A fresh take on shopping clubs
brandsExclusive – A fresh take on shopping clubs
A few months ago I had the opportunity to chat with Daniel Jarosch, Co founder and managing director of brandsExclusive, one of the more prominent invitation only websites that offers branded products at reduced prices for limited periods. Armed with Business degrees from the
Pure play online retailers always have something unique, it’s normally a concept, idea or methodology (or combination of all three) that brings about the success of the business. This unique “thing” leverages itself so brilliantly that it enables the website to be so successful. DealsDirect.com.au relies on a broad category base and large inventory to continuously attract its customer, its slogan, “Love a bargain”. Catchoftheday.com.au leverages the concept of social shopping by having a community of members that go crazy for a different offering each day of the week. One deal, mid day, every day is the Catchof theDay slogan, and their unique selling proposition. Get the picture! So, what is it about brandsExclusive.com.au that makes it shine above its competitors?
In 2008 after noticing one of the category makers appearing in Germany Daniel and business partner Rolf Weber began researching the options of replicating the success of the French buying club website vente-privee.com, which had spread to Spain, United Kingdom, Germany and Italy.
brandsExclusive is a flash sales platform that offers fashion and lifestyle brands at discounts of up to 70% off RRP. brandsExclusive works different to a normal online store that has a permanent stock at any given time. Sales at brandsExclusive only last 2-3 days per brand or until sold out. Every day brandsExclusive launches 10 new sales and announced by a personal daily email. “We bring the shop window to the inbox of our members” Says Daniel Jarosch
The original brandsExclusive platform has been developed together with markafoni.com, a Turkish shopping club that followed the success of Vente-Prevee. brandsExclusive, is a standalone business in Australia, and has the same shareholders that hold interests in 12 other shopping clubs world wide (e.g. beyondtherack.com in Canada, markfoni.com in Turkey, fashionandyou.com in India or brandsclub.com in Brazil to name a few). The logic here is that each business has access to the other’s knowledge base and intellectual property skills, and more importantly economies of scale. An example of this is the iPhone application. Common resources were used to create this application.
“brandsExclusive is also a extremely powerful marketing channel for brands” says Daniel “Recent survey data* shows that if users miss out on a sale, 63% still go out to a store to buy the item they saw online. Our campaigns create brand and product awareness which drives people into stores“Daniel further alludes to the fact that shopping clubs like brandsExclusive are demand stimulating, and retail shops are demand satisfying. “We can facilitate the sale of other products but will channel these off elsewhere at this point” says Daniel. “We are also looking at brands from overseas that are not licensed in Australia (so there is no licence conflict).” To further explain the business model, Daniel suggests he has a strong team of buyers that know the apparel market. “We have buyers that have had experience at some of Australia’s biggest national retailers. They are experienced, understand the needs of our suppliers and make sure we are our brands best friends”. Daniel also points out that they tailor every campaign to the needs of the brand. Some promotions/brands would have less discount. brandsExclusive will also only advertise the brand externally if the brand wants to push its product, otherwise they will not advertise. Retailers know that limited stocks promoted on brandsExclusive will stimulate demand of their product in store and via other traditional online retailing channels.
At the moment, the number of promotional campaigns is increasing and product ranges are a mix of end of season items as well as current items, which are still considered to be the best deal!
On Fulfilment and customer service; there is occasional drop shipping done for very special products like Furniture, BBQs or TV. However brandsExclusive prefers to own the end to end customer experience 100%. Part of this customer experience is the fact the brandsExclusive offers a full refund (no gift vouchers or credit notes) to allay fear of buying online.
Brand Exclusive has 480,000 members at time of writing and there is a forecast 15,000 new sign ups a month with a target in the near future of 900,000 members.
On technology and hosting; SEO is not that important due to the regular change in products. The site uses Adobe Air, Python and Django Technology. The site is regularly stress tested. The architecture is extremely critical in that it must not fall over. At the time of the interview, the site was hosted in Istanbul and this has now been moved to Macquarie data centre in Sydney.
brandsExclusive has managed to grow it’s membership base very rapidly. The successful European concept has proven itself in Australia’s fickle and relatively immature online retailing industry. Suppliers in Australia have been very reserved about supplying online retailers with branded goods as their traditional bricks and mortar customers express concern about competing with discounters online. As products for sale on brandsExclusive are not visible to the public unless a person is invited to become a member, this has been a cautious yet successful opportunity for suppliers to distribute some of their branded good through this shopping club concept.
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*We have conducted a survey with 1000 users and the result have again proven what we heard from international benchmarks.