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The Web site, which is promoted as "a members-only shopping community for trendsetting women," offers in-season and past-season luxury products at discounts of 50 to 90 percent, as well as weekly giveaways.
The idea is about subliminal marketing and captive audiences. Here's how it works: Ideeli.com members get a text message or e-mail that a sale or contest is about to begin. That's the bait. Before they can win or buy anything, however, they must read some carefully crafted copy about the brand. Oscar de la Renta, Jimmy Choo, Burberry and Prada — they're the hook — are among the labels that pay a fee and have used or are now using Ideeli.com to reach customers.
Consumers who participate are prompted to spread the word, sharing information much as they do on YouTube or Facebook.
"We found that there is a real need for [luxury brands] to respond to the rise of social media and manage how they're perceived online," said Ideeli.com founder and chief executive officer Paul Hurley. "The core customer for all the top luxury brands is spending more time online than less-affluent customers. They're using their peers' opinions to help form opinions about what they like and don't like. [Brands] need to engage this audience. Technology has made this more powerful."
While "everybody knows the top brands," Hurley said, recognizing a luxury name and knowing a brand intimately are two different things, and when it comes to high-end products, subtle design nuances and details can inspire loyalty. "How do you get an affluent customer who is time-starved to understand the key details of a new collection and how they're different from competition," Hurley said. The site is also being used by brands to drive traffic to stores.
Ideeli.com, which had a soft launch in May, in December received $3.8 million in funding from Kodiak Ventures and angel investors. The site has more than 10,000 members, which Hurley said will rise dramatically in the first quarter.
Premium subscriptions entitle a member to shop sale items for one hour before all other members, and be notified of a sale or giveaway via text message. The cost is $7.99 per month. Standard memberships are free, but consumers quickly learn that if they want to get in on a sale or win a freebie, they'll need that premium upgrade. "We use the metaphor of a private sale to capture attention," Hurley said. "Members can go to the Coming Soon section to see a list of sales, but don't know when they will start."
"We want to maintain the image of scarcity," Hurley said. "Things sell out very rapidly and we make sure we generate more demand than we actually have."
Baccarat has participated in three giveaways on Ideeli.com. "We wanted to introduce our jewelry in a new media setting,'' said Jaime Jimenez, director of public relations at Baccarat North America. "Social Web sites reach luxury buyers and they get engaged in the broader picture of the brand. We have a link on Ideeli.com to our new ad campaign [photographed] by Ellen von Unwerth. A lot of consumers check out the jewelry we're giving away and then check out the campaign and get more involved with the brand. We're reaching a younger customer who may not be saying, 'I've got to walk into Baccarat and buy 12 [crystal] stems.'"