In its final year trading as vente-privee.com, the French ecommerce giant and pioneer of online flash sales enjoyed a turnover of €3.7 billion, representing 12% growth. Its 2018 results are all the more impressive given the lacklustre fortunes of other players in the flash sales market. And with its 12 pan-European divisions now consolidated under new name, Veepee Group, the business anticipates further success as it seeks to leverage cross-country collaboration to build an enviable portfolio of partner brands.
We caught up with Veepee Nordics Country Manager, Nicolai Kargaard Thomsen, who explains why the flash sales business model remains relevant today, as well as how the new Nordic division will help bolster the Group’s overall proposition.
Wind back the clock 10 years and flash sales sites were everywhere. The easily replicable model – a simple ecommerce website where members register for free and gain access to regular ‘sales events’– was first conceived in the early 2000s. These sites enabled consumers to buy heavily discounted brands across several categories, while brand owners could sell large volumes of stock, which would otherwise remain stuck in warehouses or retailer storerooms.
Vente-privee.com was at the forefront of this phenomenon. And favourable post-recession conditions in the mid-2000 saw the business enjoy a period of strong organic growth, as well as expansion outside of France.
In recent years, however, the broader flash sales market has faced several challenges. A recovering economy is one element, but also rising costs and pervasive discounting by struggling retailers have made reproducing the early successes of the industry difficult. Vente-privee.com’s strategy for continued growth and expansion amidst this changing environment was to join the acquisition trail in 2016, buying several leading flash sales sites across Europe and the Americas.
Denmark’s Designers & Friends was acquired fully in March 2018. In 2010, the company had become a “first-mover” in the Nordics, launching the region’s first-ever flash sales site – its platform inspired entirely by vente-privee.com, whom its young founders had read about and admired in the online journal, Tech Crunch.
According to Nicolai, the founders of Designers & Friends did an excellent job in attracting local brands, launching some great offers and growing the membership base. It's only through acquisition, however, that the small independent business can truly realise its potential on the international stage. Nicolai explains why the Nordics was a key target market for the Veepee Group:
“Nordic consumer purchasing power is one of the strongest in Europe. The region also has high internet penetration. These two factors make it a very attractive market for any ecommerce business. The Nordics is also home to some of the best fashion and home and décor brands in the world. Designers & Friends represented the ideal opportunity for Veepee to get closer to those brands, and act as a hub to grow the fashion and home and décor categories across Europe.”
The combined Veepee Group, with divisions in France and Denmark, as well as Spain, Italy, the UK, Belgium, the Netherlands, Germany, Austria, Switzerland, Poland, Brazil and Mexico, is now a leading ecommerce player in Europe. And while Veepee is currently only available in Denmark, investment and support offered by the Group will enable the division to become the leading flash sales platform in the Nordic region. First though, a period of change would transform the start-up into the hub of a major European group.
"Change was inevitable,” Nicolai says, as Designers & Friends entered the Veepee world. Every aspect of the business has experienced a degree of it during the last 18 months. That includes infrastructure, mindset and ways of working.
And while the core team was retained, Veepee Nordics has strengthened its headcount, hiring more senior-level talent as well as people with digital marketing skills and international experience. There are now 40 people based at its Copenhagen headquarters, and Nicolai is thrilled about the added capability the new additions bring to the team:
“We’ve hired category experts to help us develop partnerships with international brands. It takes a higher level skill-set, knowledge and experience to negotiate and secure partnerships with international players compared to smaller domestic companies. Digital marketing is another area where we’ve improved our capabilities. Our new hires have, together with the existing team, done some fantastic things around launching the Veepee brand in the Danish market.”
At Group level, fashion is Veepee’s core category, but the business has successfully diversified its portfolio in recent years, and now offers members a selection of deals across accessories, toys, watches, home appliances, sports equipment, technology, wines, and even travel, entertainment and music. Veepee’s aim to continue building brand partnerships in different categories was a key reason behind its acquisition of Designers & Friends. And it’s Scandinavian design and high quality home and décor brands, says Nicolai, that proved particularly enticing for the Group.
There are several “beautiful” Scandinavian brands in the home and décor category that Veepee does not yet partner with, he says. Nicolai’s team of category experts are actively monitoring trends in that segment and building a selection of target brands for future campaigns: “Veepee has a clear road map of how it will grow the Nordic business. And Home and Décor represent a natural step for Veepee Nordics to expand its range from fashion and into lifestyle.”
He added: “As well as being able to sell some of the best international brands to our Danish members, Veepee’s international business model means brands can leverage our platform to gain market share and improve brand recognition in other territories. Our ability to offer international exposure to our Scandinavian partners, alongside big global brands, gives us a genuine edge in the market. We expect that these brands will do very well for us at the European level.”
International exposure aside, what are the general benefits of partnering with Veepee on a flash sale campaign?
Amidst declining footfall in traditional brick and mortar stores, a fundamental challenge today for brands is getting a better grip of distribution channels while protecting the brand’s image. According to Nicolai, Veepee’s platform not only helps brands sell large volumes of products quickly but also guarantees the characteristics of the brand are retained while helping drive traffic to a brand’s own webstore or retail outlet.
He explained how at the company's studios in Paris and Barcelona, brand partners work alongside in-house creative teams to produce bespoke visual campaigns – all on their own terms. Furthermore, the business packages customer demographics and product data in a way that helps its partners make commercial decisions, as well as indicating how Veepee can optimise marketing, logistics or product assortment in any future campaigns. With warehouses all over Europe too, Veepee remains efficient and as close as possible to consumers.
“There are very few flash sales platforms in the world with the ability to sell such large volumes of stock within a five day offer period,” Nicolai highlighted. “And these additional services are indicative of how Veepee goes the extra mile for brands. Finding a trusted partner like Veepee is essential as it means you limit your exposure to discounting and the potential reputational issues it entails.”
Veepee has a unique proposition in a crowded market, says Nicolai, though in addition to making strategic acquisitions and diversifying its brand portfolio in recent years, he emphasised how the company continues to remain successful by constantly evolving its business model in line with consumer buying behaviour.
Improving delivery times is currently a key priority for Veepee, as today’s customers demand faster service. Customer experience is important too, Nicolai says, especially for younger consumers who often value the experience more so than the transaction. Part of this is about showcasing the right brands at the right time. Veepee manages around 54,000 campaigns per year across 7,000 partner brands. And the challenge with so many campaigns is ensuring excellent user experience by launching the right campaigns at the right time.
In Nicolai’s words: “You must always remain relevant to consumers and present them with exactly what products and services they’re looking for. Every Veepee campaign must have a ‘wow factor’ too – surprising, interesting, fun and relevant in terms of brand, price and product offer.”
Veepee’s decision to grow through acquisition was "visionary", according to Nicolai. The company is now in a strong position to realise its ambition as a global provider of ecommerce services. And with the necessary infrastructure and talent in place, Nicolai is also confident Veepee’s Nordic division will fulfil its critical role, expanding across the region and securing partnerships with the best Nordic fashion and home and décor brands:
“It takes time to build trust, but over the last 12 months, we’ve made great progress in selling our proposition and inspiring brands to work with us. They’re beginning to see the value we offer.”
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