Now that everybody should be familiar with my opinion that flash sales / group buying margins are going to start to collapse I continue to ask what’s the next version of the model?
Gilt group is trying to spin their version of a mob mall rush into a sophisticated lead gen for their partners. Starting on Dec 15th they are going to sell 3 Jettas for $6k each. Gilt makes you log on right at noon and start buying so there is an expiration time element to their motivation rather than a tipping point when the deal is on.
My opinion is that in this case they have a trumped up version of a sweepstakes. Yes there is a “price reduction” but they are really trying to drive their own mobile adoption and then get leads for Volkswagen. If you try to buy this deal and fail Volkswagen will send you a special incentive as a part of their “Wait List” that can be used at dealer stores.
I wonder how many times you will be sent this incentive and reminded that you can redeem it at any time. This is a no brainer for Volkswagen as they get in front of a bunch of active buyers who obviously are willing to spend on “premium brands”. They should get a bit of halo marketing just from being associated with Gilt. In addition to mobile I am guessing that this is an interesting experiment for Gilt to see how their customers respond to a high ticket item like a car.
Either way this is not flash buying, this is lead gen and a user base test. I wish that the press would get it right but traditional marketing is not as sexy a headline as “Volkswagen is the first car sold on on group buying sites!”