Thanks to a tip from a friend, the outnet.com is one of my favorite new flash sale websites. Even though the labels are exclusive, the site doesn’t insist upon that “members only” policy. The above patterned dresses by Pucci, Matthew Williamson, and Erdem (respectively), were all available for a very limited time on the website at over 60% to 70% off.
*This article appeared orignally in the Montreal Gazette and on the Canada.com network.
At a large warehouse in St. Laurent, in a newly crafted photo studio, Alisa Pysaryeva, a model from Folio agency, strikes a pose in a Whitney Eve dress. A few doors down in another studio, a mint green Balenciaga handbag is being puffed and positioned for its photo op. Luxury handbags are lined up, awaiting their turns.
Photo shoots like these happen daily at Beyond the Rack, a Montreal company that sells discount Gucci, Juicy Couture and lesser-known brand-name items at online “flash sales.” A flash sale means that bargain items -typically last season’s overstock and sample pieces reduced in price by 40 to 70 per cent -are available only for a brief, limited time.
For Beyond the Rack’s shoppers, that’s a mere 36 hours after the sale opens at 11 a.m., when a mass emailing alerts customers to the latest deals -like the Balenciaga bag going for $1,599 instead of the original $2,095. Buyers then act fast. Not only will the company’s million-plus customers be vying for the same discount items, but when the time’s up, the “flash sale” is extinguished.
Far beyond Beyond the Rack -indeed, over the border and across the sea -similar flash sale websites are scorching through the Internet. Popular sites, all ending with a . com, include Gilt Groupe, Haute-Look, Vente Privee, RueLaLa, Enviius, Ideeli and Fashion Vault (eBay’s latest attempt get into the game). Each has its own photo studios, models and designer labels, and each insists that its customers are really “private members”-that is, to get daily emails about these flash sales, shoppers must be invited to join the website by a friend, or request a membership online.
Even if practically everyone who signs up for most of these sites is accepted, it’s a tactic that helps turn potential waste into a desirable commodity.
“Like a bouncer with velvet ropes, you’ve got to create a fence, a barrier around these clearance items,” says Beyond the Rack CEO Yona Shtern.
The membership policy also helps brands have more control over their inventory and brand image. “As well as through some other site technology, we’re able to ensure that our events don’t show up on search engines,” points out Kerry Bennett, marketing manager for HauteLook.
The flash sale formula, complete with its glamorous packaging, was concocted in 2001 by Vente Privee in France. In 2007, the trend went viral in North America thanks to New York’s Gilt Groupe, a company that sold excess inventory from niche designers like Zac Posen and Alexander McQueen. Now, with more than 2 million fashionistas on its roster, Gilt’s designer picks are still some of the most exclusive in the business.
After Gilt, flash sale websites were ablaze. Most of these sites typically feature shoes and apparel that are less high-end than Gilt’s. New and innovative sale site The OutNet, run by luxury website Net-a-Porter, is an exception to that rule, with its Jimmy Choo heels and Valentino dresses. But designer handbags, sunglasses and accessories are common items on all these websites, which help draw attention to the lesser known and down-market labels that are also there.
“Those bags put us on the map. It’s instant credibility,” Shtern said of the Balenciagas and Pradas sold on Beyond the Rack.
Unlike Gilt, many websites now ship internationally – and they’ll also ship you just about anything. HauteLook, which is based in L.A., will be expanding to different categories like “gourmet food, wine, and experiences such as spas and gym memberships,” Bennett said.
Typical of the sport, most bargain hunters like to play the field and sign up for several flash sale websites.
“About a month ago, I bought a handbag from Gilt,” said Melissa Mattiuzzi, 34, an event coordinator for a cosmetics company in Montreal. The bag, which she bought for $99 but retailed for $250, was shipped to a friend’s address in the U.S. The pal brought Mattiuzzi her purse when visiting the city.
“And in April, I bought two pairs of Ray Ban sunglasses and three rings from Erica
Anenberg from Beyond the Rack,” she said. The Ray Bans were $100 each, so she saved about $40 on an aviator model and $80 on the brand’s Wayfarer style. The rings were between $60 and $70 each, and could run $80 to $180 elsewhere online, she said.
Mattiuzzi said she wasn’t worried about not trying on the sunglasses, since she bought them to replace older pairs. The rings were trickier. While Mattiuzzi knew her own size, two of the pieces were gifts. Fortunately, she lucked out and predicted the correct ring size.
“All the brands I buy online are brands that I know,” Mattiuzzi explained. As such, she’s better able to judge whether the size and style will work -and she can also tell how good a deal she’s getting.
Dvorah Bowen, who lives in Dollard des Ormeaux, purchased discount Ugg boots for $129 from Beyond the Rack, saving about $70. “Footwear is easy because you know your size,” she said. “Handbags,
scarves, accessories are good purchases, too.”
“Clothing is another story,” Bowen said. “I would have a hard time buying a dress or pants without trying them on first.”
Unless one is an expert shopper and knows his or her size in the innumerable brands that appear on these websites, potential purchases are often limited.
Faced with a constant barrage of great deals every day, customers often welcome such boundaries.
“I love my deals and I hardly use it,” said Matt Elkind, a Toronto-based real estate agent who has been logged on to Gilt Groupe’s men’s site for about a year. He said he has never even heard of half the brands listed, which sometimes makes him feel out of the fashion loop. “And God bless the shoe industry, but my size can go from 8 to 11. So, I can only buy shoes from them by the same manufacturer with consistent sizing.”
Another common complaint with flash sale shoppers is that deliveries to Canada can be slow. It took about three weeks for Mattiuzzi’s sunglasses to arrive and a month for the jewellery from Beyond the Rack, even though the company is in Montreal.
Beyond the Rack typically doesn’t receive the inventory from the distributor until it’s purchased by a customer (except for the sample items in photos). Once the piece arrives at the Montreal warehouse, the item is then repackaged and sent to the customer. All of this can take a while.
Another complaint from Canadian customers concerns shipping costs and return fees. Beyond the Rack doesn’t charge Canadian duties, but a flat $11.95 shipping fee applies to each order, no matter how many items. For HauteLook, there’s an 18-percent surcharge that covers PST, GST and duty fees, plus a $10.95 U.S. shipping fee. Returns involve an additional shipping fee.
For Gilt’s high-end clientele, the company purchases most of its inventory upfront and keeps it in a warehouse; its U.S.-only deliveries take two to five business days and cost about $9.95 U.S., plus applicable state taxes. This quick service makes sense: If customers are forced into making split-second decisions on impulse buys, why should they wait for delivery?
Some of the biggest fans of flash sale sites are the sellers themselves, who get to ship off their excess inventory and enter a new marketplace.
Montreal-based shoe company Modern Vintage earned some major prestige by being posted on Gilt Groupe.
“It really raised our brand awareness -we were on the site with other great designers like Chloe and Marc Jacobs who have a huge following,” said Jackie Yermus, creative director of Modern Vintage. These names helped absolve Yermus’s fears about compromising her brand’s identity and selling the product at a reduced cost, since the shoes are typically old stock.
It also helps that Modern Vintage’s Gilt Groupe sales, combined with their lower-end line Rose Gold sold on Gilt’s Fuse website, can move about 5,000 units per season, according to the company’s in-house sales numbers.
Montreal’s Andy The Anh found a useful sales venue at HauteLook. “(Getting on) is not as easy as it seems. We mandated someone to find opportunities for us for overstock, and he came to us with this,” said Etienne Lecompte, president of Andy The Anh. Lecompte said he tried hard to get on Gilt Groupe and Agent Privee, but was still pleased to land on Haute-Look. He said they did a few sales with Beyond the Rack as well, but sales volumes are much higher with the U.S. site.
“It’s always a trouble to liquidate stock,” he said.
With HauteLook, he can also introduce the brand to a new American clientele who might be more willing to test out the clothes at 70 per cent off. To not compromise the brand, Andy The Anh flash sales are kept to one per season.
“The only real downside is that we have no end-user information or data,” Lecompte said. “I have no idea who these new customers are, where they live. All I know is what they buy on an aggregate basis.”
Fortunately for Lecompte, chances are that those new customers -who can now tell if they’re a Size 4 or a Size 8 in an Andy The Anh, thanks to that first purchase -will be more willing to digitally check out with that fitted pencil skirt in the future.