Zulily Challenges Wall Street Logic with QVC Approach


Flash-sale websites are nothing new, and some might argue that they’ve had their day in the sun.

Fab.com, One Kings Lane and Groupon were once companies on the rise, and now they are reducing offerings and/or downsizing staff. But Zulily, a Seattle-based retailer, is doing just the opposite. They are not only increasing the number of items they offer, but are also hiring more workers.

Revenue is up. The revenue for the company rose from $127 million in Quarter 1 of 2013 to $238 million in the same quarter in 2014. Zulily’s inventory has increased by the thousands. It started primarily in the kids’ apparel sector, but has expanded to items as diverse as ukuleles, men’s shoes and antique furniture.

Zulily’s target audience is primarily moms with young children, and CEO/Co-Founder Darrell Cavens says that that’s primarily the reason for their success. This market understands the value of a good deal and does a lot of their shopping online. They are willing to deal with an average of two to three weeks’ shipping time, and a no returns policy, in order to get a deep discount. The heart of its business, according to Cavens, is moms and they seek to serve their core audience.

Similar to QVC. Cavens sees his company as similar to QVC because of the “discovery approach.” Customers don’t watch QVC searching for something they planned on buying. They see what is available at that time. Zulily customers are the same. They receive emails on daily deals, or login to the website to discover what is available. As product inventory grew from 1,000 to 6,000, the company invested in relevance technology for the site. This way, when shoppers log on, they see products based on what they previously viewed.

Even though some may consider flash sales a fad, Cavens is confident that the site’s strong customer following and fresh content will make Zulily a true online retail contender for years to come.


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