Gilt Groupe: an America's Hottest Brands Case Study

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Gilt Groupe
For many retail businesses, 2009 has been a brutal year. For startup Gilt Groupe, it's been an opportunity. "It's counterintuitive, but it has not impacted us at all," said Alexis Maybank, who launched in November 2007 with longtime friend Alexandra Wilkis Wilson. "If anything, we've just watched the hockey stick of growth get steeper. Savvy consumers are looking to stretch their dollars further. And there are more parties with more inventory on their hands or a slowdown in other channels they rely on."

Once a consumer becomes a Gilt member, usually through a friend's referral, they have access to sales events. The limited nature and duration of the sales sparks a frenzy, with shoppers anxious to snag an item before it sells out. The site began with fashion, but has now expanded to home d├ęcor, children's wear and luxury travel.

The site's sweet spot is 20- to 30-year-old women, a demographic that is particularly attractive to fashion brands, though men and consumers up to age 45 are also frequent shoppers. Gilt has primarily grown through word-of-mouth, with a $25 credit offered to members who bring in a friend that ends up making a purchase.

Alexis Maybank
Alexis Maybank, co-founder, Gilt Groupe
"It's a very fast, exciting shopping experience," said Ms. Maybank. "People come, purchase quickly and usually spend just a few minutes on our site, as opposed to other [sites] where you might browse for hours."

Just shy of its second anniversary, Gilt counts 1.5 million members in the U.S., as well as 250,000 members in Japan. The retailer is on track to tally $400 million in sales for fiscal 2010. (Its fiscal year begins July 1.)

It's also one of the few places that is hiring, adding about 100 new employees this summer alone. One of its most high-profile hires has been CEO Susan Lyne, former president-CEO of Martha Stewart Living Omnimedia, who joined last fall. Ms. Maybank says that Ms. Lyne's proven leadership record and industry contacts is key for the young company.

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