Zulily recently logged in $253 million in its IPO on Friday, showing that e-commerce is not dead, as many investors had thought. This belief is the result of companies like Fab and Groupon failing to bring in a steady stream of revenues and profit to show that the e-commerce business model can show steady periods of growth. However, Zulily's IPO seems to have proven them wrong. Whether this can hold out for the long term still remains to be demonstrated, however it does show that a flash-sales model can be quite lucrative, even if just in the short term.
Zulily's target audience, children and mom's, is one that apparently has a strong base: 39 million households in the United States have children under the age of 18. The real question is whether or not Zulily can create a loyal customer base that revisits and re-uses the site regularly in order to create a high level of CLV. If it can do that, and maintain its reputation by avoiding what happened with Groupon, there is a chance that it proves that the flash-sales model in e-commerce can be a successful long term business model if done correctly.
No comments:
Post a Comment