NEW YORK (TheStreet) -- When Bezar launched in January, Bradford Shellhammer intended to create a space for designers to sell their products through pop-up shops. Each day, consumers could view a new group of designers and buy their products for a set period of time.
But consumers kept emailing Shellhammer asking him to reopen a previous pop-up shop. One Chloe and Isabel employee had bought a picture for her daughter from Bezar, only to have her son request a similar one. So Shellhammer reopened that pop-up shop.
That happened enough times to make Shellhammer reconsider his model. Now, just ten months after Bezar first launched, it's adding a marketplace called Storefronts that will feature products for longer periods of time on top of its pop-up shops.
While it may not be uncommon for an early-stage startup to pivot and try new models, the Bezar story seems to demonstrate a larger shift in the e-commerce world. Flash sales just aren't enough if you're trying to compete against the likes of Amazon(AMZN) - Get Report and eBay(EBAY) - Get Report for even a small slice of the e-commerce pie.
Groupon(GRPN) - Get Report , Gilt, and LivingSocial have all gone through recent rounds of layoffs as the flash sales space gets increasingly challenging. To be sure, there is a difference between sites that offer limited-time discounts and sites that offer limited-time products, but all of these sites share the existence of an expiration time. These fleeting sales and deals may have once been popular, but times seem to have changed.
"The excitement over flash sales has ended," said Gartner analyst Gene Alvarez. "These guys now have to compete by either providing an outstanding experience or having products that are exclusive."
There are so many options of places for consumers to buy from, that most don't stay loyal to just one site anymore, Alvarez said. That makes it challenging for someone like Bezar to grow its repeat customer base.
Bezar's new Storefronts marketplace
While Shellhammer is loath to call Bezar's pop-up shops flash sales, he admits that there are similarities, especially when it comes to their challenges. Namely the fact that if a consumer comes for a pop-up shop, but then would theoretically be interested in shopping around some more, there's nowhere for that customer to go. Now with the marketplace, that customer can browse and make some purchases.
Groupon, too, seems to have acknowledged this specific challenge with its introduction of Groupon Stores in March, a more traditional marketplace where consumers can buy an actual product, without any time constraints.
Another challenge that flash sales sites face is getting the personalization aspect just right, according to Patrick Connolly, a principal analyst for ABI Research. Flash sales sites tend to not be tailored enough to each shopper, Connolly said. Customers may find a daily deal not to be relevant to them, and then they'd have no alternative for that day.
But then again, if a flash sales site personalizes too much, it runs the risk of alienating customers who are interested in browsing, creating a catch 22 and prompting sites like Groupon and Bezar to attempt to master both sides of the coin at once.
And then there's the issue of maintaining a daily supply of exciting and new products or deals.
"It's really hard to procure enough inventory on a daily basis, it's hard to procure and photograph all that inventory efficiently, it's hard to keep engaging customers who are so jaded," Forrester analyst Sucharita Mulpuru-Kodali said. "The business isn't going away but they've just been overused and oversold so they've likely peaked."