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Gilt Groupe: The art of the private sale (Part I)

By
  • Imran Amed

Invitations to private sales have long been the exclusive domain of only the most well-connected of fashion insiders. Traditionally, they have been given out by fashion companies as a way of saying 'thank you' to friends and supporters of a brand.  This wasn't just to be snobby, there was also an important business rationale behind it. It ensured that the goods ended up in the hands of trusted customers rather than being sold out of the back of a truck somewhere, which can damage brand equity and reputation.

Thus, for the average consumer, getting access to one-of-a-kind runway samples and excess stock was near impossible...until now. For the first time, companies on both sides of the Atlantic are partnering with fashion brands and retailer to take this exclusive privilege online and thereby, opening it up to people who don't run in tight fashion circles. For their part, fashion brands have started to learn that they can trust these new companies to professionally handle the private sales, while also protecting their brands -- and perhaps even introducing them to new customers.

was launched by

A&A

, shorthand for dynamic duo  Alexis Maybank, CEO, and Alexandra Wilkis Wilson, CMO. They come with great Internet and Luxury pedigree from Ebay,

and

, not to mention double-Harvard degrees. In its first month of existence, Gilt has conducted online private sales for Zac Posen, Alvin Valley and Marchesa -- the sales last only 24 hours, but even then the stock seems to sell out almost immediately. This A&A team is onto something.

Meanwhile in London, Miriam Lahage is the CEO driving the business ofkoodos.com, with some hard-earned funding from top-tier VC Atlas Ventures and years of experience at TJX, the parent company of TJ Maxx, the world's leading off-price retailer. Koodos' main business is to sell off-price merchandise like TJ Maxx (only Koodos is online), but they are also doing some one-off private sales with apparel and accessories from brands like Marc Jacobs, Chloé and Fendi .

In the first of two posts about emerging online private sales models, we sit down with Rachel Wolkowitz, Gilt Groupe's Director of Marketing and Communications to get the scoop on Gilt, and tomorrow Miriam will give us her views on how koodos.com's private sales create a win for everyone involved.

BoF: How did Gilt Groupe come about and what specific market opportunity are you trying to address?

RW: Alexis Maybank, formerly of Ebay (founding team) and Ebay Canada, and Alexandra Wilkis, formerly of Bulgari and Louis Vuitton, joined forces to launch Gilt Groupe. Long time close friends, they wanted to combine their complementary backgrounds to launch a members-only community that gives access to hand-selected fashion and luxury good online. We are trying to address the following:

For the consumer...Access to the inaccessible, allowing members access to hand selected fashion and luxury goods at desirable pricing ( 50-70% off) and a streamlined efficient way to shop (allows you to still get the "thrill of the chase " while not having to seek out sample sale locations, which the vast majority of Americans do not have access to) .

For the collector...Access to one of a kind, runway samples and previously unreleased items from coveted brands.

For brands...A private online channel that allows brands to distribute their goods to our membership in a way that is not visible to non-members.

BoF: You have already worked with an impressive list of fashion brands positioned at the very top of the industry. How did you convince these brands to work with you on a new concept like Gilt Groupe?

RW: The brands we have secured have chosen to work with Gilt Groupe given our desirable membership base, the lack of discrete online alternative channels, and the speed with which we can react to their needs and sell their inventory.

BoF: For each designer sale, you develop a reel of video to share a bit about the designer's creative process and ideas with potential customers. How do you develop the video content?

RW: We collaborate with the brands' internal marketing teams, and our production team produces a reel showcasing the brand or designer’s inspiration behind the items Gilt Groupe showcases in that designers shopping event.

BoF:

The Gilt Groupe management team is an experienced group with diverse experience and education. How did your paths cross?

RW: Alexis and Alexandra went to university together at Harvard and were classmates at Harvard Business School. While having complementary professional backgrounds and personal interests, “A&A” (as they are known) have been long time close friends, who had always wanted to start a business together and were inspired by a business model that was introduced to them in Europe. (

)

As for me, I too proved myself in the world of Madison Avenue (HL Group ~ Harry Winston, Asprey, Krug and David Yurman) and Ghiso in Geneva. I met Alexandra in NYC through our shared worlds.

BoF: What do you look for in the brands you decide to work with on your site? How should brands go about contacting Gilt about this?

RW: We look for brands that are most relevant and compelling to our membership. We consider the brands that would fall under the fashion and luxury umbrella (not necessarily as measured by price point.) We like to offer high and low price points... the perfect t-shirt to accompany a tailored suit and a pair of French ballet flats. Brands should contact Gilt Groupe at vendors@gilt.com, where one of Gilt Groupe's Buyers will respond immediately.

BoF: What are your plans for the future, especially with regards to growth?

RW: In the near future we will increase our shopping events from one sale to three sales weekly. Also we will consider shifting into adjacent categories later in 2008, such as into men’s, children’s and home goods categories.

BoF: Okay, and one last thing. Why 'Gilt Groupe'? And, what's with the extra 'e' on the end of Groupe?

RW: For women, shopping is

one of, if not the

guilty pleasure. I.e., Gilt Groupe takes the gilt out of retail therapy. The addition of  the 'e' signals our embracing of the French

joie de vivre

, Gilt Groupe's goal is to offer an enjoyable, entertaining and ultimately fulfilling experience.

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