Another flash sale site has gotten the boot. Amazon’s MyHabit will close at the end of May 2016 after a five year run. The flash site’s demise will allow the retail giant to continue its focus shift towards its private label fashion branch.
“Fashion is one of Amazon’s fastest-growing categories. As we continue to increase our breadth of selection and improve the customer experience on Amazon.com, we have decided to simplify our offering and will be closing MyHabit at the end of May,” according to a statement Amazon released to WWD. “Our customers can now shop from Amazon Fashion’s incredible assortment of brands across clothing, shoes and accessories — backed by award-winning service, free shipping and returns, and exclusive benefits for Prime members.”
Amazon launched MyHabit when the flash sale model started booming, and is shutting it down at a time where they’re fizzling out. But this isn’t the first time Amazon has pulled the plug on this type of e-Commerce model. The retailer closed its daily deals site, Amazon Local, in Dec. 2015.
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While the model thrived back in the early 2000s, when consumers were feeling the effect of the recession, it’s been losing steam for quite some time. Just recently, Living Social, a platform partly owned by Amazon, announced it will be laying off more than half of its employees. Additionally, MyHabit’s competitor Gilt Group was purchased by Hudson’s Bay Co. for $250 million, far less than its peak valuation of $1.1 billion.
However, the fall of flash and daily deal sites doesn’t signal that consumers are uninterested in discounts and promotions. It seems that they prefer to buy designer products for bargain prices at outlet stores instead. While both sites and stores allow brands to get rid of unsold inventory, for consumers, outlet stores are often easier to shop in. Customers can try on clothes and return them at their convenience, while flash sale sites typically don’t allow returns of designer items purchased online.
With that said, most of the top flash sales sites are being integrated with retailers’ outlet-type stores, which provide locations for returns of items purchased on the sites. For example, Hudson’s Bay paired Gilt with the off-price Saks Off 5th brand, and recently opened up a Gilt shop inside the Saks Off 5th store in New York City. Additionally, Nordstrom merged hautlook.com with its off-price brand Nordstrom Rack just two years after the retailer acquired the site.
The number of jobs affected by Amazon’s decision has not been disclosed, but Amazon said they are “committed to assisting MyHabit employees in finding new roles within Amazon.” Garth Mader, General Manager and CEO of MyHabit, has taken on a new role, that of General Manager of Proprietary Brands & Partnerships of Amazon Fashion, according to his LinkedIn profile.
