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About Those Flash Sale Sites – A Bit of Background & Some Deals That Aren’t Deals at All

Hello, and happy summer wishes to everyone.

We are back with a two-part report on those bargain-promising flash sale sites, with an eye toward boosting your purchasing power, especially for Kate-inspired items. Today we have a backgrounder on the sites for those who might not be familiar with them, and a spot of comparison shopping. Friday we’ll cover the bargains (or not) from Kate-related brands.

HOW IT ALL BEGAN: When the US economy went south in 2007 most consumers simply didn’t have disposable income to spend on things like clothes, shoes and handbags. The fortunate few who did have money to spend were thinking twice about the possibility of being perceived as flaunting their good fortune when so many others were suffering. U.S. retailers were confronted with falling sales and rising amounts of merchandise sitting in stores across the country. As the recession spread so did the retail malaise; stores in other countries discovered they were facing the same dilemma. In many cases retailers weren’t able to move the merchandise at almost any price. For many there were also issues with vendor agreements, promises stores often make that they won’t discount merchandise below a certain amount to avoid cheapening a brand. The following is from a May, 2014 article in the Business of Fashion:

Back in 2007, with the Great Recession looming, fashion brands were desperate to liquidate large quantities of excess inventory…

Thus the advent of flash sale sites: the sites scooped up the excess merchandise and sold it online, providing at least some income for retailers, while also offering bargain prices for shoppers. Sites required one ‘join’ and become a ‘member’ of their ‘private club,’ proclaiming the many benefits available to ‘members.’ For most sites ‘membership’ in the ‘private club’ was not as exclusive as portrayed; one simply needed to have an email address and be breathing in and out. Early on a very few actually did restrict the number of members, creating wait lists until new members could join. I know of no such practice in use today. The sites also came up with an ingenious method to spur membership: offering site credits to those referring new members, payable when the new member’s first order was shipped. At many sites the credit is $15, although some pay only $10, while others credit accounts $25 per referral.

HOW IT WORKS: Every day a member receives a listing of the ‘events’ (aka sales) starting that day. (Most allow you to set how many emails you want, from a weekly summary to multiple notifications daily.) Different sites have different starting times for sales: for example, at Rue La La the primary sales begin at 11amET; at Beyond the Rack sales start at 9amET and 5pmET. The duration of most sale events runs from 48 – 72 hours.  Almost all of the sites offer apps for mobile devices, making it easier to shop their sales regardless of one’s location.

Initially this all proved a good business model, but as the economy started to rebound and online shopping changed, so did the flash sales business.  There has been a significant amount of churn the past several years, with some players leaving the genre completely, and others being gobbled up by larger sites. For some companies, a reliance on flash sales hasn’t proven a good strategy. Kate Spade is one brand pulling back on the number of sales it does; more from Women’s Wear Daily:

Kate Spade… is working on… a pullback on flash sales on its site. It’s also elected to no longer participate in friends-and-family sales.

Coach is doing the same; from QZ.com:

But Coach has an uphill climb ahead. It is trying to convince the high-end fashion crowd that it’s cool and relevant, even though its handbags haven’t changed that much. Meanwhile, people have become used to buying those bags at a discount.

Coach is trying to address the problem. It has cut way back on promotions, reducing flash sales from three each week to just two per month. But that strategy has started to hurt.

As the landscape has changed some sites are pursuing other strategies to remain profitable. Trade publication Retail Dive shares Gilt’s plan.

The retailer recently announced it is diversifying beyond the traditional online flash sale model, testing a personal closet service where customers speak with one of the company’s stylists before shopping at a physical showroom at the company’s headquarters.

There’s also more competition than ever, especially from off-price/factory outlet malls, with luxury department stores opening their off-price stores at a record pace. For example, Saks has just under 40 full-price stores with 83 Off Fifth discount venues. Neiman Marcus has 41 full-price stores and 43 of its Last Call stores. The off-price stores also outnumber the regular establishments at Nordstrom, with 118 full-line stores eclipsed by 178 Nordstrom Rack off-price stores. That number will skyrocket by 2020 when the company plans to have 300 Nordstrom Rack stores open. Another competitor for the flash sale sites? Brands doing their own limited-time sales. Some run for 3 hours, others for as long as a week or more. This Tory Burch sale started yesterday and lasts 5 days, ending on Friday.

Tory Burch

Tory Burch

Now we’ll look at some of the actual ‘bargains’ we found offered at varying sites. We begin with an example showing Gilt and Rue La La prices for a candle from Bluewick Harlow, a brand that appears to be offered almost exclusively at flash sale and discount sites. Obviously on this particular day (the screen grabs are from September 2, 2014) Gilt had the better buy.

Gilt/Rue La La

Gilt/Rue La La

One other consideration: be cognizant of what you’re purchasing. A cautionary word about the merchandise sold at the sites, via a 2014 story in the Boston Globe:

Instead of buying “distressed” merchandise that was never sold in traditional retail stores, some flash-sale companies are asking designers and manufacturers to create lower-quality clothing for them, said Steven Dennis, founder of SageBerry Consulting and a former executive at Neiman Marcus.

“A lot of the product now is merchandise made specifically for those channels,” Dennis said. “That gives them a much more reliable source of product, but it doesn’t have the cachet of the desirable brands.”

In other words, it’s just like the outlet/off-price stores, where much of the merchandise is made specifically for those discount venue.

Here’s another example demonstrating the need to know what you’re buying: Rue La La claims to offer “Coveted designer names” at “Members-only prices.” Below we show an “Addington Quilt” sold at Rue La La; it was also available at Walmart, and at a lower price! With all due respect to Walmart, I don’t think many Rue La La shoppers consider that retailer to be offering ‘designer names.’ At best, the pricing begs the ‘members of what?” question.  (The screen grabs below are from January 27 2015.)

Walmart/RueLaLa

Walmart/RueLaLa

By the way, this same set remains available at Hayneedle for $73; Wayfair is selling the set for $79.99; at Overstock it is $80.99, and the price is $124.99 at Kohl’s. Again, not to besmirch any of these retailers, but it’s unlikely readers would list them as designer shopping destinations.

Cosmetics are being offered with increasing frequency at the sites. Below we have another example of flash sale competitors going head to head, this time showing same day pricing at Gilt and Rue La La for Erno Laszlo MultipHase Highlighter; another instance when Gilt had the better price. (Screen grabs are from the same day in August 26, 2014.)

Rue La La Gilt

Rue La La Gilt

Next, we compare an accessory item: a pair of Ray Ban Unisex Wayfarers in black. At flash sale site Beyond the Rack the sunglasses are $119.99, while Overstock offers them at $116.99. (Screen grabs are from August 11, 2015.)

TOP: Beyond the Rack, BOTTOM: Overstock.com

TOP: Beyond the Rack, BOTTOM: Overstock.com

Another accessory item: the San Francisco Umbrella Company’s Scottish Terrier Umbrella, regularly priced at $49.95. It’s now offered for about $45.50 with the site’s 15% discount. At Rue La La the price is $35.99.

TOP: San Francisco Umbrella Company BOTTOM: Rue La La

TOP: San Francisco Umbrella Company
BOTTOM: Rue La La

Kitchen appliances are popular on the sites, especially November – February. Below we compare a Cuisinart® SmartPower ™ 7-Speed Blender. Rue La La offered the item at $59.99, it was $20 less at Bed, Bath & Beyond where it was $39.99. (Screen grabs are from March 10, 2015.)

Rue La La/Bed, Bath & Beyond

Rue La La/Bed, Bath & Beyond

Seeing Rue La La launch its Rue Kitchen Shop event today (August 12, 2015) prompted me to do a quick comparison and see if RLL’s appliance prices were much as seen in the March comparison shown above. Rue La La is featuring good brands in the sale, including Nordic WareBergHOFFShun (knives), Rosle, and Cusinart. Our price check appliance is the Cuisinart® Mini-Prep® Plus Food Processor in sapphire blue. You can see how the prices break down: at RLL the item is $39.99;, Cuisinart is selling the item at the same price, $39.95; Bed, Bath & Beyond also has its processor priced at $39.95. This doesn’t mean Rue La La’s price is bad, not at all. But it certainly isn’t any bargain either. (All photos and pricing information from August 12, 2015.)

Rue La La/Cuisinart/Bed, Bath & Beyond

Rue La La/Cuisinart/Bed, Bath & Beyond

One more comparison before we close, this time the ‘Landy’ flat from Tommy Hilfiger. We show the item selling for $39.99 at flash sale site Ideel, while it was $62.99 at 6pm.com; in this case the price was clearly better at the flash site. (6pm is the Zappos discount site. Screen grabs are from January 27 2015.)

Ideel/

Ideel/6PM

One more word to the wise from that Business of Fashion story:

…the deal offered on a pair of current season jeans by a department store like Bloomingdale’s can be more alluring than one offered by Ideeli on a pair that is three or four seasons old.

Definitely something to keep in mind.

Recapping our tips:

  1. Know your prices A – be sure you can’t find it someplace else for a lower price
  2. Know your prices B – be cognizant of those ‘compare at’ or ‘slash through’ prices, what are they based on? Gilt at least addresses the issue in its FAQs, I’ve not see explanations on other sites. (It’s an increasingly sensitive topic for off-price retailers, with the recent filing of a proposed class-action suit against TJ Maxx’s parent company, TJX, for its ‘compare at’ pricing strategy.)
  3. Know the return policies and shipping costs – it’s no bargain if you’re unable to return an item that doesn’t fit, or if all the savings are being eaten up in shipping expenses
  4. Know the merchandise – is it actually a known brand or designer, or an off-price label, possibly made of lower quality materials? Does the site tell you about items made specifically for them? Gilt has always been very good at this, while other sites (this includes you, Rue La La) are not. At Gilt the notice reads this way: “This brand is available exclusively on Gilt. It was created in collaboration with our preferred brand partners to bring you great style at an accessible price point.” Look for this verbiage in a lighter type on the bottom of the description.
  5. Know the brand – is it from a heavily promotional company, with merchandise frequently offered at flash sale sites? If so, you may be able to find it elsewhere at a lower price.
  6. Know the strategy – avoid buying into the ‘time is running out!’ frenzy created by the limited-time element of a sale. Unless it is an absolutely-must-have-it-now-they-never-have-it-in-my-size-item, take time to think about the purchase.

We leave you with a list of more notable sites, beginning with companies serving primarily US and Canadian customers:

APPAREL/ACCESSORIES

SPECIALTY SITES:

OTHER COUNTRIES:

  • Vente-Privee is considered the ‘father’ of flash sale shopping, pioneering the business model in France in 2001. Merchandise was available in the US through a partnership with American Express, but that operation has shuttered. The company’s wares are offered in several European countries.
  • Australia’s “My Sale” shut down in December; however, its parent company (My Sale Group), is still operating multiple flash sites online, including BuyInvite in Australia and also New Zealand. WKW friend Rachael Tagg reports that OZSale features a number of brands Kate wears: Ted Baker, Zara, Aquascutum, and Sebago are among those she says the site carries. Rachael, as well as another WKW friend, Belinda, both mentioned Brands Exclusive Australia as another option.
  • In the UK Achica offers mostly home goods, Cocosa focuses on luxury fashion
  • Brand Alley operates in the UK as well as France, Italy, Spain and other European countries

Friday we will talk about Kate-specific brands and bargains at the flash sale sites. Don’t be shy about sharing any of your tips and tricks for shopping the sites; let us know about great deals you may have discovered via the sites, or words to the wise from a less-than-stellar purchase.

NOTE: The post has been edited to include the information on the Cuisinart® Mini-Prep® Plus Food Processor in sapphire blue.

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Ming

Friday 11th of December 2015

event at gilt, i saw fake discount rates many times like that "Ru La La vs Walmart" example.

Patty

Tuesday 18th of August 2015

I want to know what Kate wore, but I really enjoyed these articles which give us consumers more insight into the fashion industry and retail world. Very well done!

CAR

Sunday 16th of August 2015

For athletic and outdoor gear, I also like http://www.steepandcheap.com . It is a "flash sale" site, but they have a reasonable return policy and decent shipping costs.

sepollcas

Saturday 15th of August 2015

" avoid buying into the ‘time is running out!’ frenzy created by the limited-time element of a sale", this is very important!

The Way We Were

Saturday 15th of August 2015

I used to think of myself as one of the shrew shoppers but it turned out, after years, I am not. I ended up buying things I didn't need purely lured by the "dirt cheap" price. Now I only buy the stuff I tend to wear or use right away. I also stopped looking at those "bargin" off-price stores but rather buy from Nordstrom or Bloomingdales where if I change my mind, I can still return. It takes a lot time and energy to dig through the racks to find real treasure but I start wondering: is it all worth it after all?

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