GILT (www.gilt.com) has brought haute couture online via their invitation-only shopping website, allowing anyone (well anyone who has been invited at least) to participate in what was once exclusively a New York City phenomenon: the designer sample sale.  GILT currently earns a 4-star rating from the ChubbyBrain community, citing strong and experienced management, clever use of exclusivity to drive demand and a solution to meet the needs of those fashion-conscious, yet spend-savvy individuals who cannot physically reach sample sales. Concerns mentioned by our reviewers regarding GILT’s success include increasing competition and scalability.

As Ying L mentions in her 4-star review “Gilt Free Shopping”, GILT cleverly uses subtle branding and invitation-only tactics to encourage high-end designers to become suppliers:

The Gilt Groupe understands that many luxury brands refrain from selling their goods online because they are afraid of tarnishing the reputation of their brand. Some brands even forbid other companies to sell their goods online. Thus, it realizes the need to provide the right branding and atmosphere so that luxury brands will be willing to entrust them with selling their wares while protecting their reputation. Hence, the debonair French “e” added behind group, and the “Gilt” in its name implying luxury and lavishness.

To add to the air of exclusivity that many luxury brands are looking for, Gilt’s site is invitation-only. This prevents Gilt’s listings from appearing high up on Google searches, which would probably cheapen Gilt’s brand image.

Ying continues, suggesting that GILT’s image has afforded the company strong partnership opportunities that not only allow them to do business in the sample sale space, but to do so in a manner with better-than-average margins:

With a proper image in place, Gilt manages to buy merchandise directly from the brands instead of buying from wholesalers, like most other discounters do. Its success is evidenced by the fact that the Council of Fashion Designers of America (CFDA) decided to form a liquidation partnership with Gilt, which gives its members (Marchesa, Rachel Roy…) the option of getting rid of excess inventory, runway samples, overstock and vendor returns on gilt.com.

In his review entitled “Great Idea but Is It Scalable”, Manu B suggests that strong growth is a catch-22 when branding is built around exclusivity:

The size of the site’s user base is growing rapidly and is only going to continue growing faster due to the invitation system…If the user base gets large enough it will reach a point where it becomes annoying to even try and buy something which will definitely turn people off.

Manu expands upon the issue:

Now let’s say Gilt Groupe allows this increase in their user base to happen, the only way to solve the problems that come with the huge demand would be to increase supply…All of this will tarnish the site’s exclusive appeal and in my opinion would cause the better designers to back off for the very reason they didn’t enter the online market themselves.

What are your thoughts on the GILT Groupe? How do they stack up against the competition (Ideeli, Vente Privee, Hautelook)? Will growth allow GILT to maintain its exclusive branding? Join the conversation and share your viewpoint on whether or not GILT is poised for success. You can write your own review or offer your comments on existing reviews.

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