HauteLook, which has “more than a million members,” with 30 percent more joining each month, according to Mr. Bernhard, recently received $10 million in a round of investment led by Insight Venture Partners.
Mr. Bernhard was polite about the competition, like Gilt. “The more attention they bring into the space, the more attention we bring into the space, I imagine it will be a good thing,” he said. But! “Marketing members are going to choose who they’re going to want to be part of, and shoppers choose which they will go to,” he added. “There’s some girls who will only go to Bergdorf’s or Barney’s. Girls will get the product that resembles what they represent.”
Or what magazines they read.
In July, RueLaLa.com announced a partnership deal with Elle magazine. Members who join the luxury e-commerce site through ELLE.com will have access to “Editors’ Picks” sales, with brands and items selected by the mag’s editors.
RueLaLa.com has also been offering home and “experience” goods (like spa packages and hotel deals) since launching in April 2008. The site has just under 1.5 million members, according to Ben Fischman, chief executive and chairman.
“There’s a dramatic shift into the world of experience—well beyond travel—and into entertainment, services, restaurants and other traditional services,” said Mr. Fischman. “We need to force innovation and do everything we can to surprise and delight our membership; we always want a new and exciting boutique.”
RueLaLa.com has also tried to get ahead by launching a mobile site, so members can access sales, which open every day at 11 a.m., on their phones. A native iPhone application is in the works, too.
As for all the competition and efforts to stay ahead? This kind of online shopping model “brought some of theater back to e-commerce,” said Stacey Santo, vice president of marketing communications for RueLaLa.com.
Andrew Lipsher, a partner at New York–based venture capital firm Greycroft Partners who has looked “diligently” into investing in these kinds of sites, wonders if, as competition gets fierce, sites will create “premium club” memberships for their top users, possibly with a pay system attached, for first access to exclusive sales. “It’s the American Express business model,” he said, referring to the credit card’s color-coded hierarchy. “You’re parsing your database and serving your most profitable customer.”
Neither HauteLook, RueLaLa nor Gilt told The Observer they plan to create a kind of paid, “black card” membership—yet. But Mr. Lipsher said Gilt will be any new, or existing, luxury e-commerce site’s toughest contender. He warned, however, that Gilt is at risk of getting “too complicated, with too many variables. If they get involved with travel, it’d be like walking into Barney’s one day and there was all of a sudden a travel store in there. It’s like, ‘What’s this doing here?’”
Ms. Lyne said although Gilt has their eye on other sites, they are focused on making sure that, however they expand, they stay true to those label-obsessed shoppers clicking in their cubicles. “They love the fact that it is simple, it’s fast and it’s fun,” she said. “You’re never more than two clicks away from a product detail page and two clicks away from buying. We have to be careful as we grow that we hold on to that and we don’t become a giant bazaar.”
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