Talking With…Susan Lyne, Gilt Groupe CEO

2 Comments | This entry was posted in Marketing, Merchandising, Retail Companies

LyneBefore the start of the networking receptions this evening, I had a chance to sit down with Susan Lyne, the CEO of Gilt Groupe. It was the most insightful, fun twenty minutes I had all day. During our conversation, Susan talked about why the site is so addictive to shoppers, how retail is just repackaged entertainment, and ways to snag one of the 104 open positions at the company right now.

Let’s begin with some exciting company news. Tell me about some new projects in the works, including Jetsetter.

We’re launching a new platform in mid-October, which is a way to be able to surface some of the new categories we’ve been exploring. It won’t feel like a different experience for you if you’re coming in by email, but it does allow for a lot easier navigation and cross-promotion of some of the new sites.

We are going to be launching It is like Gilt in many ways; it’s a flash-sale site. There’s a lot of great, great inventory out there, and we’re presenting an edited selection of experiences for people. We’ve done three or four test sales and they’ve been very successful.

In a Forbes article which ran last fall announcing your new position, you said you were already a fan of the company and that you “understand why members describe it as an addiction.” What do you think makes it so darned addictive?

Gilt did not feel like other e-commerce sites, which have a left-hand navigation and are very much products of the internet. This felt like something that was more editorial, yet had a very simple user interface. It was gorgeous, it was beckoning, and it was easy: two clicks and I was on a product detail page, two clicks and I could buy. That simple, fast fun is really something that I think they’ve done brilliantly, long before I came.

The longer that I played with it and the longer I’ve watched our members’ behavior, I think there are a number of things that are addictive: it is appointment shopping, it’s new every day. You know what brands are going to be sold but you don’t know what’s going to be inside the sale, so it’s like opening a present. There is that thrill of the hunt, thrill of the chase, and there’s a certain kind of gaming almost about this process. Gilt is bringing fun and excitement back to shopping, and I think that’s a large part of the appeal.

Do you believe your customers are drawn to the exclusivity of a shopping club or do you think Gilt would be as successful if it was an open e-commerce site?

I think there’s definitely something about it being invitation-only that makes it special. Anyone who has ever been to a live sample sale knows that there is a certain allure to the fact that you’ve been one of the lucky ones who’s chosen. And it does make you go that day, and there’s definitely something to the fact that this is an invitation-only site.

Before taking the reins at Gilt Groupe last fall, you spent nearly four years as the head of Martha Stewart Living Omnimedia. What were some of the biggest challenges in making the transition from a media company to e-commerce?

The Martha Stewart company is media and merchandising; they’re almost equal parts. That was my first merchandising experience, though the e-commerce part of that was a very small part of our overall revenues. The biggest shift or transition was really from a more mature company to a start-up that was really in hypergrowth. That was a truly revolutionary change for me on many levels.

Some have said that sites like Gilt, ideeli and Rue La La are well-positioned now, when the economy is suffering, but that it may be difficult to sustain this growth when the economy rebounds. What are your thoughts?

Nobody knows, ultimately, but there has always been a big industry around excess goods. Many brands have a large outlet business. This is not only something that emerged during this economic downturn; it’s been part of the life cycle of goods forever.

I think the bigger factor is who gets the great goods, and will people be cutting much more tightly as they go forward. So far we’re not seeing that. Certainly there aren’t as many excess goods in the overall marketplace, but that’s not a bad thing for us.

NRF has a Port Tracker report where we look at traffic coming into the nation’s ports. What we found this year is that retailers were cutting back inventory to about 2002 levels. Have you seen that affect business?

No. This is a huge industry, and we are not a billion-dollar company yet. It’s not impacting us.

On some levels, it’s actually better for us because I think there is less great inventory out there and I think we’ve got the best assortment. I think retailers’ inventory levels are maybe even a positive for us in the coming year. We have a lot of good brand relationships and we’ve got customers who know what they like and keep coming back.

During your session at the Summit, you will be talking about how viral marketing brings in new customers. Can you elaborate on this?

The biggest element of our marketing that our company benefits from is our “invite a friend.” We still bring in well over half of our members every year through invite a friend. It’s a hugely valuable marketing tool for so many reasons, not the least being that you tend to open things from a friend a lot more quickly and a lot more readily than if it’s coming from some institution.

You spent many years in the entertainment industry before your recent foray into retail. While those industries are different in many ways, several smart retail executives I’ve talked to say that retail is really just repackaged entertainment. What do you think?

That’s absolutely right. I think the best retailers do view their stores as a show. You have to grab your customers in the first act – when they walk through the door. Whatever they see first is critically important. Making sure that they stay, essentially, and going further into that stage is just as important.

I actually did one interview where, without thinking about it, I really was talking about what we do every day as entertainment. The interviewer challenged me and said, “You haven’t gotten out of your old way of thinking.” That may be true, but I do see so many elements of what we bring to people every day as being very similar to actually programming a network. Every day there’s a new show.

Do any retailers come to mind who do “entertainment” really well?

Offline, I think J. Crew has done a great job. The Collection store on 79th Street and Madison is fantastic and really well thought-out. They’ve taken a really smart, edited selection of their product and they have created a store that is for that Upper East Side customer. It feels completely different in there. I think Zara has a really great online store, and it’s even more interesting because it’s lower priced products.

In an interview with Advertising Age several years ago, a colleague illustrated your “unflappable” demeanor with a story about how, when you were pregnant, you made sure staff got to a screening before you headed to the hospital to have your baby. True story or urban legend?

Actually, I went to the screening with them and realized, “I can’t sit through this.” I went to my doctor’s office and my daughter was born about 20 minutes later.

Gilt is growing quickly while many retailers are shedding jobs. Can you share any insight about the company for people who may be interested in applying for one of your dozens of open positions?

We have 104 open positions right now at every level – we’ve got openings for stylists and art directors at our photo studios, we’ve got openings for warehouse employees and we’ve got openings for senior buyers and senior marketing executives. It’s a big range. We’ve been hiring very quickly.

We are launching a much more expanded home collection, we’re launching men’s as a separate site, and so we’re building out those teams as we speak. This is a much more complex business at scale than you would think. It’s a pretty easy business to enter, but it’s a difficult business at scale. We are moving tens of thousands of SKUs in and out all the time. We have new products every day; there is no core inventory here. So sale operations, warehouse operations, receiving, shipping, the tech platform, are all very complex.

This is a business where everybody comes at the same time. Shoppers all come to the door at about 11:55 and they race through to be the first people into the sale. Several hundred thousand people are trying to add to cart at the same time or trying to get through checkout. It needs very good operational minds, very good technical minds and great merchants who can both source and create sales.

You spent almost nine years with the Walt Disney Company where you served as president of ABC Entertainment, developing television shows such as Desperate Housewives and Grey’s Anatomy. What’s your favorite TV show right now?

Glee. It’s fantastic because it breaks all kinds of rules. It’s trying something very ambitious and those are always the shows I like best. Most of the time, they reach too far and something doesn’t work. This one happens to be awfully good.

Where do you look for inspiration?

I do a lot of reading, I look at a lot of magazines, I go to a lot of art galleries, and I visit a lot of stores. Also, I’ve got two daughters who are 24 and 20, and two step-daughters, and they’ve got tons of friends. Their friends are a huge resource for me. I see how they dress, I see what obsesses them, what shows they watch, what stores they walk into, what sites they access, and that’s hugely valuable.

You’ve been in the retail industry now for nearly a year. What have you learned that has surprised you?

I can’t tell you this completely surprised me, but it did confirm something for me: the customer is very smart. They are very savvy, they know what they like, and they’re generally right. You’re never going to be able to sell something—no matter how beautifully it’s presented—if it’s not pretty great, particularly in this economy.

I think that the people who are drawn to fashion at any price point tend to have looked at enough clothes over their lives that they are very savvy shoppers. They’re always going to be able to find the gem wherever it exists. We are well-served to watch them.

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One Comment

  1. Sam
    Posted December 9, 2009 at 3:44 am | Permalink

    Even in a recessionary economy, the fashion and luxury segment has continued to flourish. Specially the concept of event based online sales… i guess the temptation is the huge discounts as well as the ease of online shopping. All you need to do is to click your mouse (and of course drain your bank account). Even the Asian market is attempting to replicate the success on the lines of Gilt, Rue La La and Ideeli. Came across which is trying to bridge the gap between fashion enthusiasts and luxury brands in India. I am sure more online stores will come up in the near future.

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