Reaching High-End Customers With Gilt City

Gilt City differentiates itself from its group-buying competitors by providing deals to a niche high-end market.
May 07, 2012

Retailers and brands looking to attract high-end customers are often hesitant to use words like "discount" and "coupon" to describe their limited-time offers. Instead, they prefer to use words like "flash sale" and "exclusive deal." Gilt City is a local marketing platform that understands this concept well, giving merchants in 13 major cities a way to reach the elusive, luxury consumers they want buying their products.

How It Works

Gilt Groupe members in over a dozen cities around the U.S. can sign up to receive regular emails with exclusive offers from restaurants, spas, salons, gyms and events in their towns. Unlike Gilt Groupe's traditional flash sales, which offer discounts on goods and services that can be purchased online, Gilt City deals are meant to help people explore new businesses in the cities they love. Each Gilt City sale lasts for one week, or until the deal has sold out, and members can redeem their offers by displaying special codes on their smartphones or presenting merchants with vouchers they've printed out.

Gilt City in Action

Merchants with high-end offerings have flocked to Gilt City since its debut in 2010. With only 2.2 million subscribers, Gilt City has a much smaller footprint than competitors like Groupon, which has more than 115 million subscribers. What Gilt City lacks in size, however, it makes up for in precision. Seventy percent of subscribers have a household income above $100,000, 55 percent spend beyond their offer amounts, and 66 percent are between the ages of 20 and 39.

Those were the exact customers that Cookie Couture co-owner Jael Toledo was after when she ran her first deal with Gilt City in 2011. Toledo opted to work with Gilt City instead of competitors like LivingSocial or Groupon because she felt the niche site could introduce her company to the type of high-end clients she had difficulty reaching through traditional advertising methods in the past. Toledo offered Gilt City subscribers a deal they couldn't resist: $10 for two dozen cookies. She ended up selling approximately 50 offers during her weeklong run.

Why It Works

One of the biggest complaints lodged against traditional deal sites is that they bring in one-time "deal seekers" who aren't willing to pay full price for products and services they've already gotten at a discount. Gilt City has found a way around this problem, by leveraging its existing Gilt Groupe membership base and courting young, affluent subscribers in each of the cities it serves. Gilt City subscribers can afford to pay full price for the products and services they're trying out at a discount, and 70 percent say they're likely to return to a business they visited through Gilt City.

Additionally, merchants don't have to worry about being overrun by customers in the days and weeks after their deals go live. Offers published in Gilt City's email newsletters are seen by far fewer people than Groupon or LivingSocial, and they often have caps that prevent too many deals from being sold at one time.

Maximizing the Benefits

One of the ways Gilt City has attempted to differentiate itself from competitors is by giving merchants access to its expert curators and editorial staff when putting together new deals and exclusive offers that fit with the Gilt City brand. Merchants who hand over the reigns to these professionals after explaining their specific marketing goals can expect excellent results, since Gilt City's curators know which types of offers get noticed by the company's high-end consumers. Gilt City's editorial staff is also adept at creating compelling text and photo packages to go along with each deal they promote.

Read more "How It Works." 

Stephanie Miles is an associate editor at Street Fight. She is based in Portland, Ore.

Photo credit: Gilt Groupe