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Feb 20, 2009 | Comments

Gilt Groupe is one of those sites that I never saw coming. No coverage on Tech Crunch. Hardly any blogger mentions. No Silicon Valley funding. But  it’s damn popular for a start-up under a year old: 417,000 visits last month; the perfect example of Nascar Blindness.

Gilt Groupe is not a web 2.0, social media, or long tail success story. No community or Twitter. Every blogger preaches that there are “new rules” for competing online. Well, Gilt Groupe is ignoring the “new rules” and staying true the old ones.

What is Gilt Groupe?

Gilt Groupe is an online sample (fashion) sale. Access is invite-only, limited to friends of other Gilt users (a la Gmail invite-only access). The sales are announced by email a week ahead of time. “Gilt Groupe offers several new designer sales each day, with most sales lasting 36 hours or until everything is sold.” (via VentureBeat). “The sample sale truly is a phenomenon that generates mass hysteria in the city,” CEO Alexis Maybank said. Gilt Groupe is an “opportunity to take it to a national audience” (via RedHerring).

And it’s crazy addicting (so I’m told). A popular sale eerily quiets my office. I’ve witnessed a director at Amex, during a meeting, open an email alert of the latest Gilt sale on her Blackberry. It must have been good–she excused herself from the meeting to run to her computer.

Following Old-World Rules

Browse Gilt Groupe. It’s almost as if the founders ported the physical shopping experience to an online environment. The “air of exclusivity” is maintained by the invite-only policy. Like sample sales, the site is no non-sense. People know what they want–the shopping experience is purely pictures and prices.

Digital experts argue that there are new rules for competing online. This includes many of the buzz topics of late: conversation, relationships, dialogue, engagement, social media, etc. Gilt Groupe does none of these. The site is ugly, designed as if it was 1998. No familiar nods to social media. And this is perfectly OK.

We must not apply the same web 2.0 formula to every site, brand, or category. Gilt works because it kicks ass meeting its customer needs: bring the sample sale to a national, scalable audience. Think it needs a community or “customer dialogue?” The reality is that Gilt’s customers don’t care, and it surely would not match the essence of the callous sample sale.

In short, the “new rules” are irrelevant if your customers don’t expect them (and definitely don’t use them). Gilt Groupe’s success is built by remembering that the old-rules worked for a reason, and exporting the traditional sample sale to an online platform reaped huge customer value. No new media. No “dialogues.” Just happy customers.

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  • I just stumbled upon this recently and I was impressed. It is a huge frenzy. 

  • Life of F Bi

    well done on having a well optimized site, i found this searching "gilt group marketing".

    i don't want to offend because i think you do have a good sense of UI but having been following gilt for a while and heard interviews with the team, i would dare say the post under-sells their focus on UI. they do a lot of thinking of behind the sales funnel, and exactly what buttons to put where to help someone purchase under 2 minutes.

    you're spot on about product-market fit. they kill it here. with the founding team's background, i'm not surprised. they knew what problem they had to solve at the start and it they've iterated but haven't deviated from it.

  • @Rach: I agree with Gilt's product, but if anything it seems superficial. A deep product, at least in Guy's sense, would tackle every customer need. I believe that Gilt is closer to Seth Godin's assessment of "choosing your customers." Gilt consciously is ignoring many of the deeper needs of customers and focusing on those customers that are there purely for fashion. You probably know exactly what you want on the site; there's no need for a dialogue among yourself, Gilt, and other users.

    In terms of cross sell, other companies, such as AXP, are just as guilty. It's so easy to assume what is relevant for a customer and effectively exploit the customer relationship, spamming them with un-wanted marketing. You're right, I've yet to Gilt go down this path.

  • love love love gilt. the nice thing about giltis that it truly is all about the product. to your point - at the end of the day if your product is amazing, that is what counts. there is a great article on open forum by guy kawasaki on what makes a new product successful. one of his key points is that the product must be deep, in the sense that it meets the needs of your consumers on every dimension. gilt does that, and that is why it has such a following.

    many other sites like guilt exist - ideeli.com, ruelala.com, but they have made their platform a marketing channel with all sorts of cross-sell. As a marketer, you think that's a brilliant idea - you have a captive audience so why not make the most of it. However, if you are trying to create a 'gated' feel, cross sell of any kind simply sucks the cache out of your product / service.

    Long story short - gilt knows what they are doing when they don't opt for flashy and fancy. They are focusing on bare bones, but the most important bones, so their product is exactly what you want, and nothing more.

  • @amber: I think of Gilt as very similar to Woot.com, a deal of the day site with the same premise--products are limited quantity and available until they sell-out.

    But I suppose that this is the calling of every sample sale. I've only been to a sample sale once--and the line was around the block. Regarding chat, what if there was a forum for the sale preview...so that people could discuss the designer, their opinions of the fit/style, etc.? Wouldn't that add to the buying experience and the excitement that prevails when the items are for sale?

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