It seems that there is nothing hotter in the ecommerce world today than private sales. This innovative online retail concept was born in 2001 by vente-privee.com, which translated popular Parisian events during which designers would open their stores and sell overstock merchandise at dramatic discounts, into a similar online experience.

Since then, private sale sites have exploded across the globe, with early leaders such as the above-mentioned vente-privee.com, as well as Gilt Groupe, Rue La La, HauteLook and ideeli, reaping the benefits.

Private sales is truly a win-win business model, in that these sites offer consumers a unique and exciting shopping experience, and also offer retailers an opportunity to better achieve standard KPIs than many other retail models (online or off). Private sales sites are built to inherently:

• Generate impulse purchases, which have been notoriously difficult to achieve online, by selling limited quantities of merchandise at deep discounts.
• Obtain new customers for virtually no cost, due to the exclusive, invitation-only model.
• Create a loyal customer base that is basically trained to return to the site every day, at the same time.
• Sell overstock merchandise without damaging the brand’s reputation.

So, if private sale sites are so popular, what do you need to do to launch one? At Optaros, we’ve found that Magento, and open source ecommerce solution, offers the majority of the functionality needed to develop a successful private sale site.

Out-of-the-Box Functionality

Modules already exist within the Magento framework for essential private sale features, including:

Urgency
o Magento provides robust tools for setting up and managing timed events. The administrator simply organizes each event in a private category with associated a start and end dates.
Virality
o Magento has a pretty slick offering for invite-a-friend functionality, complete with associated user rewards and credits.
Exclusivity
o Magento offers sign-in options to keep private sale sites exactly that – private.
Sales
o At its core, Magento is an ecommerce platform, equipped with both product management and merchandising functionalities.
Content
o Magento offers a newsletter module to allow retailers to easily send emails to registered users. This is key for private sale sites, which typically email consumers when an event is about to begin.

Customization

Really, aside from minor tweaks to existing modules, the real customization comes into play when you begin building the user experiences, and customizing the design of your site.

For private sale sites, the most important functionality from a business perspective is to generate buzz and make it feel exclusive. Your customers need to feel that they are getting the absolute best bargain they have ever seen, and a key element in this is offering a chic site design that is simultaneously easy to browse, easy to shop, and has a high-end look and feel.

Another important element of private sale sites is the ability to highlight the low amount of inventory left, as well as the time left for the event, in order to further encourage impulse purchases.

A popular, but often-debated feature, is cart reservation – the upside being that visitors can browse longer and purchase multiple items without worrying about them selling out; downside being that this can facilitate hoarding and distort product availability to other consumers. Despite the debate, many sites do find cart reservation to be effective, and for this reason we developed a Magento extension for cart reservation (one of the few features that isn’t available out of the box).

Quick-view modals are also key for allowing consumers to learn more about a particular item without having to navigate to a separate product detail page, thus loosing precious time. Although this isn’t supported out-of-the-box with Magento, available community add-ons and plug-ins offer a great start.

Lastly, it’s important for private sale sites to make the buying process as quick as possible with optimal shopping cart and checkout functionality. With Magento, this can really be built any way you design it, but a best practice is to keep it short – ideally one page only for checkout. For one client in particular, we developed the shopping cart to be perpetually at the right side of the page, so shoppers always know what is in it, and can simply click to a one-page checkout that has saved as much of their information from previous purchases as possible.

Scalability

From technical build standpoint, Magento is great. However when performance and scalability come into play on the live site, there is a serious need to plan ahead. This is particularly true for private sale sites, because typically all of the site visitors come to the site at the same time, at the beginning of a new sale event.

To overcome potential problems, caching is extremely important. Magento is built using PHP, which is a descriptive language, and slower than java because it has to be interpreted by servers. This complexity can cause poor load times, unless caching is employed.

After building several private sale sites for clients with Magento, we’ve found that caching, along with the pervasive use CDNs (content delivery networks) and Amazon’s EC2 cloud framework, can make the difference between a site that performs well at peak times, and a site that fails its users.

End Result

At the end of the day, the great thing about Magento is that you can come up with almost any user experience and make it work – an especially big benefit with private sales. Out-of-the box, Magento offers a pretty standard user experience, but its open source framework allows for complete customization, so that designers can build just about anything you can imagine.

Are you considering a including private sales in your ecommerce mix? Learn more by downloading our free eBook, The Secret to Private Sales.