Gilt CEO: 'Networking Just Feels So Unauthentic To Me'Michelle Peluso talks about the noon shopping frenzy and treating relationships as goals, rather than means
January 15, 2014
by Jana Kasperkevic
It’s almost noon and shoppers all around US are waiting to see what Gilt has to offer today. The anticipation is driving them wild, but the wait is worth it. After all, Gilt is one way of the few ways that they can get luxury design items for a discounted price.
“Ah, the noon frenzy”, laughs Michelle Peluso, CEO of Gilt Groupe when I ask her about the company’s strategy of launching their limited daily offers at noon.
Visiting Gilt headquarter is any shopaholic's dream. On the way to meet Peluso, I catch a glimpse of a room packed with just shoes: rows and rows of amazing heels that even Carrie Bradshaw, the famed shoe lover of Sex and the City, would kill for. Yet it’s not all just about the shoes. The company, which launched in 2007 and currently has 1,100 employees worldwide, offers a variety of items for women, men and children to its seven million members. And ever since February, Gilt has been run by Peluso, a former bank official who has been on its board for over four years.
"Kevin Ryan, the founder, wanted to move to the chairman role and wanted to bring in a new CEO and asked me to do that. And it took a while, because I was really loyal to my old company, Citigroup, but I joined full-time in February … I don't know if it's a demotion or a promotion to go from the board to being a CEO, but it's been an awesome transition."
Running a company is nothing new for Peluso, who served as CEO of Travelocity, which acquired Site59, a site that she launched in 2002. Most recently, she was Citigroup's Global Consumer Chief Marketing and Internet Officer.
“I have always been an entrepreneur. My dad was an entrepreneur. As a child, I watched him build businesses,” she says, adding that at 15 she launched a swimming school in her backyard. "It was a way to be an entrepreneur at an early age."
We caught up with Peluso to talk about what her transition to CEO of Gilt has been like, how she stays organized and why she is not a fan of networking.
What do you find to be the greatest difference between being on a board of a company and being a CEO?
On the positive side, you know the other board members, you know the management team, you know the issues, you understand the [profit and loss statement] you know what's working well on high level and what's not. You go in as much more informed, but on the flip side, you don't understand the micro. And [learning] that was really fun for me, frankly.
For two months before I started, I was coming in on Fridays just trying to learn the business. Since I started full-time, I don't have a permanent desk, so I sit with different teams every week and I really get to understand the work they are doing, the people on the team, what motivates them, what's exciting to them, the tools they use, where they want to see things get better. I like it so much, I'm still doing it. I'm making second and third rounds to various teams now. I have been sitting with tech for a while, and now I am moving downstairs to Gilt City team.
It's just a great way to really learn, meet everybody, learn about all the different departments, how it comes together. I really enjoy getting into the details and understanding how you make it happen and most importantly what we can do to make it better.
It seems as if you are embedded in the culture of the company. How would you describe the culture here?
First of all, Gilt has always been a phenomenal mix of creativity, technology and analytics, and that kind of mix between super creative people and design people: you know, photographers, stylists, merchandise experts, web designers sitting alongside analytical and technology fire power. [It] is such an interesting combination and provides a very vibrant culture, a mix of right brain and left brain.
Secondly, Gilt has always been a super innovative and fast paced culture. It has to be. Everyday we're putting on a new sale. Everyday, we're changing with what we have in our warehouse. And so, that pace of innovation is always a part of the culture.
Third, I would say, there's lot of celebration and fun at Gilt. We have to attract and attain the best people, so there's so many different things we do to keep that culture vibrant and fun and innovative. We have this legendary Halloween party, picnics, pantries that are full of food, team events, shopping discounts. Just lots of things that make working at Gilt fun.
Then there are things that I think we are adding, shifting the culture. One is a much greater focus on transparency, being really clear about the things that we need to do well. We have a scorecard [that] we shows the entire team. We put a lot of people through boot camp and finance training so they can understand the P&L, or give people a lot more insight into what drives the business and what we can do to make the business perform at a higher level. That's something we have been putting a lot of energy and effort into.
That's exciting for them. They like understanding the big picture and seeing how their jobs contribute to that. It gets them excited about the future and we can see that even in employee service scores, people are just feeling increasingly really excited about Gilt's future at just incredibly high level.
As the company grows, what do you look for in potential employees?
When I'm interviewing, I want to see someone who is passionate, I want to see someone who's done their research. I want to see someone who comes with a point of view about how they are going to contribute to Gilt. They are clearly excited about the job, they have done their research, they have done their homework. I obviously want to see applicable skills, that they have taken a risk before, that they have had big accomplishments, that they have occasionally stumbled, that they've learned from their stumbles, that they have longevity and persistence in a job.
I can't stand job jumpers. One year here, two years there, one year here. It's just a huge turnoff to me.
And then it comes down to, they have all that, they are passionate about the job, they can articulate how they can contribute, they understand what Gilt is, they've demonstrated real success in the past that would be applicable to Gilt. What it comes down for me to is: do I want work with this person? Can I learn from this person whatever their level? Are they going to inspire their peers to do more?
We are an incredibly team-centered culture. So we need people who are ambassadors for our culture in some ways.
One of the big things about Gilt is the loyalty that you build between your brand and your followers.
Ever since the beginning, when [the founders] launched Gilt there was a clear sense of what Gilt was. It was a go-to place to be inspired for top designer deals, and everyday local experiences. To do that, we have to do four things incredibly well.
We have to be exciting and have a sense of urgency. Shopping always was that. And then the online world kind of stripped it away. But Gilt brought it back.
We have to be curated with a point of view. We can't just show everybody everything. It's not our thing. It's not exciting. It's not what they want. Gilt is not about the need, it's about the desire.
We have to provide value and access. It has to be something that you can't get elsewhere. When they get it, it's exciting. Lastly we had to use data to be really relevant and personalized. If you're going to come every day, you don't want to see stuff that is not interesting to you.
Our customers give us an inordinate amount of data. Our waitlist is three times the size of our revenue. Our customers are telling us a lot about what they like, what they want, what they're interested in ,and we have to use that in a way that makes the experience better for them every single time.
That gets to two remarkable things about Gilt's audience: first, we are young and we are affluent. And we are engaged. And that combination of youth, affluence and engagement doesn't exist really anywhere on our level.
Today's challenge for traditional retailers is not "Do they have a good website?" or "Do they have a good mobile device?" The question is: "How do they get young affluent people excited?" And I think Gilt does a great job of that.
And then, secondly, because of that we have an incredible retention. So, three years later, we retain 87% of the revenue of any core brand. That's an incredible stat. It comes from us being a lifestyle brand.
You have seen some of your sales shift to mobile.
Almost 45% of our revenue is on mobile. That's incredible. It's partially because we have this young, affluent audience and it's partially because of the 12 noon frenzy. It's partially because we have a great mobile application. But the exciting part for me is that the mobile audience, is highly engaged and there's more that we can do with it.
There's unique features in mobile that we can increasingly think about. We launched the ability to take a picture of your face and flip through sunglasses and see what they look like. It is much harder to do that on your desktop.
We have been thinking a lot about geo-location and how to target that. Maybe you love Kate Spade, maybe we should give you an offer to go into a Kate Spade story if you are nearby. There is a lot more with the mobile device that we can start thinking about different. But it's a very exciting part of our trajectory.
By moving desk all the time, you are basically networking within the company. What's your take on networking in general?
Look, I am a feminist through and through, a huge believer in women and I think this is a particularly important topic for women. Having said all that, sometimes I feel all that stuff just lacks authenticity. I am a huge believer in great results and believe that authentic relationships are the key to success.
I guess I have a very extensive network as it turns out. But it wasn't because I sat there, and went around, going "You know that person, can you connect me to them?" It's just not my style.
Over the course of working incredibly hard and being really passionate about what I do and delivering great results, I got to know some extraordinary people, many of whom have been, officially or unofficially, role models and mentors. And most of whom are still huge part of my life.
But I wouldn't say I have ever been conscious of networking. As a matter of fact, I don't even like it.
If you surround yourself with people who are better than you and whom you can learn from, and you produce great results and you are passionate about what you do, and if you lift other people up and if you build other people up along the way, I think you end up with a really extraordinary network. It's an end, not a means.
You must have to pencil in a lot of people on your calender.
The people I appreciate the most are those that I chose to mentor. And at Gilt, it's the same way. People who I know are doing great work, who are passionate about what they do, who are trying real hard, who need help, who need to be kicked in the butt about something, who need to be grown and shaped and developed. I reach out to those people and say, "I want to spend time with you once a month." I am very direct. But it comes because I admire what they are doing and I know they can do more for us over time, or even just for themselves. I do those meetings with such an energy and passion.
People who just call me up and say, "You know, you're a Wharton alum and I'm a Wharton alum. Because of that, can you take my call or meet with me? Why wouldn't you invest because we're both Wharton alums?" That kind of networking just feels so unauthentic to me.
Speaking of calendars, your life must be so busy, what with changing desks all the time …
... and I am a mom!
How do you stay organized? Tell us your secret.
Being a mom forces you to be more organized. You don't have time. You get to a point where you'RE not sleeping enough, you'RE not exercising enough, these things go by the wayside. So with the time you have, you want to make as much of a contribution as you possibly can to your family, to your kids, to your husband, to your work, to your community. I think it forces discipline.
Having said that, I am a hyper-organized person to begin with. I am a focused person. There are a lot of tools that I deploy to make that work. I'm incredibly structured about my day. I am in by 7.30 or 8am every morning. Earlier than everybody at Gilt. There's just a couple of us here early. Usually, I'll have breakfast across the street with an employee or something, and then I come over. But I leave at five o'clock every day, religiously. My husband does the same thing. We make dinner, bath time, reading time, Lego time, puzzle time. We get that really nice family connection and then I work 8-11, six nights a week.
And I'm really structured about my travel; I could spend every night of the week at an event or traveling. The number of requests we get is pretty significant, but I only do things I really think will move Gilt forward, or if it's an issue I am really passionate about, like helping young women. I try to be really ruthless and sort of religious about what my priorities are and make sure that the way I spend my time matches with what I deem to be most important.
And I don't go to bed at night without having daylight in my email: my inbox has to have less emails than what covers the whole inbox. I won't go to bed at night until that's clean. And I try really hard to always get back to people within 24 hours and not leave people hanging. I think it's rude.