Vente-Privee

Sales are all over France now a day, and the next one most probably will be in August. The French government allows retailers to offer sales twice a year only, as well as, they allowed retailers to have private sales for their best clients only. Does that mean customers’ chances of having sales on their favorite products are very limited? I don’t think so, not when a web site like vent-privee.com is there!!!

Describing the business
“Vente-privee” means private sale in French. Vent-privee.com web site was founded in 2001 and it is offering a whole year around sale for its members. It is a private club that organizes on-line sales for it members at big discounts that reaches 30% to 70% on various types of products lines. The company has successfully persuaded luxury brands that they can create the desirable presentation for their goods online. Recently, the business model expanded into near-luxury and other non-luxury prestige brands. These products will be available only for limited time, which helps from my point of view to maintain the sense of scarcity needed especially to the luxury brands.

The company has used a unique approach to sale the merchandises as it hires models, make-up artist, hairdressers and photographers to produce daily fashion shots and videos featuring their exclusive products, as well as using original music that add a glow to the merchandises. The company as well employs a team of journalists to put out its own glossy fashion magazine, called Rosebuzz that is distributed to 50,000 top customers. Add to that, the company has a recording studio where the music for their advertising is created.

Members can scroll through the up-coming sale items and sign up for the product’s sale they are interested in, and accordingly, they will receive an e-mail notification to access the sale on the date specified or when the sale begins.

The membership of vente-privee.com is absolutely free, but you can get access to the web site only through invitation or by referring to an existing member.

This business model solves a problem for the following:

The consumers
Consumers benefit out of the discount offered on top quality brands. Also, acquiring the membership through invitation can create an environment that appears exclusive and special which appeals to a certain group of customers.

The retailers/suppliers:
It helps them to get rid of their surplus stocks, especially for the designer’s labels who want to maintain the exclusivity by reaching most probably a new promising market over the web.

Partner
By investing in a successful company, and helping it to expand into new geographic markets.

The web site publisher
The idea of offering discounted products is not unique but what makes it different in case of vent-privee.com is that the company was able to persuade big luxury brands names to participate and offer their products through the web site, not only that, they were able to gain their trust by presenting their products in a very prestigious way, exactly as the retailers were aiming for. Thus, vente-privee stands for a better chance than others to gain access to more luxurious brands that have always existed offline.

Customer groups served descriptions
Vente-privee.com customers are most probably really found of fashion and luxurious brands but cannot afford its prices during the normal season retail. They could be as well, the type who likes to be distinguished and circle themselves among groups who share them the same lifestyle and interest. Vente-privee does offer those customers this feeling by the exclusivity of their membership and the private invitation they receive.

Source of revenue
The sources of revenue for vente-privee varies as following:

• The profit margin of 20%-40% per sale of every item.
• Sells of CD of that contains the tracks of the web site advertisement.
• I am not sure if the magazine is sent complementary to their top customers, but if its not, then magazine sale could be a source of revenue.

Two web-sites that are using the same business model
The following two sites found using the same business model:

• Ideeli.com is an on-line shopping site that aims to attract luxury brands by allowing a select group of customers through its virtual red rope. Members can go through the upcoming sale items in the preview section, but in an effort to further elevate the excitement, the site keeps sale start times secret. Those who sigh up for the free membership, receive email notifications when sales begin, and for $7.99 per month, the premium members receive sale notification via cell phone text message and are granted access to sales an hour early. (http://www.ideeli.com)

• brands4friends.com is a closed community web shop. The company is selling brands at relatively low prices over the web. They are aiming for customers’ loyalty and are in direct contact with their customers. They focus on impulse shopping. The company offers up to 70% discount under the motto of “brands at budget friendly prices”. (http://www.brands4friends.com)

Is the business model unique to the web?
This business model has been applied long time off-line, so it is not exclusive to the web only. Most of the retailers are offering their surplus stocks or items that have not been sold during the season at a discount. Also, discounted products can be found in the following places:
• Factory outlets
• Liquidation stores

Sustainability and Scalability of the model
The model is sustainable because overstock is unavoidable especially in manufactured goods. Add to that, fashions misses, production planning mistakes and unexpected weather, all have contributed positively to the oversupply of products.

The model as well is scalable, because it can be applied to different sectors, like travel and tourism businesses. The same concept could be applied as the following example:

Say we have created a site called www.voyageprivee.com where only selective members are invited based on certain profile criteria’s. Special holiday’s offers could be reviewed from the web site for limited periods of time. The idea can be escalated and varieties of services could be designed to exceed the members’ expectation.

If i were the owner of the business, i will do the following:

1. Increase users or customers
I will keep the same strategy of choosing a selective customers but an invitation could be extended to more carefully selected people that their profile would meet certain criteria that is agreed on. I believe exclusivity is a very important feature in such kind of business, and that how the business model is distinguished from other types of web discounted products.

2. Expand revenue sources
The following are my recommendations:
• Life fashion show could be arranged sometimes, where their will be direct contact with the company’s exclusive top customers. It will be a social gathering to get some valid suggestions from the customers.
• A premium customer can be added to the web-site facility. Those who would like to be a premium customer should be certain fees monthly. In return, customized services could be designed for them, for example, LV bags lovers can have more timely information about the brand’s discount and an earlier access to the sale.
• A service like D&D could be introduced. It means describe and demand service. Client can post their say favorite bag descriptions and ask the site to fetch the closet branded bag that matches their demand. This service could be for a fee.
• A service like “be the first” could be introduced, where clients are given tips and advices on the latest fashion trends with the recommendation of the right outfits and accessories. All the recommendations will be passed to customers after receiving their photos which should be clear or a video that shows how they look like exactly. This service could be for a fee.
• A personalized gift delivery service could be established for a fee. For example, a gift during Valentine day could be sent with lots of heart shape balloons and a song performed by few singers assigned to do so. All for a fee.