As if we need another way to spend money on luxury item Ideeli comes along and makes it that much harder to say no. This morning’s NYT reports that this retailer is taking luxury to the next level: the airwaves. Apparently when you sign up you get text messaged when Ideeli is offering a bargain that might be appealing, like a Valentino bag at 50% off, and it can be yours– if you move quickly. According to chief executive Paul Hurley items can sell out in less than 10 minutes. That’s some fast money.
For more details read the full story below.– Joanne Molina, Senior Editor
A Quicker Resort This Year to Deep Discounting
By BOB TEDESCHI
Published: December 17, 2007
KMART made a generation of bargain hunters react like starving dogs to a ringing bell. Now Internet companies want to bring the blue-light special to the cellphone — only this time, the bells are text messages telling shoppers that Valentino clutches, Christian Dior sunglasses and other luxury items are selling at more than 50 percent off.
Annie Tritt for The New York Times
Upmarket handbags will be the sort of items offered on Ideeli’s Web site.
Annie Tritt for The New York Times
Ideeli’s chief executive, Paul Hurley, sees a game aspect in scarcity.
That is the concept behind Ideeli, a Web site that will officially be introduced Monday, offering members a chance to buy heavily discounted luxury items — as long as they are quick enough. Some items sell out within hours.
Ideeli is partly shopping as sport, but it also speaks to the nervousness of retailers this holiday season. Because of economic fears linked especially to the subprime mortgage trouble, retailers and brand producers scaled back their inventories with early holiday promotions last month amid concern that consumers planned to spend less.
That has proved to be a boon to sites like the online liquidator Overstock.com, Bluefly and others that sell highly discounted products — what is known in retailing as “distressed inventory.”
For online shoppers, this has meant deals on items that are rarely discounted until after Christmas, if at all, and deeper discounts on other goods that would have sold out at higher prices in previous years. And although the prices on some items may still be beyond the ability of straitened shoppers, they could make other gift givers look like heroes.
Bluefly.com, which also sells discounted apparel and accessories from upscale brands, has had an easier time finding inventory this year than in the past, said Melissa Payner, its chief executive.
Although she declined to name specific brands for fear of offending the luxury manufacturers she counts on as suppliers, Ms. Payner said that the flow of designer handbags has been so strong that the site has been sending e-mail messages to its customers twice a week to promote new bags. In years past, Bluefly has not had enough stock in this category to justify a single e-mail promotion, she said. A quick check of the site on Sunday showed that brands like Dolce & Gabbana, Furla, Goldenbleu and Linea Pelle were being featured.
“We couldn’t necessarily have gotten the selection in our designer handbag and accessory areas,” Ms. Payner said. “You may have seen the same names there, but not the breadth or depth of assortment.”
Patrick Byrne, chief executive of Overstock.com, said the supply of distressed goods “isn’t just limited to apparel.” Electronic goods and jewelry are also plentiful, with diamond necklaces flourishing on the site.
“Retailers in general had a terrible Columbus Day so they didn’t reorder like they usually do,” Mr. Byrne said. As a result, he said, manufacturers began offering him items in November, well before other years. That has put Overstock in the unusual position of carrying discounted products that were still available at full price at Macy’s and Nordstrom.
Like Overstock and Bluefly, Ideeli works as a clearinghouse of sorts for goods that did not sell elsewhere at full price. And, like Bluefly, Ideeli limits itself to high-fashion goods. Unlike these other companies, though, Ideeli is focused squarely on women, and it does not operate like a typical retailer.
Users gain access to Ideeli through an invitation from the company or from existing members. (The company said it would open memberships until midnight Tuesday). The site sells just three or four products over the course of a week, which members can preview. They then stand by for e-mail or text messages saying when a specific product has gone on sale.
Then comes the rush. Over the roughly six months of testing the site, Ideeli’s chief executive, Paul Hurley, said, items sell out within two hours, and sometimes within 10 minutes. “We’re careful to maintain a sense of scarcity,” Mr. Hurley said. “And women love this. There’s a whole sort of game aspect to it.”
Shoppers who want to increase their odds of scoring a bargain can pay $8 monthly to shop an hour earlier than general members. About 10 percent of the site’s 10,000 current members do so.
There is, of course, a downside to scarcity. Because the site carries enough of a given item to satisfy only about 5 percent of the customer base, many customers will go away disappointed. But Sucharita Mulpuru, a retail analyst with Forrester Research, said the strategy is important for selling prominent luxury items. “This is a good way to drive a sense of urgency without diluting the marquee nature of the item,” she said. “They’re not just dumping everything on a site.”
Ideeli just received $3.8 million in venture-capital financing from, among others, Kodiak Ventures, which also backed ChannelAdvisor and Groove Media. Those backers will not get rich selling four items a week in limited quantities. Next year, Ideeli plans to more aggressively sell advertising to brands that want to reach its fashion-conscious audience. Premium memberships can also be expected to increase revenue.
In introducing a site that helps apparel and accessory makers find a market for slower-selling items, Mr. Hurley’s timing is good. He said he has seen many manufacturers “having a tougher time this year, so there’s more product available.”
Big offline liquidators, like Genco of Pittsburgh, said they too had seen subtle changes in the market. Robert Auray, president of Genco Marketplace, the company’s liquidation division, said that while most categories had shown little change, retailers and manufacturers of apparel and consumer electronics were liquidating more goods than in years past. “Super-high-end brands are doing fine,” he said, “but mass-affluent brands are having a tougher time, so more product is available than there was.”
Mr. Auray, whose company sells more than $1 billion worth of distressed goods annually, said: “Retailers are getting more and more careful with buying, so they may be canceling orders. Everyone’s a little nervous about the health of the consumer right now.”See the Top Ten Summer 2016 Trends for Women Over 40
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