Exclusive: Gilt Groupe: Five Million Members and Growing

Gilt Groupe continues as a forerunner in e-commerce as it expands its original flash sales site for women's luxury fashion not only into other apparel categories including men's, kids and baby, but into a variety of other products and services including home dÉcor (Gilt Home) food and wine (Gilt Taste), travel (Jetsetter), city-based activities (Gilt City) and more.

Apparel's publisher Susan Nichols sat down with Alexandra Wilkis Wilson, co-founder and CMO for Gilt Groupe, at the recent Executive Summit of the American Apparel and Footwear Association (AAFA) to talk about the firm's current successes and future direction.

Apparel: How will Gilt Groupe continue to evolve the flash sales site model for luxury goods and what will it take to keep it fresh?
Alexandra Wilkis Wilson:
We have grown very quickly from our launch in November 2007. Pretty consistently since our launch our members have grown accustomed to seeing us launch new businesses and continually work hard to innovate within the existing businesses.

Yesterday we actually sold an Infiniti car on the site and when I last checked we had over 7,000 waiting people on the list for the car. Our motto is to surprise and delight and I think that's important to keep the site fresh. Customers expect the unexpected on our site because I think they do see us as an innovator and a creative online retail channel and now as a lifestyle platform. We started focused on women's fashion and moved very quickly into many other categories. We also started shipping internationally and now are shipping to 100 countries.

Apparel: In what country are you getting the most traction?
Wilkis Wilson:
We have Gilt Japan, which we launched in March 2009. That is a full-fledged business based in Tokyo and the site is in Japanese and we sell in yen, the local currency. In terms of shipping from the United States, we are getting the best traction in Australia, Hong Kong, Canada, Singapore, Russia and the U.K. My personal thought is that this is due to a combination of tax rates and because, except for Russia, these are English-speaking countries. A customer in Australia, for example, pays zero taxes to have something shipped to them. It's a very sophisticated country for online shopping, as is Canada.

Apparel: What is your most innovative tactic to continue getting the right mix of luxury goods and customers?
Wilkis Wilson:
I think we're very much leaders in mobile and we felt it would be an important growth channel for us before we got active in it. We've been delighted with the response. On weekends and holidays we'll see up to 30 percent of our revenue coming from mobile, so that means iPhone, iPad, Android and (other avenues of) m-commerce. Our apps are very user friendly; it's frighteningly easy to shop on our apps!

In fact, because we had such a viable iPhone app, Apple actually invited our engineers out to the company so that when Apple launched the first iPad, Gilt could launch its Apple app for the iPad at the same time.

We have an amazing team of internal engineers and this comes from our roots. We have five co-founders, two of whom are engineers and we've always had a huge amount of respect for technology. Our business wouldn't be what it is today and what it was from the get-go without having such creative and talented technologists involved with the site. This is the first time I have been involved in a business that is so tech reliant. I have learned a lot about technology and also discovered that top engineering talent likes to follow other top engineering talent, and because we had such great co-founders they were pretty successful in recruiting other really bright people.

Apparel: I understand Gilt Groupe is able to personalize daily emails to its members based on nightly analysis of browsing and buying habits, which is contributing to sales conversion increases of 9 percent to 10 percent. Can you tell us more about that?
Wilkis Wilson:
Every day we're doing 22 sales, 156 sales a week, so we don't have the space in an email to list every single brand. We are in the fortunate position of being able to collect so much consumer data because no one can visit Gilt Groupe without being a registered member. We're just scratching the surface in terms of how we use the data intelligently for our business, but we're getting more sophisticated. So not only do we see customers' purchasing behavior, but we see items that the customer views, maybe puts in her cart and chooses not to buy. So based on these algorithms, different members will get completely different emails. The order of the categories has an impact, certain brands will be mentioned, etc.

Apparel: What's the typical profile of the Gilt Groupe consumer?
Wilkis Wilson:
Our customer base has grown significantly since our launch. When we launched the business, my co-founder Alexis Maybank and I were effectively the target customer, but that customer has evolved.

Today I would say the average customer is in her mid-20s to mid-30s, highly educated, professional, high household income, urban, pretty sophisticated in terms of being brand savvy, doesn't have a lot of spare time, and is comfortable buying online, either from a desktop or mobile. Our top shoppers, which we call Gilt Noir shoppers, tend be a little older, say 35 to 45. Seventy percent of our membership is female and I imagine that number will continue to decrease as we continue to launch more gender-neutral businesses, such as Gilt Taste and Gilt City.

Apparel: How important is social media to your membership base?
Wilkis Wilson:
It depends, since we have over 5 million members. But social media is becoming more important every day. If someone were to post a comment or complaint on Facebook for example, it's very likely someone from our customer service would respond directly and take the conversation offline, which is pretty innovative.

Apparel: In looking at the category of apparel specifically, how important is it to continue to broaden the designers and brands with whom you work?
Wilkis Wilson:
It's very important to continue to offer the best brands we can and the best assortments within those brands. We spend a lot time passing on opportunities to work with brands. We probably say no even more than we say yes working with the brands, which I think is probably unnatural in the off-price industry. But our buyers come from full-price environments and really want to make sure our site upholds our own brand image, and we want to make sure we are buying the most relevant product for our customers.

Apparel: Will Gilt Groupe continue selling fashion at a discount, or explore other price models?
Wilkis Wilson:
I think we're always open to experimenting. We launched Park and Bond as a full-price men's site. We have no plans to launch a full-price women's business, but we will offer full-price items for women that are a special or unique opportunity, whether it's first access or a special collection, for example. On our home business and on Jettsetter, we actually do a lot of full price and Gilt Taste is predominantly full price, which I think is pretty interesting that were able to do that given how we started.

Apparel: What advice do you have for brands and designers that would like work with Gilt?
Wilkis Wilson:
We are always open-minded to brands that are creating great products, so the product will speak for itself. When it's an emerging designer, our buyers do pay attention to current distribution and that's a good way to see how it might sell. If it isn't distributed anywhere, that doesn't mean we won't consider it, but it just means we'd be even more stringent.

Susan S. Nichols is publisher of
Apparel and may be reached at [email protected].

Editor's Note: Gilt Groupe co-founders Alexandra Wilkis Wilson and Alexis Maybank have co-authored the book, "By Invitation Only: How We Built Gilt and Changed the Way Millions Shop," which was released April 12. It is available on giltfounders.com and amazon.com.
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