October 1 (Bloomberg) -- Mary DeRosier had a choice. This summer, during one of the worst heat waves in Chicago’s history, the 60-year-old music teacher had to decide whether to go on vacation to someplace cooler or stay at home and buy antiques from home shopping website One Kings Lane. She chose the latter. “I didn’t want to go on a trip because I didn’t want to get bed bugs and I didn’t want to get yelled at by some flight attendant,” she says. “I decided I’m going to spend my vacation money on shopping instead. And I’m telling you I had plenty of fun.”
DeRosier jokingly calls checking the site every day for deals “my biggest problem and my biggest joy” and “part of my midlife crisis.” She’s not alone. Some 15 million Americans suffer from shopping addiction, according to the American Psychological Association. “Research suggests the Internet is a really fertile ground for the development and maintenance of compulsive buying disorder,” says Dr. April Benson, a psychologist in New York and author of To Buy or Not to Buy: Why We Overshop and How to Stop. “The ease, the 24-7-ness of it, the anonymity and the vast array of products—all of those factor into the disorder.”
Flash sale fixations
Flash sale sites such as One Kings Lane, Gilt, ideeli, Haute Look and Rue La La make the shopping experience all the more enticing. Part of their addictive quality lies in the “flash” aspect of sales that last often only 24 to 72 hours. “I’ve had clients who’ve found flash sale sites almost like crack cocaine,” says Terrence Shulman, founder of the Shulman Center for Compulsive Theft, Spending & Hoarding in Franklin, Michigan. “Many clients are overshopping at traditional sites, but what makes these flash sale ones unique is they offer high-end or rare items that go quickly. So they intensify the adrenaline, and the hunt and the feeling of euphoria when people are able to snap up a deal. It’s almost like gambling, in a way.”
Although neither Benson nor Shulman will disclose the names of clients, Benson says she has ones who have been as much as $100,000 in debt because of flash sale sites. “Something about the scarcity and the need to do it right now really interferes with people’s judgment,” says Benson.
Another draw is the exclusivity of the sites, as one has to sign up to be a member to receive information about the deals. DeRosier says that isn't the reason for her interest in One Kings Lane, but later she said she was jealous that a designer friend started selling her goods on the site. “I felt like she’d stolen my secret,” DeRosier says. “I was disappointed because I was pretending the site was private.”
One Kings Lane has north of 5 million members, but the fact that DeRosier feels special using it is no accident. Chief Executive Doug Mack cites “aspirational shopping,” in which a person gets access to a class of goods and people they would normally never associate with, as the key to the site’s allure. “That’s probably more to the core of One Kings Lane than any other new commerce site on the Web,” says Mack. “For example, Michael Smith is a famous interior designer for the Obamas. He runs sales of products from his private warehouse on One Kings Lane. Another one of our designers -- Martyn Lawrence Bullard -- also has done work for Elton John and Cher. Entry to this world you could never crack from a money or access perspective is a huge part of our appeal.”
It is precisely such fantasies of an affluent celebrity lifestyle that compel most shopaholics. “One of the real drivers of compulsive buying disorder is when there is a big discrepancy in who someone feels themselves to be and who they would like to be and how they would like to be seen,” says Benson. “So buying luxurious goods and belonging to an ‘in’ website is an attempt to make up for some of what we psychologists call the ‘self-discrepancy’ gap.”
Divorced, DeRosier lives alone with her two pit-bull mixes in a condo crowded with so many purchases she says the “neighbors have started to comment.” Although she won’t disclose how much she has spent, during the summer she purchased numerous lamps, vases, paintings of dogs -- including her favorite of a five-legged one she deems “outsider art” -- and a 9½-foot-tall bookcase by interior designer Alessandra Branca that was so big it had to be disassembled to get in her door.
DeRosier feels both shame and pride in her purchases. “My sisters are going to disown me if they find out how much I buy,” she says. But One Kings Lane helps define her identity. “I’ve spent my life searching for people like me, and they’re hard to find, but they’re there -- kindred spirits,” she says. “I’ve searched my life for things that are me, and it’s not always easy to find because I think I’m different. I can’t tell you how much time I spent in antique stores. Now all of a sudden I can just sit in front of the computer and think, ‘Oh cool’ and try to figure out which things I’ll buy.”
Some of DeRosier's kindred spirits have been the site’s salespeople, including her favorite, Eric, whom she spoke with on the phone for an hour and a half when she needed to replace a broken item and with whom she has often spoken since. “I’ve never been treated so nicely by a corporation,” she says.
Beautiful haute couture design, superlative service, fancy wrapping, and “white glove” delivery are all part of the image flash sales sites seek to present. It's the sense of entering a high-end department store where the displays are designed to surprise and delight and the clerks are at your every beck and call. “I love Amazon.com, but I’ve never been excited to shop there,” says Ben Fischman, chief executive officer of Rue La La, a Boston flash sale site with 6.5 million members. “Great retail is exciting. When you walk into the first floor of Bloomingdale's in New York, it’s an experience. I believe when a member comes at 11 a.m. to Rue La La for a sale, it’s an experience. Everyday there’s something new, different and fresh to buy.”
The lure of any flash sale is also how deeply discounted the prices are supposed to be from retail. And it seems that on mass-produced items, the price isn’t always right. For instance, on September 7 One Kings Lane had a sale from Rizzoli Books, a chi-chi Manhattan book store. Alberto Pinto: Table Settings, a book by a famous French interior designer, had a retail price of $60, and the site was selling it for $39, plus $6.95 for shipping and handling. The same book can be found at Amazon.com for $37.80, with free shipping. Moreover, there’s no time limit to buy at Amazon.
On the same date, a Prada python skin tote bag sold out quickly on Rue La La for $2,999, even though a similar, although not identical, python tote could be found on the Neiman Marcus site for $1,980. Both sites claimed the retail price was much higher, but in today’s distressed economy, who actually pays retail for anything?
Savvy shoppers know to compare different sites for the best deals. “Certainly flash sale prices are good, but whenever I buy something I open up another window and check on Google and Amazon.com what it retails for elsewhere,” says Dawn Lehmann, an interior designer in Manhattan. She shops at One Kings Lane and Gilt for both work and pleasure and buys only items she would’ve bought anyway, even if they weren’t on sale.
Lehmann says that 80 percent of the time, One Kings Lane offers the best price, especially on higher-end items, but books, in particular, and other lower-end products can be found cheaper elsewhere. Most of its sales are for a limited run or one-of-a-kind items, says One Kings Lane's Mack. "We offer a Cuisinart or other mainstream brands occasionally to help consumers. We do that because consumers want to be able to buy everything for the home front at our site."
Thrill of the hunt
Even savvy shoppers feel the thrill of the hunt on flash sites, though. "I'm more educated about fashion than the average person, so I know what the price points are," says Elizabeth Fenner, former fashion editor at People and the current editor-in-chief of Chicago Magazine. Yet Fenner admits she also loves the fun of competitive shopping. "There's a rush of adrenaline, a competition thing that kicks in," she says. "Flash sale sites are very smart about that. They have engineered them to have that sense of scarcity, and it works. I definitely, when I get something, say, 'Yeah, I got it!'"
Meanwhile, DeRosier is managing to restrain herself now that school has started again. “I draw a real clear line,” she says. “I will not shop at work. I’d love to look at the site when the sales go live at 10 a.m. here. But I don’t want to jeopardize anything.” She teaches 10 classes a day to pay her bills but still has debt from her purchases. “When you shop like I do, your credit card becomes your best friend,” she says. If a best friend draws you into debt, though, some might say frenemy's a better word.