Gilt Groupe Founders: The Most Powerful People In Fashion?November 09, 2010
by Raquel Laneri
For Forbes’ coverage of the world’s most powerful people, we reached out to a group of experts, innovators and luminaries to select the most influential people in their fields. Arianna Huffington picked the seven most powerful media moguls, venture capitalist Vinod Khosla chose the most powerful cleantech innovators, Deadline Hollywood editor Nikki Finke picked the most powerful people in the movie biz and Gilt Groupe’s Alexis Maybank and Alexandra Wilkis Wilson picked the most powerful people in fashion.
You can’t really argue with Maybank’s and Wilkis Wilson’s selections for the most powerful fashionistas: Vogue editor Anna Wintour, Chanel creative director Karl Lagerfeld, LVMH CEO Bernard Arnault. But I would argue that Maybank and Wilkis Wilson belong on that list. The two former Harvard Business School classmates have radically transformed the fashion and retail industries with their invitation-only “flash sale” website, Gilt Groupe, which brings the real-life, exclusive, frenzied New York City sample-sale experience online and to the masses.
Shortly before noon, Gilt sends an e-mail to its its nearly 3 million members alerting them of the day’s sales. Shoppers have only 36 hours to snap up the limited number of deeply discounted designer duds available–by coveted brands like Marc Jacobs and Valentino–which certainly creates incentive to buy quickly. In 2009 Gilt generated $170 million in revenue, up from $25 million the year before; the company expects to generate between $400 million and $500 million in 2010.
But Gilt isn’t powerful just because of these numbers. The company has forced luxury brands, which once looked upon e-commerce with disdain to embrace–or at least acknowledge–the Internet. Marc Jacobs, Jimmy Choo and Donna Karan have just added retail to their websites this year, for example, while Burberry has started offering select pieces from its runway presentations for a limited time on its website merely hours after its Fashion Week show. It has changed how the fashion industry works, allowing smaller brands that, unlike huge companies like Ralph Lauren or Armani, don’t have large retail outlets in which to sell older, leftover merchandise to try to sell off their extra product at a discount. (A New York magazine article asked whether Gilt was also diminishing the value of luxury goods and discouraging greater numbers of people to buy an item at full price.)
Moreover, it has further democratized fashion, giving consumers everywhere from Miami to Moscow, Idaho, access to the most exclusive brands at insider prices that you could formerly only get in New York. And it has changed the way we shop. As we work more and more hours, and as more and more of our social interactions take place online, it only makes sense that we would do the bulk of our shopping on our computer too. Gilt is has not only capitalized on this trend, but it has also transformed the experience of online shopping, of logging into a site and clicking “buy,” from something mundane and impersonal to something exhilarating, with its blink-and-you’ll-miss-it sales and aura of exclusivity. I think it’s made consumers much pickier about their online shopping experience, and it will only continue to affect the way traditional retailers and brands sell their clothes–both in the real and the virtual worlds.