Flash-sales slump, but there is life after acquisition
In an ironic twist of fate, many of the once popular flash-sale sites are being acquired at deeply discounted prices; a trend clearly seen in the recent news that Hudson’s Bay, parent company of Saks Fifth Avenue, plans to acquire the Gilt Groupe for $250 million dollars, a fraction of their once $1 billion-dollar valuation.
Is there retail life after acquisition? Potentially. Data from Slice Intelligence shows that recently acquired flash sites are the only ones that have grown over the past year. Hautelook, acquired by Nordstrom, grew revenue by 39 percent and Zulily, which was snatched up by QVC, grew by 19 percent. Gilt is well-positioned to succeed with Saks' due to its high spend per customer and millennial demographic, whose buying power will only increase as they age.
Attracting new customers has been a problem for the vast majority flash-sale sites. These retailers are more dependent on purchases of existing members––who are spending more money, and ordering more frequently, on sites like Gilt and Rue La La.
One Kings Lane has suffered the most, declining by 68 percent since 2014. Could an acquisition reverse the furniture retailer's fortunes? Since being acquired, both Hautelook and Zulilly are gained new customers. And those customers are spending more Zulily shoppers spent $15 dollars more per person, and Hautelook customers spent $32 dollars more over the last year.
The silver lining of the Gilt acquisition
Among Saks' shoppers who buy from flash-sale sites, 18 percent of dollars are spent with Gilt, a good fit indeed. Gilt Groupe also offers the opportunity for Saks' to get in front of more millennials and men. Over 34 percent of Gilt shoppers are under the age of 35 compared to only 27 percent of Saks', and 37 percent are male.
Gilt's shoppers also spend more on their site compared to their competitors. Shoppers who buy products with Gilt are spending, on average, $655.00 with the company. In contrast, HautLook's shoppers only spend $334.00, which is still $70.00 dollars more than Zuliliy.
About this data
With a panel of over three million online shoppers, Slice Intelligence gives the most detailed, and accurate digital commerce data available, and is reported daily.
Slice Intelligence is the only service to measure digital commerce directly from the consumer, across all retailers, at the item level, and over time. Our retailer-independent methodology precisely measures commerce as it happens. By extracting detailed information from hundreds of millions of aggregated and anonymized e-receipts, Slice can map the entire Purchase Graph, connecting each and every consumer to all their purchases.
Slice gets its data from e-receipts – not a browser, app or software installed by the end-user – so its measurement reflects comprehensive shopping behavior across multiple devices, over time which are key in an increasingly omnichannel retail world.