SIME Talks Season 2, Episode 4: Understanding the private shopping club space with Brands4Friends

Private shopping clubs have become extremely popular of late. Inspired by the likes of Vente Privee , Guilt Groupe and BuyVIP, it is a closed community where end-of-sale branded goods and unsold inventory are sold at 30-70% discount to the members of the community.

E-Commerce with a twist

Called E-commerce with a twist, private shopping has caught on like a wild fire, bringing scores of consumers to sign up with their details to receive alerts when a particular sale of a branded good happens. Typically the sale lasts for around 72 hours by which the consumer should make up his / her mind and then make a purchase of the item. Else, of course he / she misses the sale.

What makes it different from plain old vanilla e-commerce?

- For a start, it is exclusively branded goods only at 70% retail. May be not the branded goods in vogue at the moment, but still a Gucci is a Gucci.
- It is exclusive, meaning, only community members can invite community members – like how Gmail was when it started out for instance.
- More brand loyalty since consumers more or less like a platform and wait for branded sales to happen

It has inspired new niches such as exclusive house designer private shopping club such as One King’s Lane and a lot of clones across different countries, with each country in for instance Europe having their version of the Vente Privee. Of course the barrier to entry is tremendously low since its the location and the accessibility that counts as much
Read Tech Crunch’s coverage on One Kings Lane

Private Shopping clubs

Although most private shopping clubs are actually private (yeah wtf), some communities have decided to strike the private part off, and stick to branded shopping clubs alone. For instance, Brands4Friends, backed by Mangrove Capital Partners is an open community that allows people to find and track branded sales and be part of the group to exercise their purchasing power. May be a bit of a brand conflict when it comes to keeping branded items accessible to everyone at 70% the rates, yet it is still interesting as the concept reaches critical mass faster and comes to a saturation where the best deals are given at better rates – consumerism at its best

For our European friends, here is a list of some private shopping clubs in your country or the one closest to you:

Germany: Brands4Friends, Pauldirekt
France: Vente Privee
Russia: KupiVIP
Spain: BuyVIP
UK: Brand Alley
USA: Gilt Groupe, Ideeli, Hautelook

From http://www.guiltylook.com/ is a chart below:

SIME Talks with Brands4Friends (Germany), CEO

So, with some basic understanding of the Private Shopping Club space, lets head to the SIME Talks for this week – featuring the CEO of Brands4Friends who talks about Brands4Friends, 2-3 year plan, business model and his plans. Thanks 23Business for producing this video.

Christian Heitmeyer about brands4friends at SIME Stockholm 2009 from 23tv.de on Vimeo.

Read about Brands4Friends Expansion into the UK

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