September 13, 2009

Gilt Group, Rue La La, And A Different Shopping Model

Have you read this article about luxury apparel companies? If there's only time for one article this week, read this article.

Just look at Gilt Group's home page. Is this the well merchandised home page the experts taught us to build? If you're a first time visitor without the luxury of knowing somebody who shops Gilt Group, what do you think your conversion rate will be (conversion = purchase)?

Sites like Rue La La encourage you to join a waiting list, a waiting list!!?? Weren't we taught to make it easy for a first time visitor to find what they want, followed by a discount/promo e-mail when the customer leaves the site after putting something in the shopping cart? These sites are experiencing exponential growth doing the opposite of what industry experts tell us to do.

While we're busy wondering if homepage text should be salmon-colored or periwinkle-colored, Gilt Group is busy going from $0 to $150,000,000 in two years, heading to $400,000,000 by this time next year. Please take one moment and think about what that kind of growth means.

Question: Ignore your core business for a moment, because ninety five out of one-hundred of us are unwilling to make significant changes to the core business. Would you be willing to try the type of innovation that Gilt Group / Rue La La are doing for a brand new business unit within your brand? If not, please use the comments section to explain why, and if your point of view is "... that wouldn't work in our industry", explain how you know it wouldn't work if you haven't tried it yet.

The Math Behind Bifurcated Customers Who Have "Moved On" From Catalogs

Yesterday we talked about a classic, outstanding catalog customer ... and how that customer needed MORE mailings on an annual basis. ...