Entries in Swoopo (2)


E-commerce gaming finds a new target: travel deals

In an online marketplace already rife with distortions of limited time offers, opaque pricing schemes, deal aggregators and misleading hooks, a new online entrant offers yet another time-sucking deal variant: variable auctions. The web savvy traveler already operates in an online world where travel deals abound, but the deal is rarely exactly what he hoped for. You can sacrifice certainty on Priceline, stress over price trends on Kayak, and accept suboptimal pairs in the name of bundling on Expedia.

But if you're willing to add more stress and uncertainty to your travel planning, check out Off & Away, a Swoopo-like platform to auction off luxury hotel rooms at bargain pricing. As in Swoopo, the hook comes in the form of costly bids. In order to raise the price of the room by $0.10, you need to place a "bid" which costs you $1.00. As the clock winds down, each additional bid raises the countdown by 30 seconds, so theoretically it could go on forever, in reality, the last couple of minutes take about 45 minutes, from what I've seen.

I've discussed my opinion (hint: it's negative) of Swoopo before and most of that analysis applies here. While I generally love online markets that open up new buying/selling opportunities, the Swoopo and Off & Away model is market distortion, not market efficiency. Bidding is more of a game of luck of getting in at the exact moment than a mechanism to determine true market value.

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Gilt Groupe and its clever e-commerce pull

Lately I've noticed a resurgence of new e-commerce destinations practicing clever tactics to once again make online shopping fun, since the amusement of eBay has made way for the practicality of Amazon. Swoopo is cashing in on the trend of integrating of gaming to other online activities (although I still believe that it is a scam); while Groupon uses daily deals that expire at midnight and become free for you if you get enough of your friends to buy (a truly addictive site). Both sites have been wildly successful lately.

Another site seeking to be your guilty pleasure: Gilt, a "by invitation only" site to gain access to very high-end luxury items at great discount. Once inside, you have the opportunity to click as fast as you can every day at noon, when a new set of items are made available. CEO Susan Lyne describes it as "like a sample sale online" except of course, you don't have to wait in line at 6 AM or fight hoards of other shoppers to grab the last size 4. Similarly, the refined Ms. Lyne is clear that "it's not just because it's discounted that it's fun; rather, there is a competitive aspect (like the early eBay) only you get instant gratification." The best items do sell out quickly, so you should arrive prepared, say knowing what parts of the Oscar de la Renta herringbone collection you want to hit first:

So how to gain an invitation to this elite private shopping network? Go to website. Request invitation. Receive invitation the next day. Register. Or you can go to Yelp and see the type of clientele who is "obsessed", "addicted", and "in love" with this website, many of whom claim to hold access to a coveted invitation.

This site is a smart addition to the e-commerce scene. Rival Ruelala was recently purchased for $350M, while prime competitor Vente Privee is expecting to do $750M in sales this year. Gilt Groupe, meanwhile, grew four fold this year as is expecting to do $500M in sales next year, up from $200M this year and less than $100M the year prior. The site is pretty and fun and does a good job of feeling rich which is a nice change from the cheap feeling of eBay or Zappos.