THE GROUP RULES: Private sale companies are rapidly moving into the territory of another group of e-commerce rivals, the group buying sites, such as Groupon and its many imitators. The latest to add group buying is Ideeli, which today will offer spa treatments at up to two-thirds off — if at least 100 people buy. If not, the deal is off.
“It can certainly help grow our business. It’s offering another stream of revenue,” said Ideeli executive director of brand marketing Tamara Rosenthal. But it’s also valuable for retailers, she continued. “It answers a fundamental challenge retailers have been having, which is, How do you get customers in the door? Once they’re there, you can up-sell them. It’s a great value to the consumer, but the retailer is not losing money,” she said.
Typically, group buys focus on services, experiences and vouchers rather than physical goods, since they cannot be returned and don’t have sizing, color and fit issues. Ideeli plans to offer spa, travel, coupons for apparel and home goods, entertainment and experiences, said Rosenthal. It will offer deals in cities in which its chains operate. Spa Chakra, for example, has five U.S. locations.
Ideeli plans to roll out a mobile application at the end of the year, and is mulling social marketing with mobile social networks such as Gowalla and Foursquare. It also plans to expand into private sales for travel and men’s very soon, she added.
The site has 2.5 million members and anticipates having as many as 4 million members and $150 million in revenue by the end of the year. It has raised $30 million of venture capital to date.
— Cate T. Corcoran