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What are Flash Sales? Vente Privée Business Case

Every promotion has the function of making the client feel exclusive: “I can access a product at a lower price than all the others”. This is the thought we all have when we are “tempted” by a different price than usual.

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Every promotion has the function of making the client feel exclusive: “I can access a product at a lower price than all the others”. This is the thought we all have when we are “tempted” by a different price than usual.

For the promotion to work, it is not only necessary that the price is lower than usual, but to access that price you must hurry: all promotions should have limited units for a limited time. This is what I call “double assurance” in the promotion so that it really works.

What is a promotion

After all, a promotion is nothing more than transmitting the “sensation of scarcity” in both product and time; in other words “either buy it now or the train passes”. As simple as that.

 What are flash sales?

Based on all the above, the appearance of the Internet and its consequent possibilities, originated the phenomenon of the so-called “flash sales”.

“A flash sale is a promotional sale that occurs in a limited space of time. That is to say, it is a commercial mechanism that relies on the “compulsive purchase” before an offer that will only exist during a more or less brief period of time. The system of flash sales channels is similar to “club” in which subscribers receive promotions on a regular basis.”

It is clear that the compulsive phenomenon is the essential in this type of sales. They are mostly directed to Fashion Victims or to inveterate travelers who dream of finding scandalously low prices for their dreamy getaways. But what are the characteristics of flash sales?

Characteristics of flash sales

Luz Bouza, (smarttravel.news, 2017), points out the following characteristics so that flash sales really work:

  • They must have significant discounts that are practically impossible to achieve on a website other than the one the user is a registered member of. Hence the exclusivity.
  • The discounts must always be for a limited time. In fact, the usual thing is that there is a “countdown” counter, which shows that the offer or promotion is coming to an end. This multiplies the possibilities of sale.
  • Sending a newsletter where the offers with direct links to the purchase of star products appear, many times personalized for the client based on their previous purchase experience.
  • Obligation to register on the web, both to enjoy the offers and -in occasions- access to contents or premium products or outlet
  • A customer service strategy, based on closeness and rapid response and problem solving.
  • “Member get Member” access system, which increases the feeling of exclusivity, since you can only access that shopping club by invitation.

The case of vente privée

In 2001, Vente Privée began its journey. As Luz Bouza points out:

“The business model of private sales or flash sales was born at a time of global economic crisis, where the final public is looking for discounted prices.”

The strategy since then has been the growth of the company gaining market share through the purchase of its main competitors. It is true that after a timid entry full of obstacles in the American market, Vente Privée has focused on the European market where it has bought companies such as the Spanish Privalia or the Polish zlotewyprzedaze.pl.

In the case of Privalia, as Marta Galtés of La Vanguardia points out: “the initial negotiations focused on a sale by which some Privalia investors would have received shares of Vente Privée in exchange.

However, the operation has been redesigned and finally Vente Privée would have acquired all Privalia and paid in cash. The General Atlantic and Sofina funds were the majority, in addition to Nauta, Caixa Capital Risc, Highland, Insight, Index and the co-founders Carné and Villanueva.

As regards zlotewyprzedaze.pl., Álvaro Gutierrez of ecommerce-news.es, indicates that with the acquisition of zlotewyprzedaze.pl, vente-privee accelerated its growth in Central-Eastern Europe.

The website, based in Warsaw, is considered a key player in the flash sales industry in Poland. This movement represents a strategic location for the Group vente-privee due to the size of this market and the attractiveness of the brands.

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