If you had a brand and a budget and an inventory on offer, which way would you go?
In theory, the two companies do very similar things – limited time, select product or service offering, special pricing. A few intense days of getting your brand name out there. However they could not be more different executions.
- Gilt - nation-level brand development, exposure, cachet (or association building under the Gilt brand umbrella), multiple items sales.
- Groupon - local-level exposure, transaction development, volume, one or two item sales
There are questions about whether the Groupon crew repeats their purchases at full price. Whereas Gilt customers come back again and again. You can repeat a sale on either, but only one builds the more favorable brand halo. Both provide transactions that move volume. In the Gilt case, the exposure is elegant and integrated. In the Groupon case, you get witty text, clean and bright layout and a smarmy cat. With Gilt, the items are limited going into the sale. With Groupon, the items are not sold until a threshold is reached. The Gilt model requires a much smaller staff with greater focus. Groupon is rapidly growing, but has a little bit of “starbucks on every corner” feel right now. I wonder if it is sustainable. The folks at Mashable published this story about competitor LivingSocial, who is growing rapidly and has the backing of Amazon. If LivingSocial can simply harness or access any of the tricks/talent/trade secrets from Amazon, they could easily be the dominant player.
Groupon is beginning to feel like the Val-pak of social media. That might sound mean, but it really feels like they are building transactions, not loyalty. In a small local business, don’t you need both?
So, Groupon can’t be Gilt, but is it possible for Gilt to be Groupon?
Gilt is now hitting the local markets. They now have the critical mass to do events in major markets. They have Gilt City, and while it resembles “Groupon for the Gilt set,” it offers experiences in addition to discounts. So the $28000 wedding for 75 in Chicago may not feel like a deal, but it probably can’t be duplicated in many places. Similarly the Longman and Eagle (also Chicago) Michelin Chef-prepared dinner, but that does come at a “special price.” The concept of curation so present on Gilt, plus the multiple points of access give it a better brand experience. It has multiple points of entry through its affiliated concepts – Woman, Man, Child, Jetsetter, Taste. Any one can get to the site, while still feeling boutique-style relevant.
IF you were a small business, does volume trump experience and control? I think not. Gilt’s slower, more sustainable and flexible model gives them options. Now if only they could use a little more of the information they have about me combined with their DoubleClick background to create a more customized entry point on the home screen, they’d be golden, or gilded. So to speak
Cristene Gonzalez-Wertz aka Hermione1