It’s fair to say that the arrival of French luxury sales site Vente Privée in America is one of the most anticipated launches of the year… not least because it’s been tough few months for online sales companies. Not only have onlookers been watching Groupon’s financial rollercoaster with a mixture of horror and fascination, but the likes of Gilt and Rue La La have experienced their own troubles too, twisting their business models as the market shifts.
These tribulations are, apparently, not much of a concern to Vente Privée USA’s CEO Mike Steib. The former Googler, who stepped into the job just 10 weeks ago, seems supremely confident. But is it just the hubris of a man whose product hasn’t launched yet? When will we be able to see what Vente Privée is going to do in America.
“I’m not hiding a launch date, because I don’t have one,” he says. “But it’s within weeks, not quarters.”
So what’s the holdup? It’s more than six months since the Paris-based website said it would team up with American Express for the joint venture, after all. Well, the logistics are all in place and need testing, he says, but the marketing machine is gearing up and partnerships are in place with brands. Now it’s really all about getting the technology right so that it works the way somebody dropping hundreds of dollars on an expensive coffee maker will expect.
“You know technology is the long pole in the tent,” says Steib. “we have to have this thing built to scale… we’re not permitted to have a fail whale.”
Getting it right could be a big deal. The Paris parent is widely regarded as one of the strongest startups in Europe for pioneering flash sales — short-lived online scrambles to buy designer brands at cut prices — and turning it into a multibillion dollar business.
Late to market?
But while the arrival of copycats like Gilt and Amazon’s MyHabit in the past few years have made a dent in the market, Steib is not happy for Vente Privee USA to be relegated to “follower”, even if it’s a separate company from its parent. In fact, he can be downright dismissive of what those rivals have managed so far.
“Vente Privée in France has been learning this stuff for years — it’s them I’m taking most of my learnings from, not from a competitor who’s been in the market for two or three years.”
Equally, Steib thinks there’s only so much that VP has in common with the massively over-saturated daily deals space, despite the fact that many people draw lines between them.
“Groupon — actually, let’s just say local daily deals — well, local daily deals are about getting half off pancakes,” he says. “Our service is high-end. It’s jewelry, watches, shoes, designer purchases.”
In fact, he explains that this is really Vente Privée’s secret: that it works hard to protect the ethos and value of the companies whose goods they sell. Traditional retail sales patterns — whether it’s Black Friday, seasonal price cuts, or discount malls — are just ways of training shoppers to wait for price drops. Flash sales, done properly, are the opposite.
“I think if you look closely at the space, there are folks who take an off-price brand and run it again and again. So there are definitely brands that are working with other flash sales companies, but they’re not necessarily getting the best out of them. We don’t run the same sale again and again to the same members. With what we do, you can’t predict what discounts are coming. Seventy percent of people who buy on Vente Privée Europe are making an impulse purchase.”
Big, designer boots to fill
Taking on the challenge of living up to that success is a tall order, though. The company’s funded by VP France and AmEx, as well as Summit Partners (who have a stake in the original business) and clearly has high expectations. Although Steib says he wasn’t given specific revenue targets, it’s pretty clear that there’s a lot invested in making this work.
Giving the job of selling luxury goods to a Googler might seem a little strange (“I did my best to be charming,” during the interviews, he jokes) but actually it’s highly likely his previous experience running joint ventures with NBC . He knows how to keep a group of with different motivations and aims running smoothly. “A bad joint venture is like Christmas with your divorced parents,” he quips. That’s experience that shouldn’t be underestimated.
Still, it’s not a slam dunk. If nothing else, Vente Privée is not a brand that America is familiar with — and given the country’s famously ambivalent relationship with the French, could it ever become one?
“I don’t think there’s any negative baggage to having a European name,” says Steib. “You only have to look at companies like Louis Vuitton or Dom Perignon, nobody complains they’re in French. Of course among shoppers we’ll have to spend some time correcting the pronunciation… but if you’re a brand partner, everyone already knows Vente Privée.”