Cover Story: Taking the Royal Road to Success

Some may say 2010 was the year of the "flash-sale" site. Given the economic climate, it's no surprise these sites caught on — the majority of them offer members limited-time deals at drastically discounted prices. In fact, the three most visited flash-sale sites, Hautelook.com, Gilt.com and ideeli.com, all saw at least a 60 percent increase in traffic per month compared to 2009, one study found. And as of press time, Gilt Groupe was on track to hit $450 million in revenue for 2010.

One Kings Lane is another flash-sale site to watch. Like the retailers mentioned above, One Kings Lane is an online shopping destination that's free to join. Unlike those sites, however, which focus on discounted apparel and accessories, One Kings Lane features limited-quantity designer home goods and home essentials, entertaining and travel needs, and gift selections at prices discounted up to 70 percent.

The online retailer handpicks merchandise from vendors and designers to offer a curated selection, which it then sells below retail. One Kings Lane offers at least two to three brand- and theme-specific sales during a 72-hour time frame, five days a week. To help get the word out about its sales, One Kings Lane alerts its members via daily emails.

The secret to success for the almost two-year-old site? Alison Pincus, co-founder of One Kings Lane, says it's all about spectacular merchandising, innovative marketing and unique brand positioning.

"We work very hard to select the right products, the right brands, the right designers and the right collections," she says. "Our customers come to us again and again because our message of quality rings true." What's more, "leading designers like [One Kings Lane] because we're attracting the right audience, which appreciates the brands, the access and the treasure hunt," Pincus adds.

Not Another Flash in the Pan
One Kings Lane was co-founded in April 2009 in San Francisco by Pincus, a longtime digital media maven, and Susan Feldman, a retail and apparel executive. Both loved high-end home décor.

When they lived in New York, both Pincus and Feldman enjoyed attending private sample sales — events popular in New York's fashion industry that enable in-the-know consumers to get near-perfect merchandise at a fraction of the cost. Retailers use the sales as a way to discard excess merchandise and draw in new clients. But when they both moved to the West Coast, these sales all but disappeared. So they came up with the idea to create a shopping destination that offered the great deals of sample sales in the decor and design sector, with top quality, curated goods that could be accessed from the convenience of one's home or office. Thus One Kings Lane was born.

"We saw what was happening in the e-commerce space with the private flash-sale sites and got inspired to start an entrepreneurial endeavor that combined that concept with our passion for home decor and design," Pincus says.

Merchandise is currently curated to target One Kings Lane's primary audience — women. Merchandise offered by One Kings Lane during a recent flash sale included sea salt with rosemary and fennel from Coastal Goods, a purveyor of spices and other artisanal foods ($19 vs. a $30 retail price); a set of four tortoise napkin rings from Deborah Rhodes' design studio ($29 vs. $80); and french wire shelves from Coco Company, a retailer that carries an evolving collection of baskets ($89 vs. $250). Most of One Kings Lane's merchandise is shipped directly from the product manufacturers, but some is delivered via One Kings Lane's warehouse.

Expanding its Brand
After raising an undisclosed amount of funding from Kleiner Perkins Caufield & Byers, First Round Capital and angel investor Reid Hoffman in December 2009, One Kings Lane expanded its sales offering with new site features, including the following:

Gifts We Love: A shop containing a selection of gifts at low prices, from classic cashmere throws and silver picture frames to coffee table books and more. In a departure from its flash-sale roots, the items in this shop are available every day (and are still on sale).

Holiday Decor Shop: This shop focuses specifically on holiday items accessible only during the holiday shopping season.

Tastemaker Tag Sales: These special sales, which take place for three hours every Tuesday and Saturday evening, allow renowned interior designers to create curated sales of items that reflect their style. These sales are intended to give users fresh content and design inspiration from professionals, as well as give designers the chance to draw attention to their brands and styles.

The Pantry: One Kings Lane expanded its merchandise selection last fall to include "The Pantry," a collection of high-end food items.

Mobile App: One Kings Lane launched a mobile app for iPhone and iPod Touch users in the summer of last year. Available to download for free at the iTunes App Store, One Kings Lane's app enables members to browse and purchase items, get real-time sales alerts, and be able to check upcoming sales. The app also offers zoom-in, full-screen image and one-touch navigation features, and allows members to share their favorite items with friends via Facebook, Twitter or email. About 5 percent of One Kings Lane's members currently use the brand's app, Pincus says.

Last year also saw One Kings Lane hire a new CEO, Doug Mack, a seasoned e-commerce executive who co-founded Scene7, a rich media platform provider for the e-commerce industry that was eventually sold to Adobe.

Marketing Programs
One Kings Lane, like other flash-sale sites, uses a variety of offline and online marketing techniques to get its messages out. For starters, it's enjoyed much success using the media and public relations as a conduit. A quick check of its website shows that One Kings Lane was featured in more than 15 well-known consumer magazines, from Food & Wine to Good Housekeeping to InStyle. The brand also relies on social media, search marketing, online promotions, events and email marketing to reach consumers.

"We've had a great amount of success with social media," Pincus says. "Our members regularly share the deals they're getting on our site with their friends on Twitter and Facebook." After seeing the deals, many of these friends sign up, helping make social media an important acquisition tool for One Kings Lane.

Many One Kings Lane customers are acquired via the brand's "Invite Friends — Get $25" email program. Members invite their friends to become One Kings Lane members, and are rewarded with a $25 shopping credit after their friend's first purchase.
 One Kings Lane also ran an online treasure hunt during last year's holiday season that allowed members to receive selected items on the site free of charge. Here's how it worked: On Black Friday, golden gift icons — in the shape of One Kings Lane's gold gift boxes — started appearing on merchandise throughout the website. The first shopper to add an item with a golden gift icon to a shopping cart each day — and check out with it — received the item free of charge. The golden gifts popped up all day, every day until Nov. 29.

"The golden gift program integrated a fun and interactive gaming element into the holiday shopping experience, while presenting another opportunity for One Kings Lane customers to access spectacular savings online," Pincus notes.

What's in store for One Kings Lane in 2011 and beyond? "We've had a lot of success in 2010 and we'll continue to build on that," Pincus says. One project that will come to fruition is the launch of a One Kings Lane iPad app.

What's more, One Kings Lane recently acquired top publishing design firm Helicopter, which will bring the online retailer industry-leading design and content capabilities to provide shoppers magazine-like context for items as they browse. In assuming leadership for One Kings Lane's in-house design and content teams, Helicopter will be responsible for broadening the site's scope and depth by developing content that inspires shoppers with new ideas about home decorating, including interviews with leaders in the design industry and features on everything from gift-giving to entertaining.