A few days ago, Gilt Groupe, the leader in high-end flash sales, announced it will launch its first full-price retail site later this summer. A take-off of Gilt MAN, the new site called Park and Bond, will offer men’s apparel.
Although this is interesting to note, the new site really makes me wonder if it signals the decline of the flash sale industry. It started in the recent recession as a way to offload the unpurchased merchandise many luxury brands were sitting on, while offering prices that were more appropriate for the recession-era consumer. More importantly, Gilt Groupe created a channel that maintained brand equity for luxury brands, even while they sold their products at discount prices.
But now, there are rumors that all that excess inventory has gone away – likely a combination of luxury brands slowing production and also retail sales picking up. What will sites like Gilt Groupe have to offer if there is no overflow inventory? The new Park and Bond site suggests that Gilt Groupe is migrating to other business models to stay alive.
Another idea Gilt Groupe is testing out – produce online content to drive traffic while providing commerce opportunities (discounted or full-price) to readers. Gilt Groupe recently hired former editor of Gourmet magazine, Ruth Reichl, to edit their new food site, GiltTaste.com. With her background, it is likely Reichl could produce more content than simply picking products to sell.
Since Gilt Groupe was a leader in flash sale site business, their recent strategies suggest they are seeing the tide change before others, especially late entrants like Amazon and EBay. Does this signal the end of flash sale sites? I know I’m sick of receiving the emails, so maybe so…