Tough times for Fab.com, a design e-commerce site that’s raised $US336 million.
In the past two months, the company has fired 37% of its employees. When you look at its recent Web traffic decline, it’s not hard to assume why.
While the quality of users is much more important than the number of users visiting an e-commerce store’s site, Fab’s traffic has dipped about 75% over the past year, according to Hitwise data.
In September 2012, Fab.com received 4.2 million visitors. In September 2013, that number dropped to 1.05 million.
We pulled numbers for a few of Fab’s competitors in the flash sales space, since that was a large part of the company’s mission until April 2013. (Since its most recent layoff of 100 employees, Fab has said it won’t concentrate on flash sales anymore.) Fab’s traffic has taken the greatest dip of all them by far. Although flash sales as a category doesn’t look great by any stretch. Hautelook, Ideeli, and RueLaLa traffic is down year-over-year too.
The one company that looks well positioned is Zulily, which just filed to go public. Its traffic is leaps and bounds above the other companies, reaching 16.9 million visitors in September 2013 versus 11.6 million in September 2012.
Part of Fab’s traffic decline is due to the company’s decision to spend less on marketing this year than last.
Last year, Fab spent $US40 million, or 35% of its revenue, on marketing, according to Bloomberg’s Sarah Frier. Jason Goldberg, Fab’s CEO, pledged to spend less than $US30 million this year on marketing.
“I have said publicly that I wish we had about $US10M of marketing spend from last year back in our pockets — online ad spend we wish we had spent more efficiently in hindsight,” Goldberg wrote following Frier’s article. “That’s all part of learning and improving.”
Also, just because Fab’s site traffic is down a lot, that doesn’t mean the quality of its visitors has decreased or that they’re buying less.
When asked about Fab’s declining traffic, spokesperson Deborah Roth replied: “In e-commerce, especially at Fab, it’s about quality of customers, not quantity. And we are VERY happy with the quality of our customers (they’re buying, repeatedly).”
Roth did not specify how repeat buying has been trending year over year, or if the site’s down traffic has taken a negative toll on the number of purchases made on Fab.com.
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