Social Commerce

Private Shopping Clubs – Critical Success Factors

From a revenue-generating perspective, Private Shopping Clubs (also known as sample/flash sale (event) sites) are the big success story in social commerce right now (Vente-Privée $1bn+, Gilt $400M+).

Marc Osofsky, ex-McKinsey VP of marketing for e-commerce specialists Optaros has posted a useful review of these member-only shopping clubs where members get access to exclusive online sale events, identifying what makes them work.

With popular e-commerce software such as Magento offering private shopping club modules (video walk-through), private shopping clubs are relatively easy to deploy.  So here’s a top line summary of Marc’s review, listing the critical success factors for setting up a successful private shopping club.

Key Features

  • Exclusivity – Invite-only (requires an invitation from a friend to get in)
  • Name Brands – quality merchandise not just cheap or out of date items
  • Compelling Discounts – priced to drive impulse purchases and loyalty
  • Timed Events – limited sales event at which the merchandise is offered until it sells out or a time limit is reached
  • Regular Events – Sales events always start at the same time
  • One Page Event List – Listing current events to browse
  • Viral Invitations – member get member referral program ($10 reward per new (purchasing) member
  • Social Network Integration (e.g. Facebook Connect/Twitter) easy login and member referrals
  • No Site Search – Focus attention on browsing sale items to encourage impulse purchase (allow filter)
  • Single/No Shipping Fee – Orders stay open for several hours to allow shoppers to make additional purchases and pay only one shipping fee (or additional orders are advertised as having free shipping)

Future Features

  • Fashion Content (Editorial/Articles) – influencing shoppers through richer content around the products on sale.
  • VIP Members – Special club for most valuable members (who have invited groups of people that buy the most) with extra discounts and incentives.
  • Customer Idea Communities – for ideas on future sale events and site improvements
  • Crowd Visualization – visial representation of shopping crowd at beginning of the events to stimulate impulse pruchases
  • Social Analytics – social recommender systems that up-sell and cross-sell based on purchases/browsing patterns of “people like you” (similarity in purchasing history/tastes/social graph)

Chartered psychologist specialising in consumer behaviour, wellbeing and technology. Certified CX professional experienced in Design Thinking. A researcher, writer and speaker, Paul is head of Digital Insight at SYZYGY.

9 Comments Add New Comment

  1. I cherished what you’ve got performed here. The format is stylish, your written material elegant. Nonetheless, you’ve got obtained an edginess to what you’ll be providing the next. Ill unquestionably occur back once again but again in your superb deal significantly far more should you guard this up. Dont do away with hope if not at the same time quite a few males and women see your imaginative and prescient vision, know it is possible to have attained a fan appropriate the subsequent who beliefs what you possibly can have received to say plus the way you’ve got presented by yourself. Quite superior on you!

  2. Great Information.

    How does this business model make money? What percentage is the private shopping club taking from the sale of items.

    Thanks

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