Koodos: The art of the private sale (Part II)

Miriam Lahage has retail in her blood. Her retail career started in 1984 as a manager for a TJ Maxx store and then she quickly moved her way up the ranks into the executive suite. By 1996 she was the  Merchandising Director for both TJ Maxx and Marshalls, two of the biggest off-price retail chains in the US, and both owned by parent company TJX.

But don't let this bricks-and-mortar background fool you. Back in the late 1990's Miriam began to recognise the sea-change that the Internet would spark for retailing. In 2006 she even posted some of her thoughts on the online community Gather, demonstrating an advanced level of comfort with web 2.0 that many other executives of her generation fail to have.

Seizing on this insight and her ease with the Internet, Lahage has been proving herself to be a savvy online marketer. After a few years heading up e-commerce for TJX, she moved across the pond to London to become the CEO of koodos.com in June 2006.  Since then, she has been shaping koodos to become the premier off-price retailer in the online world. The site incorporates many of the hallmarks of a new generation of Internet sites, including a blog, embeddable widgets, and community contests.

We recently spoke to Miriam about one specific aspect of the koodos business model: the online private sale. In the second part of our series, following our feature on hot New York start-up Gilt Groupe, we learn how Koodos is going after this lucrative part of the fashion market.

BoF: Tell us about your  private sales.

ML: Our private sales are held online. People can shop from home, from work, from wherever. We like that there are no geographic or time boundaries with our business.

BoF: Why do you believe the koodos model is needed (e.g. moving from a bricks and mortar model to an online model) and what makes it distinctive from Net-a-Porter, TJ Maxx, and company-owned factory outlets?

ML: We offer designer brands to the people who love to browse Net-a-Porter but can’t afford to shop there frequently. We offer brands, be they manufacturers or retailers, a vehicle to move their excess inventory where they can maintain control of the brand integrity and the pricing. We are positioned to be sympathetic to the brands, to the need for brand integrity and quality experience and offer an upscale environment to sell excess inventory that brick and mortar off-price stores cannot do. We reach out to an incremental customer base that the brands would not otherwise reach.

BoF: As part of your overall offering, what does the private sales component add to your business model?

ML: Private sales offer customers exclusive access to limited stock. It rewards the customers who shop us frequently. It adds a bit of excitement, since we get many people viewing the private sales and telling each other about it. They usually sell out quite quickly. It gives us a way to message the press, who often mention our private sales. And for brands who don’t want to have their product all over the place on the internet, it allows us to sell their product without it being searched by the search engine spiders. Some have us run the private sale and once it is over, give any remaining goods back. Others have us sell it until it is gone. We are very flexible in the approach that we take

BoF: Why is koodos the better option for brands/retailers looking to sell excess merchandise?

ML: I believe koodos is a good option for companies that are sensitive to their brand positioning and want to make sure that they can have input into how they are presented. It’s a good option for companies who do not have e-commerce capabilities and want to leverage our expertise, from fulfillment to photography to customer service to online marketing. And koodos is a good alternative to putting your excess inventory into TKMaxx or selling to the grey market.

BoF: Any parting thoughts on the future of luxury online?

ML: I spoke to the Luxury Briefing group last Wednesday, which was quite good. I think the luxury sector has a vested interest in learning more about online, as the customer is already there. But for whatever reason, they are fairly cautious when it comes to any new initiatives in the digital space. It will be interesting to see where the space is 2 years from now.

Comments

[Manu Srikumar]

Its gr8 news that people from the fashion industry have started to embrace Web 2.0
It is certainly the way ahead. This space has immense potential and koodos(kudos) to Miriam for the initiative.

Manu Srikumar
manu@fashion-networks.com