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