In a world that is rapidly developing new technology and innovations such as smartphones, tablets, and almost all things digital it would only seem appropriate that this type of technology would make its way into the retail industry; and that is in fact exactly what happened. In a recent article by The Wall Street Journal titled, “Nordstrom Joins Fray, Buys ‘Flash Sale’ Site”, Rachel Dodes discusses this radical new development and states that “the deal marks the first acquisition of a flash-sale company by a mainstream retailer. It comes as chains are working to expand their online presence” (Dodes). In an effort to boost sales and further immerse themselves in the business of online shopping, Nordstrom Inc. chose to buy out HauteLook Inc, an already successful company in this “flash sale” market, for an estimated $270 million in stock (Dodes).
For those who may not be familiar with this term “flash sales”, they are “the latest business byword in the American e-retail sector. In fact Flash Sales is touted by both buyers and sellers as the easiest method to off-source stocks. . .Simply put, flash sales are a time-limited offer of high discounts. The system is a win-win for both retailers and consumers: retailers can build brand loyalty and at the same time, well, sell surplus stock within a short span of time” (Grenword). The idea behind this type of sale or business is an excellent way for retail companies to sell off excess products or other items that simply need to be sold. This type of sale is also a great way for companies to draw customers into their site and is an overall strategic marketing campaign.
Nordstrom chose to allow HauteLook to run independent and not integrate them into the already existing online site for Nordstrom. This was most likely due to HauteLooks existing stellar reputation, which roughly secured 3.1 million visits in the U.S. in the last month and places HauteLook in second in popularity among flash sale sites overall (Dodes).
In a retail business perspective, I find this news to be an excellent idea for Nordstrom and certainly major steps in the right direction for their developing online presence. If one actually thinks about the concept behind “flash sales” it is easy to see its widespread appeal and vast benefits for any online company with merchandise that they are eager to sell. This technology has great potential for Nordstrom and this step into the “flash sale” world demonstrates how willing this company is to meet its customers needs and as a result boost sales. President Jamie Nordstrom stated that “‘if customers are telling us they want to use technology to shop, then we have to be competent at that’” (Martinez). Also important about this buy-out was that Nordstrom understood that it would be too costly and time consuming to develop their own flash sale site and therefore purchasing HauteLook allowed for a much smoother and quicker entrance into this market.
As a consumer and someone familiar with online shopping, I have to say that I have not yet been involved in a “flash sale”. However after coming to learn a good deal about them and understanding that its basically a win-win overall, good for both customer and company, I could easily find myself purchasing items from a “flash sale”. And even better to know is that these “flash sales” are not limited to just retailer stores; many electronics, travel packages, and other great items are almost always available for sale on other “flash sales” sites.
Work Cited
Dodes, Rachel “Nordstrom Joins Fray, Buys ‘Flash Sale’ Site.” The Wall Street Journal. 22 Feb. 2011
Grenword, Amanda. “What is Flash Sale? The New Business Mantra.” Hubpages. 22 Feb. 2011
http://hubpages.com/hub/What-is-Flash-Sale-The-New-Business-Mantra>
Martinez, Amy. “Nordstrom to buy flash-sale website HauteLook.” The Seattle Times. 22 Feb 2011
http://seattletimes.nwsource.com/html/businesstechnology/ 2014255945_nordstrom18.html>
Watching technological development in the retail industry proves how far-reaching advances in technology are. Companies are finding other ways to use technology to add value to their companies, rather then just bettering their manufacturing process. The idea of a mutually beneficial "flash sale" is important for a high-end retailer like Nordstrom to increase their customer base. In my first blog I discussed the use of online e-tailing by boutiques to increase their market share, giving them the ability to compete with larger competitors like Nordstrom. This article proves how versatile technologies are, as Nordstrom is also using e-tailing technology for a different reason; to sell excess inventory at low prices. Boutiques, traditionally small shopping outlets, are becoming global online. The high-end retailer Nordstrom is lowering prices online. The identities of these different retailers are becoming somewhat fogged. Thomas Friedman argued that technology has made the world flat. Looking at the retail industry this seems to be the case; e-tailing is evening out the playing field.
ReplyDeleteThe technology used for retailers such as Nordstrom in the "flash sales" shows how information technology is bringing retailers and consumers closer together. A company such as HauteLooks exists because facilitating communication between consumers and retailers is valuable for both parties. Retailers can tell consumers when sales are, what products are available and market their products very easily. Consumers are provided with information very easily and can potentially save money because of these "flash sales". Using technologies such as these can remind customers of their relationship with the company and build customer loyalty. Even if the customer does not visit the store for the sale, they still receive a reminder that they should shop there. Technologies such as these can provide value for both companies and consumers and will therefore continue to be developed and improved.
ReplyDeleteThe use of "flash sales" seems to be a necessary technological development for a major company like Nordstroms. As a member of HauteLook I see the benefits of this business technique. The sites Guilt Groupe and Rue La La are are competitors of HauteLook. All three send out constant daily emails to inform members of their current sales, which encourages me to check them out. The fact that you have to join allows members to feel as if they belong to an exclusive group, which encourages them to develop loyalty to the "flash sale" companies. Also, the fact that the sales are only offered for a limited time encourages shoppers to buy products immediately. Nordstroms can get rid of their excess stock through this sort of program by offering it electronically to customers all over the world. This can increase Nordstroms income and also develop a devout cliental for the company. As a member of these sites, and as a shopper, a sale or exclusive deal makes me more prone to buy a product. If Nordstroms uses a "flash sale" technique to reach out to their customers, they will see many positive benefits throughout their company.
ReplyDeleteAs a Nordstrom employee, I found it very interesting and strategic for the company to utilize information technology online to build customer relationships as they sell excess products at a discounted price. It was very strategic for the company to innovatively expand its customer base by targeting online shoppers who demand quality items at a low price. Easily the company can also track the customer’s data from the purchases of “flash sales” and incorporate the information in future marketing campaigns. Nonetheless, the “flash sales” will primarily provide the company with more revenue from the online transactions while also decreasing the amount of obsolete inventory. I predict that the use of “flash sales” will give Nordstrom a competitive advantage over their leading competitors, Macy’s and Lord & Taylor. Hence, the strategic move to “flash sales” by Nordstrom illustrates information technology is key in the longevity of any company.
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