Digital retail was supposed to put brick-and-mortar chains out of business. Certainly, some physical retailers have struggled and failed. Bed bath and beyond. Christmas Tree Shops and Tuesday Morning filed for bankruptcy and ultimately closed just this year.
Selling online and not having to pay in stores allows you to get lower prices. However, it also causes problems, as consumers do not always like what they order and returns are very expensive. Additionally, once a customer has to return an item, they lose the convenience advantage that comes with shopping at a digital retailer.
Related: Amazon, Walmart and Target have a secret return policy
Online retailers were supposed to be disruptive, but in reality, the total percentage of retail sales that have moved digital has hovered around 15% in recent years. The figure rose to 20% during the Covid lockdown period, but returned to the 15% range when things returned to normal.
The online-only retailers that were supposed to disrupt the market—companies like Wayfair and Stich Fix—have actually struggled to survive. Now, another once-promising online retailer, Zulily, has suddenly shared with customers that it is closing for good.
Image source: Getty Images
Zulily is having a business closing sale
Consumers have been reluctant to buy clothes online. This is probably because people like to touch and try on clothes before buying them.
Zulily attempted to overcome that reluctance by offering a unique business model. The company used a daily deals model. At first, it featured clothing for women and children, but later expanded to include men.
Unlike Amazon, Target, and most retailers that sell online, Zulily did not offer fast delivery. That was literally part of their business model.
“The secret to our deals is in our shipping. We wait and bundle items from multiple orders, using fewer boxes. Then, we pass the savings on to you. Sometimes it takes a little longer, but our customers say it's worth the wait” , the company shared on its website.
That model clearly didn't work, as the company abruptly announced on December 9 that it was going out of business.
“All sales are final during Zulily's going out of business sale,” the website reads. “FINAL SALE. All items must disappear,” the company posted.
Zulily laid off 800 workers
Signs of the company's troubles emerged on Dec. 7 when the Seattle-based online-only retailer abruptly laid off about 800 of its staff. In addition to laying off workers, the digital retailer closed its Seattle headquarters and two warehouses. GeekWire reported.
The company has not shared its impending closure on its Facebook page, which includes this description of its business:
“Find affordable items from the brands you love, without the hassle of sifting through countless shelves.”
The company hasn't posted on X, the old Twitter, since May.
Zulily has not shared what its last day of operation will be.
GenUi, a software development consultant, sued Zullilly earlier this month “alleging that Zulily violated contractual obligations and owes the company $191,776 for work completed earlier this year.” GeekWire also reported. “GenUI has worked for Zulily since 2017, but starting last April, Zulily began falling behind on monthly payments, according to the lawsuit filed in King County Superior Court.”
