Luxury spending may be down, but that doesn’t mean fashionistas aren’t clamoring for deals. Sample sales, which have been around for years, are often a way for designers to get rid of overstocked pieces and clothes that didn’t sell well in stores — at a steep discount. Shoppers in the know can get onto mailing lists to attend boutique and warehouse sales. But now it looks as if that exclusive trend is progressively moving online, with unique visitors to online sample sale sites increasing over the past year — Gilt.com and Ruelala.com among them — according to a recent report from Compete.
Like their real-life counterparts, online sample sales have an air of exclusivity. You have to be invited by an existing member in order to get in on the deals. Membership is usually free, and these sites entice members with perks to invite as many friends as possible, a factor in the increase in unique visitors to these sites. For example, Gilt Groupe credits your account with $25 for the first purchase an invited friend makes.
The sales on premium designer clothes and accessories are announced by email ahead of time, usually by a week, driving interest and allowing members to plan and budget ahead. For example, Gilt Groupe offers several new designer sales each day, with most sales lasting 36 hours or until everything is sold. Offering womens wear, mens wear and children’s goods, the available selection isn’t revealed until the sale begins. Despite the recession, the traffic for both Rue La La and Gilt Groupe is up, with spikes during the holidays in December, revealing that “aspirational” luxury buyers (people who want luxury goods but can’t afford full price) are still searching for deals.
Many luxury brands, worried about having their cachet diluted, prohibit companies from selling their products online or at least do not sell directly through web sites. However, Gilt’s model of exclusivity and practice of buying directly from fashion houses instead of wholesalers makes the site more appealing to many well known luxury brands, such as Oscar De La Renta.
Another factor in driving more visitors to these sites is daily email alerts. The constant reminders are pretty effective, because you can never forget that there’s a sale going on, especially when the designer labels offered are emphasized in the email’s subject line.
The pleasurable feeling that customers get from a “good deal” — with the visual reinforcement of original prices dramatically slashed — may also be enough to keep traffic going. And seeing items sell out perpetuates the notion that sale items are highly coveted (even if they weren’t so popular in stores). Two West Coast members of Gilt Groupe that I interviewed (one male and one female) felt frustrated that “the good stuff’s already gone” by the time they view the site. The sales start early, 9 a.m. here in California, noon in New York).
It’ll be interesting to see how these sites fare over the next year, with U.S. competitors cropping up and competition with European bargain-luxe sites such as the leading Vente-Privee (which has over 5 million members, and a forecast of grossing over 600 million euros for 2008), Spain’s BuyVip and the successful luxury discount Italian shopping site Yoox.com.