Limited-time sales are the latest trend in e-commerce, as Jenna Wortham and I wrote earlier this month. The newest entrant: Zulily, which early next year will unveil a private-sale site with clothes and gear for children and babies.
Zulily’s founders know a thing or two about innovation in e-commerce. Mark Vadon co-founded Blue Nile, the online jewelry retailer that has changed the way diamonds are sold, and is now its executive chairman. Darrell Cavens was most recently senior vice president of marketing and technology at Blue Nile.
Zulily is getting started with $4.6 million in financing. Mr. Vadon invested just over $1 million. Maveron, the Seattle venture capital firm co-founded by Howard Schultz, the chief executive of Starbucks, contributed the rest.
Even as e-commerce growth has been slowing, private-sale sites have been booming. Popular sites include Vente-privee.com, Gilt and Rue La La. Most focus on women’s clothes, though some sell other goods.
Zulily will sell products for babies, children and mothers — like strollers, toys, baby clothes, books and diaper bags — at a discount of 25 percent to 70 percent. The sales will be open to members of the site for 72 hours.
As with most private-sale sites, Zulily will sell overstock merchandise. It will also sell some new lines, which is unusual, but some designers are willing to sell new products at a discount to introduce themselves to new customers, Mr. Cavens said.
“Particularly in this category, where they have a hard time getting consumers’ attention, this is a unique marketing and sales vehicle for them,” he said. “After the sale is over, consumers have to go through traditional channels” to buy the product.
For example, one brand that will sell on the site when it goes live is Origany, which makes children’s clothes from organic cotton. It usually sells to local boutiques, so Zulily will be a channel to new customers.
Sucharita Mulpuru, an e-commerce analyst at Forrester Research, has expressed concern that the market for overstock goods is limited and that not all the private-sale sites will be able to survive.
That is one reason Zulily picked a somewhat different market, though it has some competitors, including Totsy and HauteLook, which sells both women’s and children’s apparel.
“The total kids and baby category is $50 billion plus — larger than books or the jewelry market — and there is room for multiple players,” Mr. Cavens said.