Things could be going better for flash sale sites: “It’s a classic case of investors and entrepreneurs not really understanding how an industry operates.” [The Verge]
How are we supposed to know if Netflix’s expensive original TV show, “House of Cards,” is a hit or a miss? Good question. [Vulture]
Twitter was mentioned in 50 percent of Super Bowl commercials. That’s a lot of free advertising. [Marketing Land]
Speaking of: Did Oreo have some poor designer on call last night? Because when the lights went out halfway through the game, the company’s Twitter team was ready with an appropriate ad. [BuzzFeed]
Generally speaking, Twitter users went bonkers during the blackout. That’s when tweets for the event peaked, at 231,500 per minute, most of them terrible jokes about Bane. [CNET]
Former CNET staffer Greg Sandoval, who left out of concern over interference from corporate overlord CBS, has landed at the Verge, the site that broke the news of Mr. Sandoval’s departure. [New York]
Lot 18, the troubled New York-based wine sales marketplace, has booted another batch of staffers. AllThingsD broke the news that the company laid off 25 employees this morning, cutting approximately 35 percent of its staff. This brings the total employees to 46, about half as many as it boasted just a year ago.
Around 4 p.m. on a recent Thursday, all but 14 of the employees of the members-only luxury e-commerce site Lot18 got an email asking them to report to the new conference room for an urgent meeting. The remaining employees, including the vice president of operations and director of operations, received an almost-identical note but were asked to report to the “alt” conference room instead. They were told they were being let go, asked to leave the building immediately and instructed to return on Saturday to clean out their desks.
The survivors were shocked by the layoffs, which came a day earlier than planned due to inquiries by Betabeat. Lot18, which started with private sales for wine before moving into full-price wine and epicurean deals, has raised a total of $44.5 million from investors—its latest round spearheaded in November by the highly regarded Accel Partners. Lot18 also moved into a new office over the summer that features a tasting room, mounted LCD screens that pop up a buyer’s location on a map every time Lot18 sells a bottle and a permanent DJ booth. In its one-year existence, Lot18 launched several new verticals, bought Paris-based e-commerce site Vinobest, and announced a foray into Europe.
To industry insiders, the scenario sounded familiar. Mass flash sales—deep discounts that expire usually after one to three days—had been touted as the first real innovation in e-commerce in years, and start-ups that applied the flash-sales phenomenon to the luxury market had investors salivating. But the former venture capital darlings suddenly seemed to be hemorrhaging employees. Earlier this month, another site, Boston-based Rue La La, slashed 60 of its 550 employees after months of growth.
Suddenly, the question is being asked: Could flash sales for the well-to-do wind up being more of a marketing gimmick than a business model?
Come And Knock On Our Door
You know Gilt Groupe is in overdrive mode when even its verticals are diversifying.
Jetsetter, the travel site Gilt Groupe founded in 2009, must have liked the looks of Airbnb’s numbers, since it just launched its own foray into the vacation home rentals market with Jetsetter Homes. As The Next Web notes, Homes starts off with collection of 200 curated and verified villas in exotic international locales. Since this is Gilt we’re talking about, the pricing is “exclusive,” with some options offered in the company’s customary flash sale style, depending on availability. Although in the case of these homes, we imagine the scarcity is more than just manufactured.
Clicks no Mortar
New York based e-tailer ideeli was just picked as the fastest-growing company on Inc Magazine’s annual 500 List, with an eye popping three years sales growth of 40,882 percent. Of course, if you looked at Betabeat’s traffic growth since we started back in March, we could claim a pretty impressive 300,000 percent growth, but hey, it’s all relative. Since Silicon Alley is home to both ideeli and Gilt Groupe, which pioneered the online flash sale, we wanted to chat with ideeli CEO Paul Hurley and get his take on how this rapidly evolving industry will look a year from now.
Kevin Ryan may be moving away from the flash sites that put Gilt Groupe on the map, but the sales device seems to be working just fine for Fab.com. After a smooth landing on a successful
triple pivot [Ed Note: our bad, original idea plus two pivots does not equal three!]–from a daily deals site for gay men called Fabulis, to a flash sales sites for gay men, to a flash site for design for everyone, regardless of gender or sexuality–GigaOm reports that Fab.com has grown 800 percent since May. It’s only been ten weeks, but the site is already approaching the 500,000 user mark. The key, according to CEO Jason Goldberg, lies in part with a little feature they like to call the “inspiration wall.”
New York has two of the biggest players in the flash sale sector, Gilt Groupe and Ideeli, both of which are growing fast and aiming at shoppers interested in bargains on high end designers.
Today Ideeli announced a $41 million raise, led by Next World Capital, nearly doubling the money they have raised so far. It plans to use the funds to, “Support its phenomenal growth trajectory through a variety of new initiatives, including category expansions, partnerships, technology enhancements, marketing campaigns, attracting key talent and enhancing the ideeli member experience.”
The new cash is about half of the roughly $80-100 million Gilt Groupe was rumored to have brought in during a raise this February.