|Wed Sept 23 2009 00:32:06|
Shop.org Showcases Radical Ecommerce Business Models - Woot!
By: Ina Steiner
The CEOs of the Gilt Groupe and Woot answered questions at a panel at the Shop.org Summit this afternoon in a session called "Reinventing Online Retail: Radical Business Models That Are Paying Off Today."
Matt Rutledge of Woot said of his site, which sells one item per day at a hefty discount, it's "the least you can sell and still be a store." But his modesty belies the success of his site, and fans of Woot were present at today's session. Susan Lyne of Gilt Groupe revealed new invitation-only shopping sites that her company is getting ready to roll out.
Joshua Goldman, General Partner at Norwest Venture Partners, did an excellent job as moderator, displaying an in-depth understanding of the two business models and drawing the CEOs into talking about their sites. The only thing missing was a guide on how attendees could utilize the models on their own websites, which surely they wanted to do after hearing the session.
Neither company wanted to be seen as a liquidator, and showed how manufacturers benefit from their services. The session was Standing Room Only, not surprisingly, given that retailers of all sizes are affected by these models and are likely searching for ways they can use these techniques themselves.
Gilt revealed it will roll out new sites called Fuse for shoppers who are fans of Gilt but are between 20 - 30 years old and find a $250 dress is expensive even if it is a discount, and whose lifestyle is more casual, Susan Lyne said.
Gilt will also roll out new sites for men that includes gear and gadgets, as well as a home goods site. They are also ready to roll out an iPhone app in a month.
The key to event shopping is selling known brands that are coveted - consumers crave and lust after them - and of course, there must be excess inventory, according to Susan.
As for Woot, it uses a unique blend of content and community. "The marketing we do is to entertain, not to sell the product," Matt said.
I've been in correspondence with Matt Rutledge, who promises to tell me more about deals.woot.com that will roll out shortly, and it was a pleasure to meet him in person after the session. As the grand-daddy site of daily deals, I think there's something coming that will interest powersellers, so stay tuned.
Here are some short notes I took during the session.
Is it all about money?
Gilt Groupe: It starts with idea of a great deal - that's why people sign up. The reason they stay is because it's exciting. We bring the excitement back to shopping - there's a gaming element - competitive shopping. And it's easy. (isn't that what eBay used to be?)
Woot: Some of those same elements are on Woot - there's an addictive quality. It's efficient to run event sales online, and there's scale to doing it online. It's like Black Friday, everyday. When there's a confined amount of supply, it's interesting to watch the dynamic.
What about manufacturer's limits on minimum pricing (MAP pricing)?
Woot: manufacturers look at product life cycle, and we help them know when to let go. We operate as consultants to manufacturers.
Is this a problem you are solving, or are you a threat?
Gilt: Our 400 brand partners feel very good about the business. There are many benefits to them. Retailers are more threatened by it. I believe our sales encourage people to go to that brand's website. Vente-privee has found there are marketing benefits, including getting to know a brand on Gilt. Many of our buyers do buy full price, a lot.
Joshua Goldman had an interesting take on Woot - he said it would be like if the Daily Show took over the home shopping network for a day.
That kind of innovative approach to retailing is rare, and while there are copycat sites, no one seems to have created and maintained the kind of loyal following as Woot.
More from Shop.org to follow.