Surprising Buyer May Be Key to Zulily’s Survival

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Zulily, a struggling Internet retailer, is being purchased by Liberty Interactive, which owns shopping channel QVC.

The $2.4 billion sale, announced in a Liberty press release, could be the life line the Seattle-based flash sales site has been waiting for. Zulily sells maternity gear, baby clothes, toys, home décor items, women’s shoes and clothes, and any other products that appeal to millennial moms.

After years of rapid growth at Zulily, including hundreds of dollars in sales to yours truly, sales at the once-popular site all but stalled, The Puget Sound Business Journal reports. Zulily’s shares lost nearly half their value before Liberty Interactive opted to purchase the company.

Zulily’s biggest issue has been turning one-time shoppers into return customers. Its customer growth slowed to 35 percent after the first quarter of 2015, a sharp decline from the 54 percent it ended with in 2014.

“Zulily’s problem is it’s not sticky. Clearly they weren’t getting a lot of return business,” Paula Rosenblum, managing partner at retail consultancy RSR Research, told CNN Money.

Zulily customers (myself included) complained of long shipping times and being overwhelmed by the vast number of products on offer. It’s likely that those types of issues discouraged customers from coming back.

Although the demographic that Zulily and QVC appeal to is different, what the two companies offer consumers is the same. “Both offer deep discounts for a limited window of time,” Forbes said.

QVC and Zulily will continue to operate as separate brands, but the hope is that Zulily can mimic and recreate its own version of QVC’s powerful consumer brand, which has won it a strong following of loyal shoppers.

“This is QVC’s core. This is what they do. They create community,” said Rosenblum. “If you don’t know why you aren’t getting repeat customers, you can leverage this community to help you figure out what you’re doing wrong.”

QVC can also learn from Zulily, which has an in with a shopping segment that’s desirable to QVC – moms in their late 20s to early 40s.

Like many young mamas I know, I have made several purchases on Zulily. I love that I can get unique clothes and toys, and even household items, that I wouldn’t normally come across while shopping. It’s not unusual for me or one of my mommy friends to find something cool on Amazon, then email the link within our circle of friends so we all have the opportunity to purchase it, too.

But I have the same complaints as many other consumers. Zulily typically has long shipping times and a site that is overwhelming in its offerings.

Do you shop on Zulily? What do you think of QVC’s parent acquiring the retailer? Share your comments below or on our Facebook page.

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