Social Commerce

Social Commerce Platform Overview: Gilt Groupe – Fashion Meets Flash Sales

1 commentNovember 11, 20115 min read

Headquartered in New York, Gilt Groupe is a membership-based e-commerce site that runs daily private sales of high-end designer apparel, accessories and home furnishings, often discounted as much as 60% off retail.

Gilt Groupe includes merchandise for men, women, children and the home from brands like Calvin Klein, Starbucks, Target, 7 for All Mankind, Anzie & Candela, Alice + Olivia, and GANT. In addition, the brand offers deals based on geographic location (Gilt City), food and gift items (Gilt Taste and Gifts), and travel (Jetsetter).

Through a consistent stream of acquisitions along with liberal amounts of investment capital, Gilt Groupe has leveraged itself into the number one spot in front of competitors such as Beyond the Rack, HauteLook, Rue La La and Ideeli.

Flash Sales

Gilt falls under a category of shopping known as “flash sales.” In case you are unfamiliar with the concept, flash sales are time-limited offers consisting of highly-discounted merchandise.

In Gilt Groupe’s case, each shopping event is designer-specific and held over a period usually not longer than 36 hours. An email to members announces the start of each sales event and orders are taken on a first-come, first-serve basis.

Motivation for Retailers

While the high discounts provide ample incentive for consumers to use the site, what would motivate retailers to include their products in Gilt Groupe’s flash sales events?

According to a New York Times article – Flash-Sale Site Shifts Its Model – the initial motivator was the 2009 recession, which caused the wealthy to make spending cuts. That’s no longer the case. “[E]ven as the economy sours again, sales of full-price luxury goods are booming,” said the Times.

There are more persistent motivations, however, including that of using flash sale sites like Gilt to liquidate unsold or off-season merchandise. “The retail-offload system has emerged as one of the most economical, yet profitable, transaction systems for retailers,” said business journalist Amanda Grenword. In addition, some brands and retailers are now using them as an “event shopping” platform, creating an event to support a product launch.

Social Commerce Tie

There is a definite tie between flash sales and social commerce. In Gilt Groupe’s case, it’s two-fold:

First, Gilt is a social business. Recruitment is powered primarily by a member-get-member program, and tightly integrated with social networks. The site also enables social sharing of sales events and products.

As a case in point, when I first become a member I received an email encouraging me to invite friends in exchange for a $25 discount. Though focused on inviting contacts via email, there were options to share it on Facebook and Twitter, as well. There are also “tweet” and “like” options on product detail pages.

Second, Gilt Groupe maintains a highly-touted Facebook store. “Gilt Groupe’s much-hyped Facebook store is the most functional, content-rich store I’ve seen yet. It features all the written content of its regular site, including a few extra goodies missing from other Facebook stores,” said content specialist and visual journalist Elizabeth Olmsted. (For more information, read the October 7, 2011 SCT article on Gilt Groupe’s Facebook store.)

“The Gilt Groupe Facebook store is also a blend of everything trendy: daily deals, group and social buying, and F-commerce. And for a trend-focused brand, this is a perfect mix,” added Olmsted.

Why Choose Gilt?

Faced with a number of alternatives – from Facebook fan-stores to Group-Buy platforms and social POS (point-of-sale) solutions, why should brands and retailers consider Gilt as their social commerce platform? Firstly, Gilt is an aspirational brand with a more upmarket feel than the Groupons of the world, so as well as creating word of mouth buzz, the halo effect of Gilt may help build your brand. Secondly, unlike Facebook fan-stores, Gilt has broad reach – 3.5 million members – most of whom will not be fans or customers – yet. The opportunity is to build new fans and customers from Gilt’s member base.

Sample Screenshots

Gilt Groupe by the Numbers

The company was founded in 2007 and has 3.5 million members;
Gilt Groupe’s most recent speculated valuation was at $1 billion, according to Crunchbase;
Gilt has experienced five funding rounds totaling $236 million;
Announced just this week, the company is expanding sales internationally to over 90 countries.

Company Information

Gilt Groupe was founded in 2007 by long time friends, Alexis Maybank and Alexandra Wilkis Wilson. The two sought to take what was a New York exclusive – invitation only sample sales – and make it available to the entire US via the Internet.

Gilt Group Management