July 22, 2024

Advertising: Bargains on Flash Sale Sites Serve a Long-Range View

After Saint Parfum sold $55 candles perfumed with peony and grapefruit for $25 on the flash sale site One Kings Lane, visitors to Saint Parfum’s own Web site spiked to 6,000, from about 250 on a typical day. In the next few months, sales of full-price merchandise on Saint Parfum’s Web site and at retailers also climbed, and 20 new retailers asked to sell the candles.

“We don’t profit much, because of the discount,” said Spencer Krenke, Saint Parfum’s founder and perfumer. “But more important is that what we gain is long-term, loyal customers.”

Saint Parfum’s experience has become the norm for many brands that sell discounted merchandise on flash sale sites like One Kings Lane, Gilt, HauteLook, MyHabit and Ideeli. Brands like Volkswagen, Brooks Brothers and Starbucks have used the sites for marketing campaigns.

The phenomenon is an example of the muddled lines dividing editorial, advertising and commerce online as Web sites increasingly serve all three purposes. And it is the latest evidence that shoppers, overwhelmed by the options online, are turning to e-commerce sites that do the choosing for them, narrowing the selection and giving advice on which brands to buy.

“It’s really becoming less about dumping inventory and more about shining a spotlight on a new or existing brand,” said John Gerzema, executive chairman of BrandAsset Consulting, a marketing strategy firm. “Getting an endorsement from a company like Gilt or HauteLook or Ideeli is really a way to get your brand a higher profile that spending additional marketing dollars really can’t do.”

One Kings Lane, which sells discounted home décor, says that these days it is as much a marketing company as an e-commerce company.

“Our pitch actually starts that way now,” said Susan Feldman, co-founder of One Kings Lane. “Instead of, ‘We can help you with your excess and closeouts,’ the marketing part of it is really much more powerful.”

Amazon.com introduced its flash sale site, MyHabit.com, in March, partly because brands that sell on other Amazon sites said they wanted to use flash sales to get in front of new customers, said Maria Renz, president of MyHabit.

Amazon’s merchandise buyers write testimonials about the brands at the top of each sale page, and Amazon prominently links to the Web sites of the brands so customers can also shop there.

“We’re very happy to also drive traffic to the brands,” Ms. Renz said. “At the core, these sites are great ways to introduce your brand to a new customer.”

Some brands have started using Gilt, the most prominent of the flash sale sites in the United States, to introduce products instead of selling overstock.

To introduce the 2011 Jetta, Volkswagen sold three of the $15,995 cars for $5,995 on Gilt. Fifty-five thousand people who missed out added their names to the wait list, and Volkswagen sent them $500 coupons to buy or lease a Jetta.

Volkswagen sold 69 full-price cars as a result of the Gilt sale and has an e-mail list of interested customers, said Charlie Taylor, general manager of digital marketing for Volkswagen of America.

“This wasn’t a sales objective, it was only three cars,” Mr. Taylor said. “It was very much an awareness play, meant to build buzz.”

Brooks Brothers introduced its Back to Campus line, slimmer-fitting clothes for younger men, by selling the clothes at full price on Gilt Man six weeks before selling them in stores to advertise to younger men who shop on Gilt but not generally at Brooks Brothers.

Seventy percent of the buyers on Gilt Man were under 39, according to Brooks Brothers.

Some of the flash sale sites are evolving into online fashion or design magazines. They often serve as copywriters, photographers and stylists for the brands, melding commerce and editorial in ways that were never possible for print publications.

“We are moving toward being an online retailer that understands that our mission is as much to impart information and give you ideas and help you make the best purchasing decisions,” said Susan Lyne, chairwoman of Gilt.

Younger people are more likely to discover new brands online than in magazines or department stores, she said, and they like doing it online because they can buy on the spot.

Gilt employs 100 stylists, makeup artists and photographers to shoot models wearing the clothes. It hired Ruth Reichl, former editor in chief of Gourmet and former restaurant critic for The New York Times, as editorial adviser for its new food site, Gilt Taste, which publishes essays and recipes in addition to selling food.

To promote another Brooks Brothers sale on Gilt Man, Gilt interviewed the costume designer for the detective TV show “White Collar” about men’s fashion on GiltManual, a site with articles like “How to Clash With Panache” and “How to Match Your Suit to Your Shoes.”

One Kings Lane has hired writers from Elle Décor and Domino. It publishes slide shows and articles with tips from designers on how to layer rugs or the latest wallpaper trends.

“These are e-commerce platforms, but they’re also marketing and media platforms rolled into one,” Mr. Gerzema said.

Article source: http://feeds.nytimes.com/click.phdo?i=b0f6fefa5297f3d010585232a0dd2c51

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