Fifteen

Founder Alexandra Wilkis Wilson, an HBS MBA graduate, visited MIT Sloan on October 3^rd, 2008 to talk to a small group of students in the Retail & Consumer Goods Club about Gilt.com’s “bargain luxury” business. For years, New York City has been famous for its designer sample sales. I have been among the women lined up around the block for the yearly Barney’s Warehouse Sale. The prices are fantastic, but fighting other New Yorkers can prove to be a real drag – a necessary evil in order for designer labels to discriminate between the price-sensitive aspirational shopper and those who cannot be bothered with crowds.

The Gilt Group was able to play the delicate balance of bringing to the web luxury brands such as Chloe, Marc Jacobs, and Vivienne Tam at 70% off retail while still maintaining brand exclusivity. This is done through an invitation-only and word-of-mouth marketing strategy and limited-time sales of a few brands at any one time.

Since its launch, Gilt has expanded its product offerings to menswear, which enjoys considerable success, and children’s wear. Alexandra says labels are more than eager to sell their overruns through Gilt, which provides the additional benefit of gaining mindshare in Gilt’s predominantly young and educated customer base.

Gilt Groupe is funded by Matrix Partners and has recently attracted Susan Lyne, ex-CEO of Martha Stewart Living, to lead the company in expanding and dealing with the what any good company eventually faces – competition.