Lessons from the future of retail: Private sales
Posted by on July 14, 2009 | 2 Comments
The Wall Street Journal has an interesting article about a growing trend in online retail: private sales. Some of the marketing principles that make these successful apply more widely to the fashion industry.
Companies like Gilt Groupe, HauteLook and RueLaLa hold short sales open only to invited members. Marketing centres around getting members to refer friends to sign up. Once on the mailing list, members receive exclusive access to 24-72 hour designer sales.
Holding these sales is relatively cheap due to the small amount of dead stock. By offering a very limited product selection at hugely (usually 50% +) discounted prices risks related to surplus stock go down. It also heightens the sense of scarcity, which is a powerful tool in private sale companies’ marketing arsenals.
If you run a fashion label, think about how these principles could help you. Limit your sample offering; this means both less work for you and less costs for machinists, patterns, etc. New designers often make the mistake of making their early collections too broad. This approach comes from the hope that making enough different styles makes it more likely that any given buyer (retailer) will find something they like. But buyers don’t invest in individual pieces; they invest in your brand. The more clearly you communicate what you’re about, the more likely buyers are to buy from you.
In this way making collections more focused can cut costs while sharpening your brand identity.
How do private sale companies avoid the gigantic advertising costs faced by other retailers? Mailing lists are a big part. And word of mouth marketing to populate those mailing lists also plays an important role. If you haven’t already started, begin building your mailing list today.
Invite customers who you know like your products. Offer something in return for them signing up. Give people an incentive to refer their friends. This can be exclusive access to sample sales, discount prices, prize draws. Anything that people might be interested in! Make referring friends easy. Just make sure you don’t overdo it, or get tempted to spam. Only to send out announcements when you have something genuinely interesting to offer; make it easy to unsubscribe. Tools such as mailchimp make handling mailing lists easier than ever.
Behind every success story, there’s a wealth of lessons to be drawn. Understand why some companies struggle. And copy the companies that are successful (business practises, not creatively!).
Tags: fashion business > fashion marketing > gilt groupe > hautelook > marketing > private fashion sales > private sales > retail > ruelala
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2 Responses to “Lessons from the future of retail: Private sales”
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July 14th, 2009 @ 12:59 pm
Amazing. Everything you just said so so spot on. These are all things we have been discussing here at Holstee. Establishing the values of your brand is equally as important as designing your products.
Keep the tips coming!
July 14th, 2009 @ 1:16 pm
Nice writing. You are on my RSS reader now so I can read more from you down the road.
Allen Taylor