It’s beginning to look a lot like…

…chaos. Overrun malls and shopping centers, complete with strollers guided by Danica Patrick wannabe moms and constant circling in the parking lot waiting for that one spot to open up near the entrance. Wait, no that was 2 years ago. I’ve done some Christmas shopping in the past few days and I must say I am surprised how light the mall traffic has been, no long lines, no problems parking, and pretty good sales to top it off. Any welcoming retail overflow might unfortunately be masked by the fact people are doing a lot of browsing but not necessarily buying. Good for the consumers, bad for the retailers. http://online.barrons.com/article/SB126016440894479709.html

I’m sure glad OpenView doesn’t invest in brick and mortar expansion stage companies.

But what about those online private shopping sites that keep popping up (great work on their content marketing strategy eh)? From Gilt Groupe to Rue La La to Venti Privee, these sites offer what seems to be a surefire way for higher end retailers to unload their unsold inventory in such a way that doesn’t feel so…ahem, bargain bin.

As these sites grow in user base as well as popularity, is there room for any more competitive positioning from potential newcomers? Furthermore where is the opportunity to invest? When these businesses are broken-down revealing what they are worth, I have found something that makes me a bit wary. The assets, more specifically the relationships the management team has with individual brands and designers are difficult to replicate and come from a history of personal interactions with one another, neither of which can be build in a hurry or coded. I try to look at it from a designer’s standpoint; does selling my high end, expensive pieces of clothing at a fraction of my MSRP erode my status as an elite/high end brand?
 
If two guys are walking down the street both wearing the exact same piece I designed and guy #1 bought his at Neiman Marcus for MSRP, while guy #2 bought his at one of the aforementioned sites for 70% off MSRP it would not only frustrate guy #1, but might even force him to give up my brand as a status symbol, or worse make him compelled to only shop for my brand at discount prices…killing my margins.

Don’t get me wrong, I’m a member at one of these sites and I love them from a consumer standpoint but am a bit leery from an investor standpoint.