Hats In 1993, Ben Fischman was a college student who realized, while observing his classmates at Boston University, that there was an opportunity in the hat industry baseball. He noticed that many students, like himself, only wore 1 or 2 caps because the rest of their hats didn't fit properly. Consumer needs were not being met. “We all owned 30 to 40 hats, but we only wore one or two because they were the only ones that fit well. There was a total misunderstanding by the industry about what the customer wanted,” Fischman later said. What started as one mall kiosk quickly grew into 350 stores where the baseball cap consumer could get each team's cap in any size he needed. Lids Corporation was based on consumer needs. FischmanRetail stores were left with excess inventory due to lackluster sales and used online commerce stores as a point of sale. Some of the other major flash sales competitors include Zulily, Guilt Groupe, Haute Look, and Beyond the Rack (see Exhibit 1). Fischman's Rue La La wasn't the first such website on the scene in 2008, but he says it's not a problem in the business world. Describing the philosophy of his business idea, Fischman says, “A good business idea is not one that anyone has ever thought of before… take an existing business and figure out how to do it better. How can you take what people are passionate about and do it in a unique way?” (Johnson, 2011). Rue La La increased its membership to over one million in the first 18 months despite existing competition. IBISWorld expects more competition in next 5 years in an already highly competitive industry. Also fueling a change in the flash sales sites industry is the recovery of the United States. Just one year later, in October 2009, e-commerce service provider GSI Commerce has purchased Retail Convergence Inc. for $350 million. GSI Commerce CEO Michael Rubin said at the time: “Rue La La's short, intense events are fun and engaging. They have proven to be an effective solution for brands and retailers to sell significant opportunistic products in a compressed time period” (Evans, 2009) remained to manage Rue La La and SmartBargains.com, reporting to Rubin. In March 2011, GSI Commerce was acquired by eBay, which it also has a 30.0% ownership of rival flash sales site Gilt Groupe. In that $2.4 billion transaction, Retail Convergence, including Rue La La, was spun off as an independent subsidiary, with eBay retaining a 30.0% stake. eBay has folded ShopRunner, a members-only shopping service, and Rue La La into a new holding company called Kynetic. The fledgling company was initially run by GSI founder Michael Rubin. eBay CEO John Donahue said at the time of the purchase: “What we see happening today is that commerce is changing rapidly. The boundary between offline and online commerce is blurring at an astonishing rate.” A shift is underway in the retail industry as companies work to achieve new goals