24 September 2010

Membership-only, sample-sale websites offering as much as 80% off

It is no secret that during the past three years, the retail industry has tanked, and no part of it more so than luxury. But during this time frame, a new breed of entrepreneurs has sprung up and sized the opportunity: they took the glut of luxury goods and created membership-only, sample-sale websites that bring the excitement of a door-buster sale online, with prices as much as 80% off. To say that these websites have become the hottest area in retail is understatement. While second-quarter sales of luxury retailers and department stores increased in the range of 5 to 10 percent over the year before, some of the online sales websites zoomed 200 or 300 percent. The online private sample-sale category generated $ 1 billion on revenue last year, and some say it could grow to $8 billion in the next five years.

All of the websites attract shoppers who crave what the can't afford and love luxury brands and exclusivity. The sales are launched daily and usually run just 36 to 48 hours, which turn shopping into an event, and they train customers to check their mail in-boxes every morning for fresh, new merchandise and to buy things they didn't even know they wanted. While actual elbows may not be flying, at 9 every morning, hundreds of thousands of shoppers are being whipped into frenzy over discounted Carolina Herrera dresses or Bulgari sunglasses.
As in the heyday of department stores, when it was Harvey Nichols via Gallery Lafayette, every private sale website has a distinct identity.
Adam Bernhard, former executive of an international business and and founder of an inventory clearance company, launched in Los Angeles HauteLook.com back in 2007. His selling point is "casual sensibility". Currently the website has 2.7 million registered members and it is "Free to Join".
The concept proved a fortune. Several sales start daily and last about 48 hours. Products include women's, men's and children's apparel, home and beauty products, food and wine at discounts up to 75%. Online shoppers can grab deals such as Skinny jeans by 7 For All Mankind for $99, while the retail price is $218. The choice of brands includes Harve Leger, Bulgari, Taschen, BCBG and more.

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