News International appears to be hopping onto a new trend in online shopping: members clubs. Today the parent company of newspapers such as The Times and News of the World, is investing in online fashion company Brand Alley UK, which offers private sales and bargains designer fashion brands. The joint venture with French online boutique BrandAlley will be a luxury “private members’ club”. You’ll soon see ads appear in the Sunday Times’ Style magazine and other NI titles. BrandAlley was launched in France in 2005, is backed with VC cash and claims a membership base of 1.3 million and 200 brands.
Meanwhile in Germany Brands4friends has appeared. Like Brand Alley it is a free-of-charge community which allows its users to buy selected original products from well-known and popular fashion and lifestyle brands in time-limited and quantity-restricted sales promotions at attractive prices. As a result it is growing at 10,000 members per day and is now one of the world’s fastest growing eCommerce communities. Last December it closed a second round of 5 million Euro funding from Mangrove Capital Partners, a leading European venture capital fund and the first institutional investor in Skype, with other private financial investors. The Brands4friends attracted more than 200,000 registered members in just ten weeks after its launch. It is currently just in Germany.
However I can’t help wondering if there is a more Web 2.0 approach to this model which has yet to be applied, and a wide open market in the UK. In the UK Crowdstorm is a privately-backed ‘social shopping’ site which is going for the generalist end of the market. Type in Armani and you will find nothing in its inventory. That’s not to say this is a failure – they are going for a mainstream market, not a luxury one. But their model could possibly be applied in a niche like luxury as well, and certainly be more open. Brand Alley is the kind of site where you can see nothing without logging in or becoming a member, putting of many potential customers. And I doubt very much if they have thought too heavily about distribution (widgets etc) amongst social sites like Facebook or MySpace.