Ventes Privées

Ventesprivees.com is a website created in December 2000, which works according to an exclusive club affiliation model.
The e-business is one of the most important French web success story, showing results deserving the giants of the e-business: more than 3,6 million visitors in the first quarter 2006, 2,4 million members, thousands of sales a day for a 250 million euro benefit last year!
Ventes-privées.com is a subsidiary of Oredis, a wholesaler since 20 years, and the inventor of the special on-line sale. The Director of the company, Jacques-Antoine Granjon, invented the concept: The unique combination of exclusivity, selection, price, and value-added merchandising.

The registration to ventesprivees.com is totally free but requires the sponsoring of a friend to be able to go into the "customer's circle" of the site.
By this way, customers have the feeling of being privileged.

In association with big brands, ventesprivees.com organizes special limited sales, with a last time period around 2 to 3 days, in the course of which products are discount from 30 to 70 %. Brands, rather expensive, diestock their unsold articles in unbeatable price.
Members can directly buy goods on the website without having to move to the shop. The payment is made by credit card.

Problems that it solves:

For Customers
-It allows customers to have access to branded goods at very interesting prices. (Example: a Dolce & Gabana t-shirt at 35e instead of 150e).
-The access to this website: customers receive invitations directly by e-mail; it is an easy way to get informed of all the sales and chose the one they want.
- Members can directly buy goods on the website without having to move to the shop. The payment is made by credit card.
-They find various products which customers don’t usually buy especially towards the price.

For Partners
By destocking their products on Internet, luxury brands have the guarantee not to see their goods lost in stocks as it often happen in the real world.

For the Owner of the business
The owner reduces financial risk; the company doesn't take possession of any closeout inventory.

The revenue sources:
-Partnership with brands.
-Getting commission for each online sell: The stocks of unsold articles of the brands spend few times in the warehouses of ventes - privée.com. If the margin is reduced for the reseller, so are the expenses. Ideally, products are even sold before arriving in warehouses. The generated cash is important, customers paying immediately, while products are delivered later.

It is a unique model for the web

Sustainable?

Ventes-privees.com is a successful Business Model. According to the increase of the number of monthly sales, the success comes from the fact that this Business Model is an innovation. Knowing the orders in advance also allows to finish the stocks .
Due to its power, Vente-Privee.fr is the only actor able of making daily sales of more than 30.000. Many brands signed a contract of exclusivity with ventes-privées, which strengthens the power of the website.
However, the e-business company has to manage the variety of 450.000 annual references and face daily orders about 30.000 in rush hour. The challenge is to constantly adapt its plan and its logistic tools, to the demand, to be sustainable.

1 article which describes the strategies and growth of the company:
http://www.businessweek.com/globalbiz/content/jan2008/gb20080111_222659_page_2.htm

Examples of businesses now using Ventes Privées, within their websites.
- BMW set up "The BMW Short-lived Offers" on the web site www.lesoffresephemeresbmw.fr.
From November 27th until December 8th, 2007, the Internet users can acquire vehicles of the brand by benefiting from privileges (a total cover in terms of reparations, a 48 month guarantee, and 60 000 km is available for only 1 euro more).

- Achat VIP, Surinvitation, Club-privé, Linvitedesmarques, EspaceMax, and Dealtonic became the principal challengers of vente privée.

- Having a web site since 1997, Téléshopping, the subsidiary of TF1 launched since September, 2004 a website of limited sales called SurInvitation.com.

What's a mash-up?

It is the capability to mix and match data and applications from multiple sources into one dynamic entity. You put opposite things together= Creates a new product.
The term mash-up comes from the hip-hop music practice of mixing two or more songs.
Timbaland is good in mash ups, mixing different styles of music to rap.

Here's a sampling of mash-up Web sites:
Panoramio: a mash-up of Google Maps and geopositioned photographs of locations
Hiking Outpost: a mash-up of Amazon and online hiking information resources
Flash Earth: a zoomable mash-up of Google Maps and Microsoft's Virtual Earth
Diggdot: a mash-up of Digg, Slashdot and Del.icio.us that integrates and filters content
HousingMaps: a mash-up of Google Maps and Craigslist rental ads that displays geographical information for rental properties.

Google My Location:

Housing Map

Google Map My Location

The Freemium Concept

Rather than bragging about how insanely great its VoIP products are, Skype makes its users insanely productive by letting them talk with any other user worldwide for free. The company makes money by charging users for connecting to phone systems outside of its network. It's a freemium model: Attract users with free services, then charge them a premium for special features.—Bruce Sterling, "Blogging for Dollars," Wired, June 1, 2006

The Freemium concept, whose name was suggested by Jarid Lukin of the Flatiron portfolio company Alacra. appoints a model of monetization in which the basic service is free and the advanced services are paying. But nothing is totally free in this world. Companies which apply this model, offer customers a basic service allowing them to live the necessary experience, to have their opinion about the product or service. Some enterprises also offer all the services but for limited period.
The Freemium model is based on the experiment of the frustration of the purchaser. They create some frustration when the trying user will arrive on the verge of the available features or of the trial period. Thus, by proposing the satisfaction within just a click, companies have strong chances to convert the non paying user in a customer.

Examples of businesses using this model:
- Softwares (with trial versions).
-Meetic : You suscribe for free but have to pay to see complete profiles.
-Second Life;

-Skype.

Advantages:
- This model is a very interesting mean to make its service known to prospects.
- Attractive for web native services to grow fast.
- It a way to get fast purchases online.

Disadvantages:
-It can appear as a trap for some consumers, knowing that sellers play on the clients’ feeling of frustration. They sometimes realize some fast-taken purchases online. But nobody is ever forced to click, no?
-Sometimes customers don’t understand why they’ll have to pay for a service that they got used to have for free, and it can be harder to convert free consumers to paying consumers.
-E-business companies using this model have to find the just balance between the features offered in the free version and the paying offer. Indeed, the supplier has to be totally satisfied to envisage paying.

Sources: http://en.wikipedia.org/wiki/Freemium_business_model

http://www.contentmatters.info/content_matters/2006/05/whats_in_a_word.html

Easy "Model" of Yield Management

Easy Group success story:

The easyGroup, used buy million of consumers all around the world, was founded in 1995 by the Greek entrepreneur Stelios Haji-Ioannou, well-known as the pioneer who changed the European aviation scene for the benefit of millions of consumers.

The company was based on a basic principle:
I) Pick a market where pricing is high and low cost service.
II) Delete all extra-services: No reception, no printed tickets, no free services on board, one single class.
III) “Out-source to the consumer” (ex. book yourself easily online).
IV) Use the cost savings to make advertising by offering real cheap prices (ex: New York- Paris for 199$).

The company started it activity with a low-cost airline company called easyJet, offering flights between Luton and Scotland. 1997 is the year of creation of the easyjet.com. The successful process is in motion.
In 1998, as the airline company becomes a brand, Stelios has the idea to franchise other businesses using the same format.
He works on brand extensions and founds many subsidiaries of the EasyGroup:
easyinternetcafé, easyCar, easyCinema,easyHotel, easyBus.co.uk, easy4men, easyPizza, easyJobs, easyMobile, easyCruiseOne, easyCruiseTwo, easyWatch, easyVan…

The EasyGroup concept based on the Yield management principles:

Stelios Haji-Ioannou adapted the Yield Management principles to his company by rationing the availability of lower-priced units in order to maximize gross revenue.
The Low Cost Company adopted a hard-line strategy to face Full Services companies. Their stratagem has a specific constitution, adapted to the majority: bookings by telephone or internet, offering dynamic prices reflecting the demand at the moment, without limitation for a targeted clientele, looking for low price rates for a "unique" service - with “no” extra.


How? Predict demand for a given date to sell the most possible units for the highest possible rate

The easy model’s purpose: Democratize services that were once only accessible to a minority, to most customers. Thus, the brand targets the mass: More, more, always more!

The easyGroup Brand manual: http://www.easy.com/PDFs/easyGroup_Brand_Manual.pdf


Advantages

For customers
- lower prices. All prices are quoted one way to all customers.

-Possibility to pay only for the service.

-Flexibility: If a customer is willing to pay in advance, he can find attractive prices.
This gives him the opportunity to save money.


For Suppliers

-Fair quality of service: you pay for what you get.

For Partners
Becoming partner of easyGroup gives the advantage of being part of a famous Group. It is possible to buy shares of a business, or buy a franchise of the group.
But the partner has to show some financial requirements:
- Have unit cost-saving of the order of 50% compared with the best in the market;
- be possible to yield manage the price;
- Have the potential to increase utilisation rates compared with the business.

For the owner of the business
For Stelios Haji-Ioannou, the business gives him plenty advantages. He invested 5 million pounds of sterling in easyJet, but he extended his business and his companies won in value.
For example, every cybercafé requires 4 in 6 months before it begins to bring back some money. All the companies of easyGroup are independent in term of financing and management. EasyJet is already profitable and is introduced in stock exchange.

Type of buying situation:

EasyGroup adapted its commercial methods to the new technologies, in particular the Internet, to gain in competitiveness and surpass his competitors. Web allows the group to decrease appreciably the price of the goods and the services which they propose Services are selt through the internet media that reduces costs and increase customer flexibility.


Revenues of the Group come from several sources:

-First selling services and making benefit from the merge won buy selling a huge quantity of services;
- Than it comes from selling shares, licensees or franchisees of the easy brand to selected partners.


Is EasyGroup a sustainable brand? Not sure…

EasyGroup is nowadays more than a simple brand, it became through its 17 extensions, a real empire! Although the best success of the brand remains the first launch of easyJet, the group became increasingly self-sufficient.
But in my opinion of consumer, my first impression of this group left me sceptical. I’ve kind of felt that we (consumers) were taken for dumps. Some extensions of the concept worked quite well for all businesses related to tourism & travel: easyCar, easyCruise and easyHotel.
But it quickly became a phenomenon of cloning for others businesses: easyPizza, easyWatch, easy4men…What else? Who would seriously like to buy those awful watches even if the price is cheap? http://www.easywatch.com/

In my opinion, the group should avoid launching new businesses so quickly and try to keep the seriousness of the brand to be sustainable.

easyHotels, how they increase profit by offering reduced prices

Stelios used the acceleration of needs and possibilities of movement and accommodation of the clients to apply the Yield management principle to easyHotels: In July 2005, Stelios launched his first easyHotel in London, offering rooms as cheap as $35 per night. According to Stelios, the rooms are small and sparse, similar to an Amtrak sleeper car or a berth on a yacht.

- Maximize the space: Ranging in size from 25 to 75 guestrooms, easyGroup is pursuing opportunities at various city centers.
- Offering no "extra" service: There is no bar or lounge or any shared public areas, except for a reception desk, and only one member of staff will be permanently on site.
- Having a booking system, allowing to anticipate the demand and to book maximum of rooms (anticipate vacant rooms).

easyHotels definitely target people in need of a cheap bed … and only a bed! They offer a low cost budget for a hotel but there are obviously hostels (with more services) that could compete with this rate.

http://en.wikipedia.org/wiki/EasyGroup#EasyHotel