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The Rise, Stumble, and Future of Gilt Groupe’s Business Model

Gilt Groupe is a great example of a merchant e-business model

Gilt Groupe is a member’s only, wholesale marketplace that engages in flash sales. Gilt Groupe was the first e-businesses of it’s kind, taking full advantage of the recession and retailers need to sell excess inventory. This free website grew mostly by word of mouth among “urban sophisticates” and became so popular that the website could not keep up with demand. This inspired copycat business models which contributed to the decline of Gilt Groupe. Gilt Groupe has been able to refresh their E-Business model by creating a home, city, and restaurant section to their website. This has spurred growth in a period of decline, along with new Gilt Live and Gilt Color which allows purchasers to see what is being sold in real time and to search for products by color.

This is newsworthy because Gilt Groupe found a way to help retailers move their excess inventory in a time when it was nearly impossible. This company was the first model to implement these types of sales that change every day and have limited amounts of time and inventory. In addition, Gilt Groupe has been able to automate the identification of trends which was previously unheard of and done by employees. Gilt Groupe is a great example of a merchant e-business model, who brings customers wholesale prices and great quality products.