Posts Tagged ‘Internet’

Recession has lead to several new business models and growth opportunities. That is the beauty of economic changes – there is innovation and new business models come about.

I subscribe to several invitation-based sites. They are supposed to be invitation-only, but popular blogs have their own invites for readers. GiltIdeeliRue La LaHaute LookBeyond the RackBillion Dollar BabesThe Top Secret, and Modnique. All these sites sell designer brands at discount prices. The benefit to designer brands is that they can get rid of previous season’s excess inventory without having to dilute their brand by making discounted prices available only through select sites. The sites do an excellent job of bringing less known brands to customers. I have come across several new brands and discovered gorgeous fashion. The sites purchase products and re-sell them, so it requires capital investment and strong partnerships with good brands that encourage customers to sign up. But capital investment is relatively lower because it is primarily online, and just has one store to manage without hefty real estate charges.

Gilt is my favorite – I love its photography, and the look and feel of the site and products. However, I have never made a purchase through Gilt – for one, products sell out quickly; two, it is higher end than other brands. Its extremely innovative though and has branched out into men, home, kids, travel, and now city-related. I am curious to see what more is in store (pun intended!).

I have purchased from Ideeli, Rue La La, and Billion Dollar Babes. I don’t like paying for shipping, but all these sites charge a hefty shipping rate. Being in retail, I know that all shipping charges have a profit margin included. Its not fair to the customer. In addition, shipping rates do not vary by the size of the package. Rue La La charges almost $10 for shipping – wonder how much margin that has!

Ideeli is running a campaign with MasterCard – the site links to a MasterCard marketplace and if you make a purchase using MasterCard you can get upgraded to the 1st Row for 1 month at no extra charge. Quite innovative! I think usually upgrading to the 1st row comes at a price. Sales are first made available to 1st row members, and 2nd row members have low priority.

Rue La La has been experimenting with gorgeous photography. I particularly love the items with tropical blue background – they used that for summer items, and I felt the ocean and beach calling me just by looking at the gorgeous photography.

Beyond the Rack is my least favorite site. It is too “rock & roll”, and I am sure appeals to a certain set of customers.

Gilt launched Gilt Fuse last year and I saw paid search ads for that as well. It catered to a younger audience. However, you could find the same sales on Gilt Women and more, and Fuse was just a subset of Gilt Women. I am not sure what the business idea was especially since Fuse was just a subset, but it was closed down this year since apparently other customers felt like I did, that having Fuse separately did not make sense. I have been reading that Gilt sells through its mobile app as well, and customers actually make a purchase on their phones. One of my favorite blogs, nymag.com, did a write-up about how Gilt included selected customers in a “special program” if customers spent a certain amount on their site. (I don’t recall details). Customers wrote comments that Gilt was misleading its customers; they did not spend that much and yet were included in that special program. Ha… welcome to the age of the Internet!

In terms of marketing, the sites cannot use the traditional forms of direct marketing. You cannot run paid search and affiliate programs for sites that are invitation-based. You can run behavioral targeting and retargeting ads, as well as online advertising campaigns. The big focus, however, is on PR – blogs, social networks, partnerships, innovation, diversification, and working closely with brands to find the right product mix.

Are these sites in it for the long run? Yes, I think so. But I also see these sites as becoming “commoditized”. I see sales run on two different sites for the same brand, IN THE SAME WEEK! So Sweet Pea’s cute floral mesh tops were available on Ideeli early this week and I actually bought one top; today the same brand is running its sale on Rue La La. The products are different though – for now. You can’t blame the brands though – clearly they are trying to find the right partner, and want to diversify. But what does this imply for these sites? I enjoy following these sites, and am curious to see how many more will jump in to make money while the industry is still lucrative, and how long it will take for the industry to mature.

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Yesterday AM and I were surfing for the top sites on the Internet and came across very interesting statistics. Of course Google had to be # 1 – no one can come close, not even Facebook. Yahoo #2, YouTube #3, Facebook #4. East Asia uses the Internet the most – of course a population of over 1 billion in China helps. My favorite site is Amazon.com – the company can do no wrong in my eyes. It is the perfect example of a site done very well, and completely customized for the user. One month Amazon is the #1 retail site, and the next Ebay.

I really like that Amazon has started streaming/renting movies as well – I cannot wait for their collection to increase. I get all music downloads from Amazon now. I don’t like iTunes at all and Amazon will give it a run for its money.

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How shall I tell thee of the inefficiencies of Time Warner Cable? Did the MBA degrees from Ivy Leagues amount to nothing that the management is so dumb? Will TWC be another company swallowed by recession due to inability to handle size and inefficiencies?

I wanted cable installed in my new apartment, and scheduled an appointment with TWC for 6-9pm. Its amazing how every time I schedule any appointment with companies, servicemen come at the last minute. So the TWC guy came at 9pm exact. There was some issue with cable in one room, so I asked him to walk across into another room and install it there. But he could not do that because the instructions did not say so. I called the company but they would not budge. They asked me to reschedule. Such a bunch of morons running the company! I have heard from others how TWC would rather you reschedule than add to/remove from instructions. They probably end up paying a lot of money on customer service calls and servicemen. In India, I would just put a Rs. 100 note in the guy’s hand and he would do the needful. Not so here. I have been using TWC for years, but maybe its time for a change. I had sworn off Verizon due to their crappy service 5 years back, but maybe its time to reconsider since Verizon is the best.

Two years back my Internet service went caput. I called to schedule a service, but TWC could not send someone for a week!!! If there is one thing I cannot live without, its the Internet, and I am not the only one. In a recent study, Internet is the last thing people would give up in recession. Anyway,I tried really really hard to get TWC to send someone earlier. I spoke to the supervisor and called several times to speak with different people in the hope that someone would have mercy. Embarrassingly enough, I even pretend-cried on the phone saying that I needed to work from home, to no avail. I am sure they must be used to people acting crazy on the phone – people have admitted as much on forums about crying for TWC to resolve Internet issues at the earliest. To TWC’s credit, I have not had any more repair issues in five years – I hope I did not jinx it!

I subscribed to T1 at Starbucks and used Internet there till I got my service. Its kind of silly but I cannot spend a single day without the Internet. The only time I can do without is when I am in India, where it takes ages for pages to load unless I use it early in the morning. I am from a small town and my parents rarely access the Internet, so service sucks.

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