In 2007, Alexis Maybank and Alexandra Wilkis Wilson were combating a serious sample sale addiction, sneaking out on lunch breaks to pillage the racks at Zac Posen or Hermes. Recognized experts in the field of bargain-hunting by friends and family members, the ladies were soon dispatched on sample sale shopping missions.
It was during one such excursion, rifling through the Fendi sample sale in search of a requested clutch, that Alexis thought to herself, "wouldn't it be great if you could put this online?" Four years and a million users later, Gilt Groupe has become the most successful flash sale site on the internet, bringing the excitement and frenzy of a New York sample sale to a national audience. We caught up with Alexis to hear how she's keeping up with the explosive growth of her company, what advice she'd give to young entrepreneurs, and how Gilt has forever changed the way we shop.
How many members are currently registered on the site?
We originally launched with about 15,000 people, and that included everyone from personal friends and colleagues to interested parties abroad. That has grown, today, to over a million shoppers coming to the site in any given month. And actually out of those, we have roughly 200,000 shoppers who come in through virtual doors right at 12 p.m., every single day, as sales are starting at noon Eastern Standard Time. So, to me, it's been so incredibly exciting to build a business that could never exist without the internet -- you can't build a store where you let 200,000 people rush through the door. You couldn't do what we're doing right now at Gilt Groupe where we're essentially changing our inventory thirty times a day. You can't introduce thirty new sales, collections, whatever you might want without having the internet as a basis for doing it. And to me, that makes it so exciting.
For those who might not know, can you explain what is meant by "a viral business model?"
Essentially it's a very good thing. You have a topic or an idea or a business that people naturally want to share with friends, colleagues, people in their life. Viral basically means word of mouth marketing. It's people telling other people about something they're interested in, and having that spread very quickly, like -- for lack of a better analogy -- like a disease, like a virus, and moves very quickly from person to person ... The way we measure it, is, okay, we look at everyone who shops on Gilt today, and 75 percent of them came in because they had an invitation from a friend. A friend told them about the site, in conversation, on the phone, in an email that said, "You have to check this out," they sent an invitation and they joined. So that spreads really really quickly among so many people, that the invitation to Gilt Groupe becomes something that people want to talk about too ... It's a much faster way to grow and it's not quite as expensive.
We've heard that brands are now producing product specifically for flash sites like Gilt. Is that true?
Yes ... Right now, there's a million shoppers, and we have to think about how we have enough product for everyone that comes to our site. And we do that by, one, taking excess product -- that is, product that's considered no longer "in season" ... Retail operates like a whole season ahead, and we're about to go into fall here in a little bit, but you and I are probably still thinking about buying summer stuff, right? So we are in the market buying summer stuff as excess merchandise. We know we have a million shoppers on the site every month, and need to get enough product for them, so as summer collections are being created, we walk in to appointments and say, "We love the collection, we want to place orders for it as well." So we sell those items that are produced directly for us along with excess product that was available.
How do you think Gilt has changed the retail, and even the fashion landscape?
Two major things. We've done a lot to bring fashion online, and I think that back in 2007, as Alexandra and I were going out and meeting with so many of our brand partners that we still work with today, we not only introduced them to the concept and the excitement of selling potentially a lot, but we were also saying, "Here's what the internet can do for you, here's what e-commerce means."
Many of those brands we started with weren't even online. So, now, as we look across as nearly 3,000 brand partners we work with, I'd say a good portion of them came online for the first time through Gilt. And now they understand and recognize the power of the internet to really showcase their beautiful collections, to access new people. And that's really powerful for them. And the second thing is we've attracted a younger audience that might not be familiar with all of the brands on the site, or at least weren't purchasing them before. Now they're regularly purchasing them, they know about [the brands], so in some way we've made high-fashion designer product that much more accessible to millions of consumers.
What advice might you give to a young entrepreneur?
It sounds cliche but you definitely have to follow something you're really passionate about. Starting a business, there's nothing more fun, but it's a very time-consuming thing, so you've got to be incredibly passionate about what you're doing. You have to be so excited and passionate to do it every day. And the second thing is that ideas are available, but it's really the execution that matters. So finding and bringing together the right team is the most important element. You have to have personalities that are complimentary, not just skill sets. You have to have a really high degree of trust. There can't be a hint of mistrust or it's not going to work. So really think about the team that's coming together and whether it's truly the right team for that idea. It's so critical, to get that founding team right.