Santo. "It provides access to a unique and easy way to shop."
For Totsy, a private sales site dedicated to baby gear, social media is an integral direct marketing component. In March, the company launched a partnership with Spinback, a social media dashboard provider that allows consumers to share products and purchases via Facebook and Twitter.
Each week, Totsy also runs a Facebook-based "Mom of the Week" contest that urges women to respond to a questionnaire in order to become eligible to win prizes. Additionally, the company invests heavily in search engine marketing on Google and Yahoo.
"Everyone is looking for a smart buy," says Christophe Garnier, president and CMO of Totsy. "[Consumers enjoy] private sales sites because they present high-end products at a good price." ComScore did not have any information available on Totsy's Web traffic, but the company said in February that it has 500,000 moms in its database.
Tom Kuhr, SVP of marketing at Luxury Link Travel Group, which saw a 29% increase in year-over-year unique traffic, says the business model intrigues buyers and sellers because it provides a "small barrier to entry."
Luxury Link operates flash sales site Vacationist.com, which offers deals on luxury suites and hotels, and caters to "an upscale audience" and "tries to keep membership small." The company partners with Travel & Leisure magazine to market directly to a customer segment most likely to convert into members and sales.
Targets are contacted through email, where Kuhr claims his company sees open rates of up to 70% for some deals and 20% to 30% on average. "It doesn't take a lot of differentiation to be able to resell a product to a captive group of people," says Kuhr.
Jetsetter, a private deals site focused on luxury vacations, saw a 300% year-over-year increase in unique traffic. The site, which is part of Gilt Groupe, uses integrated marketing partnerships with companies including email magazines such as Flavorpill and UrbanDaddy, to attract metropolitan consumers with household incomes of $150,000 and greater. The company has amassed a weekly email list of more than 2 million members (daily emails are delivered to 1.5 million).
Clara Pang, acting director of marketing and head of business development at Jetsetter, summarizes the public's fascination with private sales sites accurately.
"Kayak has 440 hotels listed in NY. But who has the kind of time to go through all those?," she says. "I don't want to stay at a Marriott. I want to stay at some place cool and hip that's already been handpicked for me."