Hautelook Taking Flash Sales By Storm

In a recent This Week in Startups episode, host Jason Calacanis (@Jason) interviewed Adam Bernhard, CEO and founder of Hautelook.

Interview starts at about the 2:00-minute mark.

Hautelook offers a new "sample sale" each day that lasts for 48 hours and features a limited number of clothing items from 8-10 designer labels. Hautelook works with the labels to take over their "exhaust" or written-off inventory and sell it at a ridiculously low price (up to 75% off retail). Since the clothes are available for a limited time and the hottest brands are constantly being rotated, members are eager to come back quite often to check out, what is quite literally, a new store every day. This gives Hautelook some very sticky customers.

Hautelook is the latest in a string of "flash sales" companies competing for your spending dollars with "today only" or "only 100 available" sales. Though not a new concept, flash sales are making an impact in a big way with how people are buying online. Within the clothing space, there's Gilt Groupe, Ideeli and Kaboodle. Unless you've been living under a rock, you've heard of "deal-a-day" pioneers Groupon - limited number of one-day only coupons redeemable at a local business - and Woot - one-day sale on a single product available in a limited quantity.

What is making these companies so successful is their ability to tap into people's social community to generate new users and sales. Hautelook's "Invite a friend, get $10" promotion has helped them grow to more than 2.5 million members since launching in 2007. This incentive not only encourages members to refer their friends, but keeps the money they earn within the Hautelook system for future sales. The more people they refer, the more money they have to spend at Hautelook. It's a win-win-win across the board for member, referral, and Hautelook.

Though no solid estimates are available at this point, Jason is bullish about his prediction of a 10x growth in 3 years within the flash sale clothing space. Looks like Hautelook couldn't agree more, as they recently raised $31 million in funding. Already at 200+ employees, Hautelook will look to keep pace with their hiring, plus expand their customer acquisition efforts to social media and maybe even a mobile offering. They are also considering expanding to other verticals, where flash sales are popular.

Looking forward to hearing more about Hautelook's success!