Gilt is an online retailer of high-end fashion brands that focuses on an extraordinary level of customized precision to sustain customer engagement. It also cultivates excitement by offering member exclusive flash sales that provide discounts of up to 70% off hundreds of brands for a very limited time. And because the best items always sellout fast, Gilt also offers a three-tiered loyalty program called Gilt Insider.
Members start by simply collecting points but, as they continually increase in status, customers are invited to become part of Noir, which offers early access to flash sales. This prestigious membership level has become extremely popular with Gilt’s stylish customers.
Recently, Welington Fonseca, Vice President of Marketing and Analytics at Gilt, sat down with Loyalty360 to talk about some of these exciting projects.
What makes Gilt’s loyalty program unique?
Fonseca: It is called Gilt Insider and it is a three-tiered program. At first glance, the program is very traditional. Member points for shopping, for visiting the site, and for referring friends, which can be redeemed for merchandise and discounts.
In addition to those set of hard benefits, the program provides a number of soft benefits that is tied to the statuses members achieve as they migrate up. For instance, while all three tiers (Select, Premier, and Noir) give members early access to Gilt’s daily sales, we open our doors earlier to our best customers: Noir members can shop 30 minutes earlier than members who do not opt in to Gilt’s Insider loyalty program (Premier members shop 15 minutes earlier and Select five minutes earlier).
And about a year ago we also launched a concierge program, which is only for the top Noir members. And that entails a highly trained set of customer service representatives, Gilt Concierges, who function as personal shoppers, personal stylists, and professional fashion problem solvers. Those members also qualify to receive surprise and delight rewards, ranging from flowers to cocktail shakers to delicious chocolate-covered figs.
So understanding your customer expectations must be very important, correct?
Fonseca: Yes, very important. When you talk to our most engaged customers and ask them what type of loyalty benefit they would like, the top benefit is early access to sales. Because the good stuff goes out the door quickly. The cornerstone of our loyalty program is centered around early access. With Noir, they can shop 30 minutes earlier than our general public so-to-speak. That is a big deal to them. It is worth more than additional discounts.
Has this approach helped increase levels of customer engagement?
Fonseca: The program has been extremely successful. And it is amazing that, even for already highly engaged members, it continues to drive engagement and share of wallet, even to the point that we sometimes see things like customers sending letters to their circle of friends, which will also include their Gilt Concierge. These individuals see the Gilt Concierge as their close friend. They do establish those types of relationships.
And as we launch new sales every day, the concierge representatives also reach out to their customers and let them know in advance about new sales that will be going live. So they share that insider news. It is very often that we see customers making purchases because the concierge representatives reached out and made that contact.
How does Gilt create such a highly personalized level of customer engagement?
Fonseca: We have tools that we provide to our reps such as a personalization lab, which showcases our customers’ brand preferences. We also train them to look at customer brand mapping and how brands are related to one another.
It’s all algorithmically created and the drivers of that personalization are based on purchase and browsing. We look at “add to cart,” we look at clicks, and overall website visitation. We also always try to acquire self-profiling information through surveys and third-party data to further customize the experience to keep enriching the data that we have.
Searches are also important. And we have this concept of favorite brands. Customers can star each brand as one of their favorite brands. So what we are building is a personal profile of each member. That helps to drive our personalization engine.
Just how much personalization is Gilt able to accomplish through these processes?
Fonseca: To give you an idea, on a daily basis we send over 2,500 versions of our daily sales reminder email. We are close to achieving that same level of personalization through our mobile push notifications as well. And it is the same for the website. Each person’s landing page or home page is different from any other persons, because it is based on their preference.
We can also create personal sales that, for instance, appear on our members’ home page that relate to personal preferences or that was explicitly put together based on customer likes.
What are some of the biggest challenges that you are facing?
Fonseca: Retail is overall more challenging. 70% off is not as big of a deal as it used to be. There are also new social media aggregators. Brands that used to have only a few outlet channels now have a much broader reach from an online perspective. There is a lot of competition now.
Another challenge is segmenting and targeting communications (the so-called persona-based or life-cycle personalization, i.e. creating relevance above and beyond the merchandise we present to our members) on a daily basis to target individual customers differently. That is a challenge that a lot of companies are struggling with, and Gilt is no different.
For instance, say in one hand we have customers that are showing signals they will churn; in other words, they haven’t shopped in the same frequency as in the past. On the other hand, say we have customers that are very close to becoming one of the best customers. For the lapsed customer, Gilt wants to find out what is going on and perhaps offer free shipping to motivate them. For the second, very engaged customer, Gilt wants to give them a Noir trial.
So having the tools and the technology to automate and scale those types of highly segmented communications across all communications channels is not an easy task. Right now it is a big advantage for companies that are doing that better than anybody else.
About the Author: Mark Johnson
Mark is CEO & CMO of Loyalty360. He has significant experience in selling, designing and administering prepaid, loyalty/CRM programs, as well as data-driven marketing communication programs.