Here I just want to list the most important advantages that companies can obtain using this type of online sales:

1. It’s a strategy that allows quick and profitable monetization of stocks: the margins, in fact, are quite high, certainly higher than those achievable by other methods of management of stocks

2. Opportunity to reach a greater amount of consumers that don’t have the possibility to buy the specific product through the usual channels. In fact there are consumers that have difficulty in finding designer clothes or luxury brands or just find them at higher prices.

3. No overlap with the traditional distribution network, thanks to the very short duration of the campaign without damaging the image of the brand.

4. Attention on the creation of a strong relationship with the final consumers. The major players in the industry invest a lot in the creation of trailers and shooting of the products that are offered online: websites are usually pleasant, friendly, accessible, engaging, highly interactive, designed for a sophisticated and demanding audience.

5. Mailing list:  this websites have devoted much effort in collecting a mailing list, even if all the e-tailer insist on the importance of “word of mouth. Who is invited by those who have already tried the service or by companies affiliated with the service (Born4Shop, for example, can count on partners such CartaSi, Fastweb, Sole24Ore, TicketOne, RCS, Gay.it) enters for free. Other website, such as Piustyle.com charges an amount of 15 euros on the first purchase. By contrary, to feed the crowd to its site, Privalia focuses on activities of viral marketing on the web through games and competitions that can capture the interest of the people of the Net: this strategy has allowed to intercept about 40 thousand new members. Currently, one third of the Privalia’s community comes from the “member get member”,that rewards those that have invited other potential buyers. The concept of “community” is central to this E-Business, so that some operators have even created their own blogs.

6. Creation of blogs: this tool has the aim of establishing direct contact with members and increases the transparency of services and operation of the portal. Every visitor has the possibility to voice his views and suggestions and sharing them with other members and with the company.

The strategy used by websites like BuyVip and Privalia is simple: they send a warning e-mail in advance to the potential buyer (consumer that has already subscribed himself to the website). They advise that the next   day at a specific hour they will begin selling a set of proposals brands (very famous brands) at a discount, ranging from 30 to 70%, since these inventories may be part of a previous season. The short duration of offers, from a minimum of two to a maximum of five days, along with the discount benefit, play a decisive role stimulating emotional purchase and impulse: you can buy the object of desire just with a click of the mouse, and within ten days the merchandise you bought will come to your home. The product, in fact, is taken directly from the supplier (this also allows considerable savings for the client), conveyed in the stores of the website, packaged and then shipped by courier.

There are many players in this emerging market in Italy. First real national pioneers as Born4Shop and SaldiPrivati or Piustyle.com (launched by an entrepreneur with a long experience in managing inventories of branded collections and active also in Spain and Belgium). Second other players already established in other counties that are trying to replicate their strategy in Italy. This is the case of a giant like Vente-privee.com (510 million euros in turnover 2008), but also names like BuyVip or Privalia. There are of course many other players but I think they are currently too many for a market so small, specialized and relatively undeveloped like the Italian one.

What do you think?