Offering limited period discounts on over 700 well-known fashion brands including Chanel, Dior, Nicole Farhi, Fendi and Maurice Lacroix, SecretSales is very much a business of the times. Since the economic crisis, consumers are increasingly savvy, desiring access to high-end brands, but not at high-end prices. The company was launched at just the right time to be able to capitalise on this, with co-founder brothers Nish and Sach Kukadia attracting their annual target of 3,000 members in the first month of the site’s operation. SecretSales now has over two million registered members, 100 employees, a turnover of £20 million and is branching out into new product categories such as homeware.
How it works
Nish and Sach grew up in what they call a “fashion forward” household, with their father – a shareholder of Pepe Jeans – encouraging the brothers’ entrepreneurial flair from an early age. They launched SecretSales in 2007, after some dinner table conversations with co-founders Michael and Silvia Cody, who had observed the success of vente-privee, a French company operating a similar business model. The Codys no longer hold active roles in the company, but remain shareholders. “We wanted to bring brands and customers together in a unique way,” says Nish. “It’s an incredibly efficient working capital model, where you don’t take inventory risk on products until you’ve sold them.”
“Stock is reserved on our behalf by the brand,” explains Sach. “We request samples which we photograph and use on our site and in our marketing. After this, the sale launches, with members invited to the campaign via email. They can then buy within a four-day window. Once the sale has ended, the goods our customers have purchased are released to the SecretSales depot, and we send them out.”
Nish and Sach are extremely knowledgeable about their customer base, what they are looking for from SecretSales and their buying behaviours. Nish outlines: “Our customers are smart shoppers, predominantly female, affluent, aspirational but responsible. They are proud that they are able to obtain premium brands at a good price. We have a core member base which visits our site every single day.”
He adds: “We have invested a huge amount of time and tech resource in integrating a new CRM and email platform, so we can target customers on a preferential behavioural basis. This is the first contact, or the ‘shop window’ interaction, with our customers. Buying is often a more emotional process than a transactional one, so we work to engage at this early stage.”
Social media connections
As an online-only retailer, social media plays a crucial role within the business model and significantly impacts on sales figures. SecretSales updates its social media channels daily and uses the platforms as a route to engage with and alert customers to new sales or sales which are about to end.
“We focus on Facebook rather than Twitter as it is richer in terms of content, but also for the granularity with which you can target customers,” states Nish. “We want to clear large volumes of stock for our suppliers, so need to access the right type of customer.
“Facebook allows us to get under the skin of these customers and use this rich profile to target others, with similar likes, dislikes, behaviours and so on. Also, Facebook gives us a platform to talk about what we’re doing as a company and our values, as well as more quirky things not directly attached to making a sale.”
Adds Sach: “Social media reduces our customer acquisition costs, allowing us to re-engage with existing customers and make the relationship interactive and more valuable. By encouraging customers to share what they have bought on our site, we can also generate almost a viral mechanism.”
Social media has also been utilised by the business at blogger and journalist events, where attendees have been encouraged to share SecretSales with their followers, raising awareness of the brand among target audiences.
“You’ve got to have your finger on the pulse of what’s going on outside your business and tie this in to what you are doing, without being pushy. It’s about making your service relevant in the eyes of your customers. Social media is a simple, cost-effective way to do this and can get tremendous results.”
5 business lessons
- Know your audience – we wish we’d invested in quality data earlier; it cuts out ambiguity and gives you confidence to be proactive
- Get back to the floor as often as you can – we want to be the type of managers that get stuck in when it’s needed
- Invest in people who are better than you – you should learn from your employees – it’s their company as much as it is yours
- Come to the office not to work, to network – retail is a people industry
- Have a laugh as often as possible! – a happy team will work harder for you
For more information visit: http://secretsales.com/
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