The concept is pretty straightforward: High-fashion clothing and accessories at deep discount prices—but only for a few hours. And only online.
Flash sale e-tailers like Gilt and Rue La La, both founded in 2007, as well as Zulily founded in 2010 caught on with online shoppers quickly. But is the phenomenon a flash in the pan?
As the economy improves, fashion brands aren’t left with excess inventory the same way they were a few years ago. That could be because the consumer has bounced back or the high-fashion clothes makers have scaled back on production. Or maybe the novelty has worn off.
But Rue La La's CEO sees his business strengthening. “Flash has a really promising future,” Steve Davis tells Yahoo Finance's Aaron Task in the video above. “That promising future we see every single day in our results,” he says.
What makes Rue La La different, according to Davis, is the overall shopping experience. “We focus every single day on must-see shopping. We’ve got a programming department like every television station has a programming department.”
Davis says he sees his company’s competitors more in the fashion world than in the retail world. “You don’t get inspired by Vogue and reading magazines anymore,” he says. “You actually get inspired on Rue and the curation and the assortment of fashion and style.”
Rue La La features items like Chanel, Gucci and Fendi as well as articles about trends in fashion. “We’ve got to make sure we’re interesting and innovative every single day,” he says. “We have customers that visit two to three times a week like a media company. Not 2 to 3 times a year like a retail company.”
But Rue La La is not the only flash sale site selling high-end brands. And brick-and-mortar retailers like TJX’s T.J. Maxx and Marshall’s carry some of the same name brands. “There is always competition for the best inventory. We are always competing for it. It’s the same thing today as it was 7 years ago.” But Davis says what Rue La La offers for consumers is attractive for high fashion brands, and that they want to sell excess and off-price merchandise on the site because of that. “What Rue La La offers to brands is allowing them to use their excess and off-price merchandise presented in a way that is as beautiful or more beautiful than the way they present their full price merchandise.” That means off-price and excess can be “used as a marketing weapon to allow a brand to introduce themselves to new customers.”
Davis says more than 60% of purchases on Rue La La are the first time they have purchased that brand ever or for the first time in two years they have shopped that brand. “We’re introducing new customers to brands and we are doing it in a beautiful way.”
Last year, there were reports that company had been looking for a buyer. Davis says, “Rue La La is not for sale” and that the company had a record year last year.
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