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The rise of Zulily — the online retailer that specializes in products for kids, moms and the home — is one of the most impressive stories in Seattle startup history.

CEO Darrell Cavens
CEO Darrell Cavens

The 4-year-old company now employs 1,700 people, not including more than 2,000 workers at its giant fulfillment centers in Nevada and Ohio. More than five million orders were placed through Zulily during the second quarter, more than 50,000 per day, with net sales of $947 million, a number which is expected to top $1 billion this quarter.

Many have wondered how Zulily made it this far, this fast — especially considering that other flash sales sites such as LivingSocial and have struggled. And then there is the fact that Zulily is thriving despite slow shipping times, an oddity that seems to run counter to our immediate gratification society.

Now, the company is sharing some of its special sauce, with the executive team speaking at an analyst day today at its mammoth fulfillment center in Lockbourne, Ohio.

“I think we have something pretty special here,” Zulily CEO Darrell Cavens said at the analyst meeting.

The uniqueness of Zulily stems from the fact that the company is offering differentiated boutique products that can’t be found elsewhere, almost creating shopping as a daily habit or a fun past time. It’s not necessarily about customers getting products immediately.

zulilyproducts“If you are out there looking for a fire truck for your son, we are probably not a great place to come because it is highly unlikely today that we have that exact particular fire truck,” said Cavens. “So much of the excitement of Zulily is about what’s new. It is about what’s fresh — it is differentiated, unique products. And so I don’t see the day where we try to be the everything store. We are very much focused on that boutique shopping experience, where you are coming in and discovering unique and different products. It is worth your while to come today, because you are going to find something special.”

For example, the company currently is working on a special promotion for American Girl products tomorrow.

Customers who want a particular American Girl doll or accessory will likely go elsewhere, but those who want something special can tune into Zulily, Cavens said.

“It is that storytelling and entertainment, much more like media engagement than your typical shopping,” he said. “I don’t see us changing the model. I think we will keep getting better and better at shipping. I think we will have great offerings, if you need something for a birthday party this weekend for you son, we are going to make sure that we have a way to get there, if you really want to buy it from us. But we are not going to change the model. You see the numbers. It is working pretty well, so we are going to stay focused there.”

Just so you have it, here’s a look at those numbers that Cavens referenced:


Not bad for a company that was launched just four years ago, starting with a product fulfillment line out of the back of Seattle venture capitalist Dan Levitan’s offices at Maveron.

Zulily says its customer base skews more from the Midwest and the southeast.

Interestingly, despite the growth, which includes Wednesday’s announcement of a new 800,000 square foot fulfillment center in Pennsylvania, the Zulily team doesn’t really bump into many other competitors.

Speaking to analysts today, Zulily co-founder Mark Vadon noted that there are probably more flash sale sites operating today than 12 months ago. “And, yet, there is no change in the customer behavior,” he said. “When we talk to (customers) one-on-one, and we ask them about other flash sale sites, they don’t see them as substitutes for what we are doing. You start asking them about it, and they almost get confused.”

Cavens added that if you ask customers what other sites are similar to Zulily, the answer is somewhat comical.

“They are like: ‘There’s another one?’ They don’t look at us against other sites. They talk about the large big box department stores, they talk about Amazon, they talk about going to Google and trying to find something. That is the competitive set that I think we are up against.”

Editor’s note: Zulily co-founder and chairman Mark Vadon will be a featured speaker at the GeekWire Summit on Oct. 2. Tickets and details here

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