How Rue La La Lures Customers to ‘Must-see Shopping’

Once upon a time, consumers abandoned mom-and-pop stores in favor of malls or big box stores because it was a way to save time — instead of just one store or type of product, they could make one trip and find numerous different options.

These days, however, many malls and big-box stores are trying to beef up their services in the face of the latest “most convenient” option — which, increasingly, means going online. But online retailers, too, are trying to shave off the number of clicks or minutes customers have to spend to get what they want.

So what is a retailer to do? As the industry shifts, saving time has become a key component, but the sector as a whole is still figuring out the magic formula for saving more of it, while also increasing sales and boosting the customer experience.

“Time is precious, and any time that a retailer or any business can give back to a customer, you are creating a magical moment, a magical business opportunity,” said Steve Davis, CEO of members-only shopping site Rue La La. “Time is a giant friend to innovators, and it’s a giant foe to the status quo Twitter .”

Davis was among the speakers at this week’s Retail and Consumer Goods Summit focused on the customer of 2025. The event was organized by Knowledge@Wharton, Wharton’s Baker Retailing Center and Momentum Event Group.

“Time is precious, and any time that a retailer or any business can give back to a customer, you are creating a magical moment, a magical business opportunity.”

While online still makes up only about 10% of all retail business, speakers at the conference noted that the majority of purchases involve some sort of online experience. In many cases, it’s a place to get questions answered — whether those are price comparisons or queries about where to find a particular item.

“My first eBay purchase was a Mattel football [toy] from the 1960s and 1970s,” said Davis, who used to spend hours using the toy as a child. “My ability to find that prior to eBay would have taken a lifetime in flea markets. With one search, I found hundreds. Now there’s a company that is remaking them.”

But even the price comparison prowess of companies like Google has been surpassed by an even more enticing time saver — the ability to price compare and buy with just one click on Amazon. The e-commerce giant is now offering one-hour delivery in some markets, and on April 1, the firm announced Amazon Dash — a gadget that consumers can stick anywhere in their homes and order more of a particular product by pushing just one button.

15 Minutes vs. 22 Hours

At Rue La La, which was founded in 2008 and acquired in 2009 by eBay, the question of time in some sense comes down to the four-hour window between 11 a.m. and 3 p.m. — the time when the day’s curated “boutique” opens and the 48-hour lifespan of a sale begins to tick down.

“We’re a half-billion-dollar retailer, but we look like a $10 billion retailer” for the first 15 minutes after a sale goes live, Davis noted.

The challenge, Davis said, is to create reasons for customers to visit the site or check the app during the other 20 hours of the day. To that end, Rue La La employs a programming team charged with coming up with “must-see” shopping every day.

“We’re fixated on getting customers’ attention,” Davis said. “I feel like I’m competing more with Facebook and Pinterest [than other retail brands]. I want to capture more of those time slices you have each day…. If we inspire you, if we get you interested, you will buy.”

The Beauty of Bargains

Rue La La’s target customer is in his or her 30s, makes more than $100,000 a year and spends a lot of time on mobile devices. In fact, Davis said the idea is that consumers should be able to shop their mobile or e-mail notification of a sale before ever going to the site.

“We curate our assortment every single day so we make sure you can get through it in 15 minutes,” Davis notes. “We’re not about the long tail; we’re about the short tail.”

“I feel like I’m competing more with Facebook and Pinterest [than other retail brands]. I want to capture more of those time slices you have each day.”

The draw for retailers to sell their wares on the site is that they can get rid of excess inventory while getting in front of an attractive customer base with a visual presentation that is more appealing than the stereotypical close-out store. “It should not be a sale rack; it should be beautiful,” Davis said.

“They want to move excess merchandise, but they don’t want to be on sale 365 days a year; it is damaging to the brand,” Davis noted. “At Rue La La, we put brands on sale for 48 hours maybe six times a year — they can move a tremendous amount of volume in that time.”

An Industry Solution

While many online retailers are opening bricks-and-mortar locations as a way to extend the services they can offer, Davis doesn’t currently see a place in that space for Rue La La.

“Bricks-and-mortar is becoming a mono-brand, vertical model,” Davis said. “Book retailers used to be a good place for many publishers to get under one roof. Today, only Barnes & Noble is still around, and I’d be surprised if it’s around in 10 years.”

It’s not that customers don’t want a multi-brand environment, Davis added — it’s that today, “they get that online.”

According to Davis, customers have “a visceral reaction” to having to pay for shipping — even when the total price is still cheaper than what other retailers are offering. To make the hit go down easier for its customers, Rue La La offers programs where they can pay a flat fee that covers shipping for an entire month, or the entire year.

Rue La La also works with Shop Runner, which helps retailers offer a program similar to Amazon Prime with unlimited 2-day free shipping. But Davis said diffuse solutions will not be enough for retailers to take on the behemoth that Amazon has become.

“There has to be an industry solution to compete against Amazon; unless you have that, you’ll lose,” he noted. “The challenge is that a lot of people are going after that market. I think none of them get scale and therefore, no retailers can compete successfully.”

Citing Knowledge@Wharton

Close


For Personal use:

Please use the following citations to quote for personal use:

MLA

"How Rue La La Lures Customers to ‘Must-see Shopping’." Knowledge@Wharton. The Wharton School, University of Pennsylvania, 28 April, 2015. Web. 18 October, 2019 <https://knowledge.wharton.upenn.edu/article/how-rue-la-la-lures-customers-to-must-see-shopping/>

APA

How Rue La La Lures Customers to ‘Must-see Shopping’. Knowledge@Wharton (2015, April 28). Retrieved from https://knowledge.wharton.upenn.edu/article/how-rue-la-la-lures-customers-to-must-see-shopping/

Chicago

"How Rue La La Lures Customers to ‘Must-see Shopping’" Knowledge@Wharton, April 28, 2015,
accessed October 18, 2019. https://knowledge.wharton.upenn.edu/article/how-rue-la-la-lures-customers-to-must-see-shopping/


For Educational/Business use:

Please contact us for repurposing articles, podcasts, or videos using our content licensing contact form.