About
Gilt Groupe is a rapidly growing e-commerce platform for fashion sales of designer apparel and accessories using the concept of daily promotions. It is the most popular platform for discount designer wear in the US and possesses an "addictive" quality to its shopping experience. In contrast to traditional retailers, the Company's core business model involves no inventory risk as items are sold on its site before inventory is purchased from designers. Gilt has six distinct business lines: men, women, kids, local services, home and travel.
Thesis
Gilt Groupe has experienced explosive growth and engagement by providing a compelling shopping experience.
People
Michelle Peluso has served on Gilt Groupe's Board for three year before becoming its CEO in 2013. Between 2009 and 2013 she led the Global Consumer Marketing and Internet Group at Citigroup and helped improve Citi's online marketing capabilities. Prior to that, Michelle was the CEO at Travelocity post its acquisition of Site59, a travel site she launched in 2000. Additionally, she served as a White House Fellow and Senior Advisor to Labor Secretary Alexis Herman.
Key Board Members:
Management Team
- Susan Lyne, Chairman
- CEO of Martha Stewart, President at ABC Entertainment
- Tom Sansome, CFO, Head of Corporate Development
- PricewaterhouseCoopers
- Alexis Maybank, Founder
- AOL, eBay, eBay Motors
Product
Gilt Groupe provides consumers with access to today's top designer labels at up to 60% off retail. The company also offers exclusive local services and unique travel packages. Sales take place on gilt.com on a first-come, first-served basis, creating an impulse and purchase urgency. Members are informed about offering through daily emails.
Potential
Gilt Groupe is the US premium brand market leader in flash sales and luxury goods and has also enjoyed considerable success in Japan (600,000 members). E-commerce is an enormous and fast-growing market, estimated to be $300 billion by 2015 in the US alone.
Megatrends
- Internet
- Brands
- Demographics
How Big Can This Be?
Gilt Groupe can continue to see high growth over the next 3-5 years. Marketing will be key for broader adoption and longer-term prospects. Keys to future growth are maintaining strong engagement amongst their existing members, expanding their membership and broadening their product lines.
Predictability
It is our projection that Gilt Groupe has grown to over 4 million members, up from 2 million in less than two years. Monthly unique visitors are estimated to be close to 1.4 million. While more than two thirds of the members are women, the ratio is likely to change in the future as the company is developing its men's line. We estimate users and visitors will continue to grow rapidly.
Risks
Numerous entrants into flash sale market. Maintaining consumer engagement a key risk. Increasing competition for members and compelling product.
