Over 10 years, the pioneer members-only flash-sale concept OnTheList has reached 10 markets across Asia and the Middle East by solving a major problem for brands – and appealing to a fundamental consumer trait. 

“I’m a true believer that wherever in the world you react the same with discounts,” shares co-founder and CEO Delphine Lefay Dultzin. 

For Dultzin, a guest on Inside Retail’s Retail Transformers video series hosted by Amie Larter, that consumer philosophy dovetails perfectly with a problem Dultzin and her husband and co-founder, Diego Dultzin Lacoste, identified 11 years ago: How do you move out-of-season or unsold inventory without damaging your brand value?

In 2018, a British luxury label sparked outrage when it admitted in its annual report to burning nearly £28.6 million worth of unsold handbags, clothing, and perfume to protect its brand exclusivity, a colossal misstep that rival brand Coach replicated to similar levels of consumer fury three years later.  

“OnTheList was built on a simple but powerful insight that luxury brands had beautiful excess inventory and no good way to move it,” Dultzin explains.

The couple started out in Hong Kong in 2015 with a credit card and a laptop, both holding down full-time jobs at the same time as they built the OnTheList concept: Offering premium and luxury brand products exclusively to members at highly discounted prices, first in physical flash sales, later online as well, but always curated and publicised only among the membership base. Since launch, Dultzin calculates the company has saved 9.2 million items from destruction or landfill.

Members get access to truly exclusive offers; manufacturers avoid the ignominy of brazen SALE signs in store windows, or the logistics of organising events for existing customers, potentially undermining sales of their full-price range. 

It took the couple four months to get the first client on board, the local distributor of French label BA & SH. Correspondingly, it took a leap of faith on that company’s part. “We were lucky. The distributor at the time wanted to stop and had an excess of stock.”

After that sale proved a success, Dultzin and Lacoste had established the credibility to attract other brands, building trust in what she describes as “a virtuous cycle”. 

Key to OnTheList’s success is an understanding that image is very important to premium and luxury brands. 

Having spent so much time taking care of their image, customer brands need to ensure that sales are well organised, not broadly promoted, and that, at the event, there aren’t clothes all over the floor.

After early success in Hong Kong, it was OnTheList’s clients who drove expansion into markets including Singapore, China, Malaysia, Australia, South Korea, and, most recently, Saudi Arabia. Their challenge was the same: Moving inventory that was no longer core to new seasonal campaigns.

OnTheList started out by holding sales at pop-up locations before opening its own showrooms, then expanded online in 2017. Typically, the company hosts around 3000 customers a week in physical stores.

“When we started online, people were telling us it would not work, because people want to come to touch and see their products. Now, we do 50 per cent of our business offline and 50 per cent online. Some brands are not okay with being online, so we have some brands exclusively offline because they want to protect their image.” Online works particularly well for cosmetics, wines and spirits or other lifestyle categories.

“Some of our customers are 100 per cent online. They will never travel to a shop because they don’t want to be seen there or don’t have time, and some customers will come exclusively offline. 

“But we have a small portion of customers that we call ‘O2 otherwise’. We try to encourage this behaviour more. But you can see very different types of behaviour depending on the customer,” she continues. 

Online or offline, the OnTheList concept is the same: Creating urgency and fostering a fear of missing out.

• Watch the interview online, where Dultzin talks about how OnTheList’s customer demographic is changing, how the company is embracing sustainability, and how it builds trust with both brands and consumers. “The flash sale model lives or dies on trust.”