Gilt’s Rumored IPO Shows Flash Sale Maturity

Rumors have been swirling about an impending initial public offering (IPO) for Gilt Groupe, the Amazon of the flash sales world.  Whether or not Gilt does go public in 2013, the scuttlebutt underscores one undeniable fact: the flash sales industry is well established.

When we at Mercedes Distribution Center began fulfilling orders for Gilt a few years ago, the industry was fledgling, considered by some to be a fad.  But flash sales, which drew inspiration from the sample sale days, proved to be a viable business model.  As Gilt enjoyed its meteoric rise, other companies, catching wind of a blossoming industry, entered the flash sales fray, companies like Rue La La and Ideeli becoming major players themselves.

An IPO for Gilt would indicate a new era of maturity for flash sales.  It’s interesting to note that the birth of flash sales in North America roughly coincided with the Great Recession.  Logic might have dictated that at that point discretionary spend would have been too small to fuel an industry so dependent on it.  The success of flash sales in spite of the recession shows that the industry is not a fad but rather an effective business model whose foundation of urgency and exclusivity manages to engage consumers even in down economies.