Earlier this month, Business Insider listed Vente-Privee, creator of the flash sales business model, as #10 on its DIGITAL 100 list of the world’s most valuable private tech companies…twenty spots above it’s primary US competitor, Gilt Groupe. With the flash sales category slowing down since last year, we spoke with Mike Steib, CEO of vente-privee USA, about its partnership with American Express, its competitive advantage and how the brand is planning to grow.
Brandon Gutman: It’s been just under a year since your launch in the US and the joint venture with American Express. How’s the business doing?
Mike Steb: It is super exciting. We have worked with hundreds of brands already and have signed up members at a faster pace than the other players in this space in their first year. Our joint venture with American Express has helped us establish the highest-end member base in the industry, and has enabled us to deliver unusually valuable data and insights to our brand partners. We also launched benefits on vente-privee exclusively for American Express Cardmembers such as free shipping and access to private shopping events, which folks seem to really like.
The team is great, energy at the office is high, and we really love our customers. We are hiring and expanding quickly and just moved into our new offices and studios in Hudson Square, New York City. It has been a really awesome year.
How do you keep customers engaged and coming back to check out new sales?
We do it the old fashioned way: with great brands and discounts that our members crave. We are the only major private sale site that sells 100% new and authentic brand merchandise at deep discounts. There are no tricks. It turns out people love to shop world-leading brands at big discounts. In addition, we offer a beautiful boutique shopping experience. While so much of ecommerce is transactional and soulles, we are bringing the emotion and the fun of offline shopping to online shopping.
Mobile appears to be a growing factor; how is it affecting your business?
Our business is built on impulse purchases — sales start at 10AM and are limited to just a few days so that we can move our brand partners’ inventories without damaging their full retail price. You couldn’t imagine a consumer device more conducive to our business than a smartphone. People are connected constantly and use their phone to satisfy every moment of curiosity and desire. As you would guess, we are seeing a ton of traffic and revenue through our mobile apps and mobile-optimized website.
What are the main priorities on your radar?
Our top priority is always offering a great service to brands and growing our roster of partners — our members will enjoy twice as many brands on the site next month compared to just three months ago. In addition, we will be significantly enhancing our user experience in the coming weeks.
With customer acquisition costs increasing across the industry, how do you balance investment in new growth?
Our primary acquisition channels are through American Express cardmember marketing and word of mouth. American Express emails, website promotions, statement credits, even full-page ads in the monthly statements have helped to create a strong vente-privee brand with the American Express cardmember base. These customers shop and buy at a significantly higher rate than members acquired through other channels. We are very fortunate to have this partnership — I imagine this must be a tough business for companies who have to go out and buy their customers every day.
What is your merchandise strategy to compete with MyHabit, Gilt, and HauteLook? With limited merchandise, how do you gain a competitive advantage?
We are not only competing with other flash sale sites — there is more than $50 billion in offline off-price merchandise sold through outlet stores and malls every year in the US. Each year more people spend more time and money shopping on the web, and that shift is fueling growth for us and our other friends in flash sales. The way we differentiate ourselves is by first and foremost being a service to brands. We take their remnant inventory and give it a new life by shooting unique editorials as creative and beautiful as ads in the top fashion magazines. The brand is never mixed with lower-end stock, and never rerun in the same quarter. We present each offer to the highest-end member base in private sales and create desire for the brand. With our unique approach, our customers are more likely to buy the brand in the future at full price.
With that approach we get great brands at significant discounts, which makes us stand out in our members’ inbox every day. In addition, we are the only private sales site with a robust global sourcing infrastructure. We are able to offer our members leading US and European brands that are not often found on other sites.
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