Flash sales retailer SecretSales has spent the last eight years building up an exclusive luxury goods discount club using eCommerce tools and data analytics. Its bespoke algorithms provide customers with a personalised experience, recommending luxury goods based on their browsing and purchasing history.

SecretSales.com was the first flash sale site in the UK and it really took off during the recession, when luxury goods shoppers realised they needed to tighten their fashionable belts, while still treating themselves to beautiful products without the price tag.

"We felt we were able to bring this luxury element to the customer," says SecretSales co-founder Sach Kukadia, who explains the company orders items from brands once a sale is complete, meaning Secret Sales is never left with residual stock.

"Now the economy is improving, this customer who has been taught to reign in is now feeling more confident and is happy to spend more, but they haven't gone back to wanting to buy it full price."

"A lot of customers try to keep us a secret," Kukadia tells Essential Retail. "They feel they are a smart shopper and happy to boast about the bag, but not so happy to disclose where it is from."

Kukadia says the business relies on immediacy, spontaneity and emotion which online retailing provides. "Being able to be flexible by being online, it allows us to push notifications to customers any time throughout the day," he explains. "It's absolutely imperative for us being online or we wouldn't be able to communicate in this way or understand what our customers want and move the customers forward in terms of buying behaviours."

"Being online gives you flexible walls – a million or a hundred products – and we want them to feel as if they're part of this exclusive club," he adds.

And the SecretSales platform has certainly succeeded in providing the feeling of exclusivity. It's most recent full year financial results ending 31 December 2014 disclosed increased registered members by 22% to 3.7 million. Revenues increased 39% to £25.2 million, while 60% of revenue is now generated via mobile devices (up from 50% in 2013).

The business model requires potential customers to sign-in to access deals and are then sent emails relating to the types of goods they are interested in. Most of the site's traffic comes from these emails so it is important to get them correct.

"The aim is to give them a personalised experience," says Kukadia."We launch 15 sales per day, but we don't want to target them all to every individual."

The SecretSales technology team has developed an on-site algorithm to track customer behaviour to gain intelligence. 300 million unique user journeys have been tracked since the beginning of the year, which sit in a data warehouse, feeding into the SecretSales CRM system. A second algorithm then feeds this information into tailored newsletters which are sent out to customers.

The business is also looking to build another algorithm which will allow it to personalise the homepage.

"This is not as straight forward as the emails," explains Kukadia. "We're trying to focus your attention – imagine shopping at Selfridges and everything is laid out exactly how you want with what you want in front of you."

Talent

The technology team, which builds nearly all of the e-tailer's technology, is currently 15 people strong. But Kukadia, along with his co-founder and brother Nish, is looking to increase this by 40-50% as the company continues to research different technologies and to provide a bespoke retail experience.

But hiring that number of talented developers is not going to be easy. Kukadia says the good engineers in London all want to work for the next Facebook and are hard to attract. SecretSales is working hard to change this mentality, it offers its developers hackathons to work on projects that excites them and it has moved them onto a separate floor away from the noisy sales team, as it realised the nature of their work is very different.

"They have to feel really passionate about the stuff they're coding," he says. "We've approached our strategy with a new line of thinking which allows the teams to work as white blood cells and attack problems from the front line rather than dictated top down."

But Kukadia says it is the speed at which technology is moving that is providing the big challenge for the retailer.

"It's hard when you have wearables like the Apple Watch and Google Glass," he says. "But it's an exciting challenge to try and understand how we can potentially encourage consumers to shop on a wearable, it's something we think about a lot."

And what about launching a bricks and mortar store? "It's certainly crossed my mind," said Kukadia.

"We've explored pop-up shops, but at this stage our focus needs to remain online – that's where we have a lot of opportunity."