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Since the arrival of VentePrivée, several independent ventures have been
launched under the same principle, many of them specializing in the luxury
segment, duly baptized “sample sale” websites. The US-based Gilt Groupe
leads the way, having been created in 2007 and since generating a member-
ship exceeding one million members who are frequent buyers. Collections
ranging from clothing to leather goods from a line-up of brands includ-
ing Valentino, Oscar de la Renta, Ralph Lauren, Sergio Rossi and Giorgio
Armani have all been retailed on the website at prices marked down as much
as 70 percent off the original prices. Its format of access by membership only
and its sale period restriction to 36 hours has ensured that elements of exclu-
sivity and discretion have been maintained. Others like Ideeli.com, Koodos.
com and PrivateOutlet.com have incorporated elements of this formula to
appeal to an extended clientele. Outnet.com, the recently launched website
from Net-a-porter.com that is uniquely for the sale of its products at reduced
prices, has also introduced 72-hour “pop-up” sale events, incorporating the
formula created by VentePrivée and popularized by the likes of Gilt. On its
launch date on 16 April 2009, several of its pieces were sold out in the first
ten minutes. On the home decor front, websites like MyFab.com is also mov-
ing to change the rules of the online retail of luxury furnishings and home
fashion. The website, which works directly with the manufacturers, intro-
duces weekly sales based on themes, styles and brands. Price reductions are
often between 50 percent to 70 percent and sale periods are also restricted
(see Figure 6.11).
What is the consequence of the abundance of sample sale websites for lux-
ury brands and what impact would it have on the way consumers perceive the
brands? Does it affect the factors of “desire” and “dream” that luxury brands
work so hard to create and nurture like a treasure? When clients are able to
buy a Baume & Mercier watch at 70 percent discount, will they ever buy
another watch from the brand at full price? If a Gucci bag's retail price moves
down from
450 will consumers still crave to have the handbag
at all costs? Will the appeal that Gucci holds for them diminish? Will they
perceive the brand as highly as they do other luxury brands?
Sample sale websites are taking the Internet back to its initial positioning
as a channel of retail for price-discounted goods or for deals and steals. If you
remember the early days of e-retail in the mid-nineties, online shopping was
viewed as risky not only because of security issues, but also due to its percep-
tion as a retail channel for a mix of low quality-low priced and fake products.
What has changed in this mix since is the low-quality and fake dimension
because, with time, consumers have become savvy enough to detect fake and
low quality products and e-retailers have also built their reputations and cred-
ibility. The issue of pricing, however, remains the only point that is yet to find
a common consensus among luxury brands and it is becoming more complex
with the spread of sample sale websites. What will happen to luxury brands
in this environment? How will luxury retail and e-retail sustain itself with the
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