
Nordstrom Acquires Flash Sales Site HauteLook For $270 Million  - ssclafani
http://techcrunch.com/2011/02/17/nordstrom-acquires-flash-sales-site-hautelook-for-270-million/
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unohoo
The whole local coupon / flash sales aspect seems really easy to launch - not
too much technical complexity involved etc.

However, as established retailers try to launch their own 'flash sales' site,
they realize that it is not as easy (operationally) as it seems from the
outside. Flash sales / local coupon sites have to fight a dual battle: one to
acquire users/customers and the other to acquire great merchants / deals.

That explains why many of them will end up acquiring existing players so that
they can 'hit the ground running'

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fookyong
There is one key difference. Physical goods.

The logistical challenges of warehousing and shipping physical goods reliably,
quickly and with the added complexity of the fact that every day you are
dealing with around 100 brand new SKUs that will _only_ be sold for that
day... are significantly higher than delivering a virtual coupon to a customer
via email. Significantly.

That is why there are many, many Groupon wannabes, and decidedly fewer Gilt
wannabes.

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unohoo
actually, they're not that bad for gilt/hautelook etc. if you compare them
with other online retailers. Most of the flash sales sites use some sort of
dropshipping (brand / manufacturer ships goods to gilt/hautelook and they ship
to customer after sale is over) -- contrast this with other retailers where a
lot of them stock inventory before hand.

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fookyong
well, I do have something of an insider perspective - my startup is in this
business :)

most flash sales sites will do a mix of warehousing and dropshipping depending
on brand. it's faster to ship with warehousing so obviously for popular brands
it's better to warehouse (your customer gets their order quicker).
dropshipping has other benefits such as managing risk, but brings with it
logistical problems e.g. the possibility that you could PO for stuff that
doesn't exist because of a mess up earlier in the process, and then you have
to explain to customers that sorry there was only 4 pairs of those shoes not
5, and you don't get yours - entirely possible when you work with a different
brand (small/large companies) every day.

I can tell you that despite the lack of need for warehousing, dropshipping
still brings with it many logistical problems of its own!

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troymc
Here's a recent net@nite interview with Greg Bettinelli, senior VP of
HauteLook, recorded Nov. 30, 2010: <http://twit.tv/natn179> (Interview starts
about halfway through)

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teyc
High fashion sales is an interesting phenomenon. It is the equivalent of
beanies babies for adults. They have high perceived value, limited quantities,
and are designed to be very collectible. Brand designers can create limited
editions that specifically sell through these flash sales outlet and not be
worried they will cannibalise their price premium.

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sriramk
I use Hautelook a lot (don't ask :) ). They are a pretty useful site and they
have good inventory. They've also done a good job of competing with Gilt
(which is the 800-pound gorilla). Good exit for them

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roschdal
Tech Bubble? Yes, sir.

~~~
maukdaddy
Not so fast. This is a site selling real stuff, making real income.

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poincare
How are they making money? Are they taking a cut out of whatever is sold?

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misterbwong
Yes.

