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.

Talbots

Very interesting comments from leadership.

For our direct marketing and social media readers, enjoy the following two paragraphs:

Look, we’re doing some very innovative things that frankly aren’t a huge investment but creates some great buzz. So obviously we are thrilled that Michelle Obama engaged in the brand. We ran a really great contest for Valentine’s Day. We really are using things, even like Facebook and blogs and outreach programs that are very different for this brand, in order to attract a new customer in. And we will continue on the reactivation side. We are really prioritizing consumer facing spend.

In terms of catalogue circulation, the one part of our circulation that wasn’t successful in 2008 was really the amount that we had invested in prospecting circulation. We got much better results with reactivation. So we have rationalized that for 2009. We have brought our circulation down in terms of not doing as much prospecting circulation. We will use these grass roots efforts to attract a brand new customer in and we will prioritize our spend with the house file and with the reactivation circulation.

Annual Report Update: Talbots

A few comments from their Annual Report:

• New Stores: "The customer database compiled through the Company's catalog operations provides important demographic information and serves as an integral part of the Company's expansion strategy by helping to identify markets with the potential to support a new store. Although the addition of stores in areas where the catalog has been successful has resulted in slightly lower catalog sales in these areas, the lower catalog sales have been more than offset by the significantly higher sales generated in these areas by the opening of new stores".

• 78% of Talbots merchandise and 88% of J. Jill merchandise is sourced via offshore vendors. 33% of Talbots merchandise is sourced in Hong Kong.

• 2006 Talbots circulation = 25 in-home dates, 48 million catalogs circulated.

• Direct-to-Consumer sales across brands represented 17% of total Company sales --- the online channel comprised 49% of Direct-to-Consumer sales, 47% at Talbots (42% LY), 54% at J. Jill since the acquisition date.
  

• Talbots comps increased just 1.3%, J. Jill comps decreased 4.4% since the date of acquisition by Talbots.
  

And The Winning Catalog Cover Is ... J. Jill

Earlier this week, I asked which multichannel retailer sent a catalog without the name brand on the cover.

The winner is J. Jill, who sent the sale catalog on December 23.

J. Jill's new Chief Marketing Officer is Hilary Chasin. I wonder how she perceives this unique marketing strategy?

J. Jill has struggled for the past several years. Since being acquired by Talbots, J. Jill earnings have dragged down Talbots performance. 2007 should be an interesting year for multichannel specialty apparel businesses.