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EcommerceBytes-NewsFlash, Number 2097 - August 07, 2009 - ISSN 1539-5065     Previous | | Next
Shoppers Flock to Daily Deals - By Invitation Only
By Greg Holden
EcommerceBytes.com
August 07, 2009




Everyone likes the feeling of discovering a special deal or sale that other people don't know about. That's one of the reasons shoppers flock to ecommerce websites: they want to find unusual price reductions or special items they can't get at their neighborhood stores.

A new breed of ecommerce sites is capitalizing on that principle, even in the current tough economic climate. They're called "private sale" websites. They combine the idea of membership in an exclusive club with the thrill of "daily deal" sites that hold sales for only a short period of time. Add to that the deep discounts they are able to get on high-end merchandise and services, and you've got a winning combination.

Sites like RueLaLa, ideeli, and Gilt Groupe greet visitors not with announcements of specific products, but with username and password boxes at the tops of their respective home pages. They don't advertise specific brands, and they don't tell you what their prices are. It's a secret: you have to register and become a member to find out what's going on.

Stacey Santo, Vice President of Marketing for RueLaLa, wouldn't even tell me what brand names they sell, or give me examples of the kinds of promotions they have held. The air of mystery is what appeals to their members, who wait for email announcements that go out each day at 11 a.m., announcing that day's deal. "Because we are a partner of our brands, we are discreet about that sort of information," said Santo. She added that the "daily deal" shopping model works for people who have busy lives: they know exactly when a sale will be held, so they check their email at the time that's convenient and place an order if the item appeals to them. If not, they wait for the next day's sale.

RueLaLa also offers "immediate gratification" because clothing is sold in season. "Our merchandise is always ready to buy and ready to wear because we sell in season," said Santo. "We offer a very well edited assortment. If a women wants a summer dress to wear this week, she can find it because we are selling summer dresses in July. We're not selling winter coats in July because our items are deeply discounted."

Word of mouth is the primary marketing strategy for RueLaLa and its competitors. "Our biggest membership driver is referrals: people tell their friends about the great deal they got." You can't argue with success: Since launching in April of 2008, RueLaLa has amassed a membership of a million registered users.

Shoppers also get some nudges that encourage them to do viral marketing. "We make it easy for them to invite their friends - from offering credits when their friends make their first purchase to providing tools for them to send email invitations highlighting brands or products they know their friend would love," says Rob Murphy, Senior Vice President of Marketing for RueLaLa. "We also provide all of our members with their own personalized invitation link, which they can easily share with their friends via email, Facebook, Twitter, or their blogs. It's become very popular with our members, many of whom are active bloggers and social media participants." What's the lesson for you, the lone entrepreneur or small-time seller? You might not be able to offer all the deals these bigger players do. But you can emulate their success by trying a few techniques:

  • Turn your customers into members. Give your customers the chance to subscribe to a newsletter where they get access to sales first or merchandise that other shoppers can't find.

  • Offer your members special deals. People who have already made purchases from you or taken the time to subscribe to your newsletter deserve special treatment. Create special sales just for them and send out notices by email.

  • Try the "daily deal" approach. Announce a single sale, once a day. Tell people it's only good for that day, or for another fixed period of time.

You might find that making your members feel special will result in some special treatment for you, too - in the form of added revenue.
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Greg Holden, who lives in Chicago, is the author of several books about eBay, including "How to Do Everything with Your eBay Business," second edition, and "Secrets of the eBay Millionaires," both published by Osborne-McGraw Hill. Find out more on Greg's website, which includes a blog related to his book "Internet Babylon: Secrets, Scandals and Shocks on the Information Superhighway," published by Apress.

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