Trends with the Sample Sale Sites

Giff Constable ecommerce

giltipadLast night I attended the Fashion 2.0 meetup in New York.  Needless to say, it was *quite* a different scene from the Lean Startup meetup the night before.  The fashion panel (with some bright people like Suzanne Norris of Kate Spade, Florent Peyre of Elle/HFM, Steve Hafner of Kayak, and Apar Kothari of MyNines) helped round out my thoughts about sample sale sites.

My key takeaways:

  • Clothing and accessory brands are starting to treat the sample sale sites like they did outlet stores, i.e. they are manufacturing product specifically for that channel.  The general economic recovery, rationalization of excess inventories, and the sample sites’ own popularity growth (thus increased inventory needs) are further pushing everything in this direction.
  • Brands want to keep careful control over their participation in this channel, which means limiting the number of sites they work with.
  • Suzanne from Kate Spade said that this channel has not taken a big bite out of its full-price customer base.
  • The sample-sale efforts of publishing/media sites have been of mixed success (and also create conflicts with their premium advertisers).

I believe that as the economy recovers, affluent buyers will return to higher-end retail stores for two reasons: deal fatigue will set in, and a quality shadow is going to lurk over the sample sale channel just as it does at outlet stores.

Apar of MyNines, who knows a lot more about the sector than I do, is optimistic that many sample sale sites can thrive. She believes that we’ll see niche sites of all kinds, and indeed one of the panelists even mentioned a sample sale site for city apartments.  However, within apparel and accessories, I’ve been talking to a lot of knowledgeable people who believe that a wave of consolidation/failure is coming for the smaller players.

I came away from the event thinking that the companies who should fear the rising force of Gilt Groupe are not the high-end retailers but rather other discount players, both online and offline, who might not have the sheer scale needed to withstand assault and who are not innovating at the same pace.

Update: I was reminded about another interesting point that came up during the panel – from Steve Hafner of Kayak who was talking about the pressure Jetsetter is putting on them, much of which he attributes to excellent photography and presentation.