Gilt: More Full Price Sales Will Likely Be A Part Of Our Future

A spokesperson from Gilt got back to me regarding the Vogue partnership. Here’s what she had to say:

• There will definitely be Vogue-sponsored “Shop The Issue” sales in February and March. Vogue hasn’t committed to anything beyond that.
• As Gilt grows, full price sales are something it wants to do, but no definite plans have been made.

Obviously, the big question is: Why bother? Gilt’s already grabbing market share from pretty much every type of retailer, including off-price brick-and-mortar (TJ Maxx), department stores, boutiques and outlet stores.

Well, I think what Gilt may be dealing with now is somewhat of a backlash from designers, as my Twitter follower @EmekaPatrick suggested yesterday. Many boutiques are frustrated with certain designers because they’re producing in-season merchandise for Gilt and allowing Gilt to sell it at a hefty discount while it’s still full price at traditional stores.

Consumers are picking up on this. One boutique owner told me that clients have actually said to him, “I saw this on Gilt the other day for 70% off, why is it full price here?” I’m sure designers are hearing from disgruntled store buyers and have relayed these concerns back to Gilt. I’m also sure it’s not a huge deal for the company as of yet, but as the economy improves and traditional store buyers have more money to spend, Gilt’s going to have to come up with new ways to convince designers to cut them a deal.

That’s not to say Gilt’s original form of revenue will go away. No matter what’s up with the economy, people love sales, even if the product is a couple of seasons old. But in-season merchandise is going to be more difficult to discount down the road. As a frequent Gilt customer, I look forward to observing how the executive team deals with this and other challenges.