Since 2007 Gilt has introduced discount shopping in a new way. As you are aware by now, a normal sales happens only at the end of every season. Normal discount sales can range from 20 to 70 percent and people wanting to buy clothing or shoes tend to wait and say to themselves, "I'll wait until it goes on sale."
The people at Gilt saw that this trend grew large during the down fall of our economy. Time was essentially everything for Gilt's success. The company saw an opportunity and put together a team to find the best designers at a discounted price for their consumers. With the help of the internet, Gilt has marketed through social media platforms and reached people all over the world. "Business-to-business electronic commerce is the use of the internet to facilitate the exchange of goods, services, and information between organization."
Online success is measured by 3 categories. First would be Recency, which relates to the fact that customers who have made a purchase recently are more likely to purchase again in the near future than customers who haven't purchased for awhile. This is very true since Gilt is a members base website and these insiders know they are getting the best deal around. Second would be Frequency, this information helps marketers identify frequent purchasers who are definitely more likely to repeat their purchasing behavior in the future. Since Gilt's business platform is a members only e-commerce store, every member's purchases can be retrieved and marketers can react to spending patterns and habits. Lastly, our third category of measuring online success is monetary value. The monetary value of sales is important because big spenders can be the most profitable customers for a business. Gilt acknowledges their top customers and has a program that allows top spenders privileges that a normal member does not have access too.
Sunday, December 9, 2012
Sunday, December 2, 2012
Chapter 8 - Segmenting and Targeting Markets
Gilt uses strategies for segmenting markets such as psychographic segmentation. The variables of psychographic segmentation are personality, motives, lifestyles, and Geodemographics.
As a members based business, Gilt can acquire detailed information on all of their members spending patterns. They have developed internal software that can track a members favorite brands, categories, and their average sales transaction. This psychographic segmentation would fall under the category of "personality." The book states, "Personality reflects a person's traits, attitudes, and habits, Clothing is the ultimate personality descriptor. Fashionistas wear high-end, trendy clothes, and hipsters enjoy jeans and tee-shirts with tennis shoes. People buy clothes that they feel represent their personality and give others an idea of who they are." With knowing how a member shops, Gilt can adjust and or create special newsletters for a specific individual. For example, I recently purchased some ties and shoes from the website. Since then, I have noticed the new newsletters are featuring new dress shirts, socks and suits. As a marketer, you want the consumer to subconsciously say to themselves, "I just bought a tie and a shoes, maybe I need a new suit and dress shirt." Not only have they featured new categories on these new newsletters to me, but they have also featured new shoes and ties as well.
It is very remarkable that a marketer can easily react and adjust how they feature specific information based on a individuals spend habits. This approach has been proven successful. The algorithmic software is something regular retailers cannot implement. Other department stores looking to reach out to new consumers can't access these type of big-spending consumers the same way. The CEO of Gilt states, "A Sak's or Macy's can't do this because they do not have a membership-only model. The only people who can do this area are flash sales types and Facebook."
As a members based business, Gilt can acquire detailed information on all of their members spending patterns. They have developed internal software that can track a members favorite brands, categories, and their average sales transaction. This psychographic segmentation would fall under the category of "personality." The book states, "Personality reflects a person's traits, attitudes, and habits, Clothing is the ultimate personality descriptor. Fashionistas wear high-end, trendy clothes, and hipsters enjoy jeans and tee-shirts with tennis shoes. People buy clothes that they feel represent their personality and give others an idea of who they are." With knowing how a member shops, Gilt can adjust and or create special newsletters for a specific individual. For example, I recently purchased some ties and shoes from the website. Since then, I have noticed the new newsletters are featuring new dress shirts, socks and suits. As a marketer, you want the consumer to subconsciously say to themselves, "I just bought a tie and a shoes, maybe I need a new suit and dress shirt." Not only have they featured new categories on these new newsletters to me, but they have also featured new shoes and ties as well.
It is very remarkable that a marketer can easily react and adjust how they feature specific information based on a individuals spend habits. This approach has been proven successful. The algorithmic software is something regular retailers cannot implement. Other department stores looking to reach out to new consumers can't access these type of big-spending consumers the same way. The CEO of Gilt states, "A Sak's or Macy's can't do this because they do not have a membership-only model. The only people who can do this area are flash sales types and Facebook."
Sunday, November 25, 2012
Chapter 11 - Developing and Managing Products
Developing and Managing Products are something that Gilt is familiar with in so many ways. Gilt has developing a genre of business in the retail world that has been classified flash sales. This chapter discusses the importance of new product. Our book states, "The term new product is somewhat confusing because its meaning varies widely. Actually, the term has several "correct" definitions. A product can be new to the world, to the market, to the producer or seller, or some combination of these." The book lists six categories of new product and Gilt's business model of flash sales would put them in the category called Lower-Priced Products. This category refers to products that provide performance similar to competing brands at lower price.
Gilt has truly INNOVATED (a product perceived as new by a potential adopter) off price shopping to the masses through the world wide web. Normally when a consumer wants to buy something on sale, they would have to wait towards the end of the season or a special holiday sale such as "Black Friday." However, Gilt has developed a NEW PRODUCT (a product new to the world, the market, the producer, the seller, or some combination of these) by creating a web site that only sales discounted merchandise and travel destinations every second of the day. Now you can enjoy discounted prices from the comfort of your home and most importantly, any time of the year.
The GROWTH STAGE (the second stage of the product life cycle when sales typically grow at an increasing rate, many competitors enter the market, large companies may start to acquire small pioneering firms and profits are healthy) of Gilt's business since 2007 has been truly remarkable. As said in chapter 1's blog post, "Gilt has truly taken off price selling to the next level by introducing Gilt Women, Gilt Men, Gilt Baby & Kids, Gilt Home, Gilt Food & Wine, Gilt City and Gilt Jetsetter. Gilt now has 8 different divisions under the umbrella including a full price website called ParkandBond.com." The company currently has roughly 1,000 employees and plans to file IPO in the fourth quarter of 2013.
According to the Wall Street Journal, "Gilt was valued at $1 billion last May when it raised $138 million from Goldman Sachs Group and other firms. The company hasn't raised any money since then, but its valuation has hovered between $880 million to $1.1 billion, according to July secondary market contracts for Gilt's common stock listed on Sharespost."
Not only has Gilt grown, other major retailing firms such as Nordstrom's has seen a large potential in this business model by recently acquiring a similar flash website called Hautelook.com
Gilt has truly INNOVATED (a product perceived as new by a potential adopter) off price shopping to the masses through the world wide web. Normally when a consumer wants to buy something on sale, they would have to wait towards the end of the season or a special holiday sale such as "Black Friday." However, Gilt has developed a NEW PRODUCT (a product new to the world, the market, the producer, the seller, or some combination of these) by creating a web site that only sales discounted merchandise and travel destinations every second of the day. Now you can enjoy discounted prices from the comfort of your home and most importantly, any time of the year.
The GROWTH STAGE (the second stage of the product life cycle when sales typically grow at an increasing rate, many competitors enter the market, large companies may start to acquire small pioneering firms and profits are healthy) of Gilt's business since 2007 has been truly remarkable. As said in chapter 1's blog post, "Gilt has truly taken off price selling to the next level by introducing Gilt Women, Gilt Men, Gilt Baby & Kids, Gilt Home, Gilt Food & Wine, Gilt City and Gilt Jetsetter. Gilt now has 8 different divisions under the umbrella including a full price website called ParkandBond.com." The company currently has roughly 1,000 employees and plans to file IPO in the fourth quarter of 2013.
According to the Wall Street Journal, "Gilt was valued at $1 billion last May when it raised $138 million from Goldman Sachs Group and other firms. The company hasn't raised any money since then, but its valuation has hovered between $880 million to $1.1 billion, according to July secondary market contracts for Gilt's common stock listed on Sharespost."
Not only has Gilt grown, other major retailing firms such as Nordstrom's has seen a large potential in this business model by recently acquiring a similar flash website called Hautelook.com
Sunday, November 18, 2012
Chapter 16 - Integrated Marketing Communications
Chapter 16 talks about integrated marketing communications. The book's definition of IMC (Integrated Marketing Communications) states, "the careful coordination of all promotional messages-traditional advertising, direct marketing, interactive, public relations, sales promotion, personal selling, event marketing and other communications- for a product or a service to assure the consistency of messages at every contact point where a company meets the the consumer."
Gilt Groupe definitely accomplishes the books definition of IMC. Gilt acquires specific and detailed information on each of their members (as stated in chapter 18's blog post on Sales Promotion and Personal Selling) which the company uses to interact, direct market, personal sell, and build specific sales promotion for their members.
The Promotional Mix is another key formula with IMC. Gilt combines promotional tools such as advertising, public relations, personal selling, and sales promotion to reach their target market and fulfill the company's overall goal.
With advertising, the company customizes their newsletters to fit a members interests and sends them out on a daily basis. With the permission of the member, Gilt can access an individual's social media platforms such as facebook and twitter so their purchases from Gilt will be featured on the user's profile. This new generations of advertising has been proven very successful. Generally speaking, the new generation of consumers are looking to their friends for advice, therefore social media platforms are ways to feature ones interest.
Gilt's public relations has been very successful. With features or Good Morning America, CNN and other major networks, the company has reached a very strong image in the E-Commerce off price shopping category.
Sales Promotion and Personal Selling are the company's expertise. As stated in chapter 18's blog post on sales promotion and personal selling. The company has built algorithms to pull specific information such as a member's spending habits, interests, gender, age, and where they live. With this information, the company's marketing managers can react and or created specific marketing campaigns to help the overall revenue of the company.
The Promotional Mix is another key formula with IMC. Gilt combines promotional tools such as advertising, public relations, personal selling, and sales promotion to reach their target market and fulfill the company's overall goal.
With advertising, the company customizes their newsletters to fit a members interests and sends them out on a daily basis. With the permission of the member, Gilt can access an individual's social media platforms such as facebook and twitter so their purchases from Gilt will be featured on the user's profile. This new generations of advertising has been proven very successful. Generally speaking, the new generation of consumers are looking to their friends for advice, therefore social media platforms are ways to feature ones interest.
Gilt's public relations has been very successful. With features or Good Morning America, CNN and other major networks, the company has reached a very strong image in the E-Commerce off price shopping category.
Sales Promotion and Personal Selling are the company's expertise. As stated in chapter 18's blog post on sales promotion and personal selling. The company has built algorithms to pull specific information such as a member's spending habits, interests, gender, age, and where they live. With this information, the company's marketing managers can react and or created specific marketing campaigns to help the overall revenue of the company.
Sunday, November 11, 2012
Chapter 10 - Product Concepts
Chapter 10 focuses on product concepts which entails different types of consumer products, product items, lines and mixes, branding and finally packaging. These elements are some foundations to a company image and value. Gilt Groupe's business sells consumer products and the definition of consumer product is a product bought to satisfy an individual's personal wants.
Gilt Groupe has many divisions under its umbrella. The company sells men's, women's, children's, home decor and appliances, city events, and vacations. According to chapter 10, Gilt's business model offers consumers a PRODUCT MIX WIDTH. This means the number of product lines an organization offers.
BRANDING is extremely important to Gilt and the company prides themselves by offering their costumers the best deals on their PRODUCT MIX. By building a brand based on discounts, each consumer that visits and shops on the site is reassured they are getting the best deal and it is even arguable that each individual is very satisfied because of that.
PACKAGING is another element when it comes to building a brand. When receiving a package, Gilt tries to create an experience for their consumer. Opening the box to your already satisfied purchase is a great feeling. However, making sure that the packaging is elegant adds to the experience. Below is a photo of Gilt beautiful packaging. The company also uses 100% recycled cardboard for their packages.
Gilt Groupe has many divisions under its umbrella. The company sells men's, women's, children's, home decor and appliances, city events, and vacations. According to chapter 10, Gilt's business model offers consumers a PRODUCT MIX WIDTH. This means the number of product lines an organization offers.
BRANDING is extremely important to Gilt and the company prides themselves by offering their costumers the best deals on their PRODUCT MIX. By building a brand based on discounts, each consumer that visits and shops on the site is reassured they are getting the best deal and it is even arguable that each individual is very satisfied because of that.
PACKAGING is another element when it comes to building a brand. When receiving a package, Gilt tries to create an experience for their consumer. Opening the box to your already satisfied purchase is a great feeling. However, making sure that the packaging is elegant adds to the experience. Below is a photo of Gilt beautiful packaging. The company also uses 100% recycled cardboard for their packages.
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