Gilt City’s Richardson: Aiming Offers at the Local Elite

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Most online ventures aimed at local markets tend to cast a wide net — targeting content or offers to a wide swath of consumers based solely on their location, and pulling sponsors and advertisers from local merchants. Gilt City, the localized offers arm of Gilt Groupe, has taken another route, targeting only the very wealthiest consumers in a handful of around the country with pricey-and-luxurious member offers and and events (featuring brands that aren’t necessarily local in nature).

We spoke recently with Gilt City’s president, Nate Richardson (who will be appearing at Street Fight’s first industry summit in October), about how the company localizes offers for the wealthiest people in various markets across the country, and how niche targeting can work for local online.

Gilt’s brand is built largely on notions of luxury and exclusivity. As Gilt City expands into new markets and looks to reach a larger audience, how do you retain that?
The beauty of what we’re doing is that it’s somewhat self-selecting, just by the price points on the site. Our price points are generally a little bit more elevated than others in the market, and what we offer is generally a bit more considered. We’re doing five-course tastings with restaurants with wine pairings, not “go in and get your hands on a meal just because it’s cheap.” We’re very much taking the approach of “we want to do things that are smart, right for the brands, and right for the top restaurants, but not just chasing people into places.”

Our growth will be more measured than people that are doing the fast food of what we’re doing. We’re going to be careful not to do things just for a quick hit; we want to be in relationships for our brands for a long time. We also recognize that sending them 3,000 customers probably isn’t going to work very well. The customers are going to be unhappy; the vendors are going to be overwhelmed and not be able to service them the way they want to turn them into a full-time customer; and it probably doesn’t make economic sense. So we’ve taken a very careful approach, saying: “Let’s do what’s right. Let’s do the number of units you think you can handle, put those on the site, and if you find that we had more demand for you, we can always go back to our wait list functionality and you can pace in the customers.” We will still grow. We’re still growing quite quickly. It’s extraordinary. But the growth will be aligned with how quickly we can add more deals in more categories, rather than the depth that might overwhelm a vendor.

We’re doing five-course tastings with restaurants with wine pairings, not “go in and get your hands on a meal just because it’s cheap.”

How do you establish these kinds of exclusive local relationships in new markets?
One, we hire locally. Having people from the communities where we’re operating who have established networks, who are first, or second, or third or fourth generation of a community. They love their city so much, that they are passionate and they want to be part of everything that’s going on in the community. We screen for that. We will ask people to curate a day in the interview for what they would tell three different characters to do from morning to night at different age groups. We would say, “Name the places you would go, and who do you know that you have relationships with there? Why would this give them the best impression of your community — whether it’s Dallas, Atlanta, or Seattle or DC?”

Two, we do a lot of upfront research and we also do a lot of upfront brainstorming on what are the major things that happen in a community that are important, and what can we do to be a better member of that community? How do we do things that will really demonstrate that we care about the city and we will be here for a while and we’re not going away and we want to be embedded with them?

So, I’ll give you a couple of examples. This week in Boston we took over Fenway Park and had a cocktail reception for members on the field, followed by dinner from Michael Schlow, who is probably one of the top chefs in Boston, in one of the boxes. Fenway is Boston, Boston is Fenway. I’m from Boston originally, and when I told my family we were doing that, they were like, “Whoa.” The emails and texts I’m getting from them are like, “I’ve never dreamt I’d do something like that.” That’s the difference. That’s what we do. We’re not a sausage factory cranking out “Just go buy a half off dinner at a chain restaurant.” We’re: “Let’s work with a top chef and think of something that’s truly iconic for that city.”

You have a new partnership with Foursquare — how does mobile figure into Gilt’s plans? Is the kind of person who’s looking for a deal on mobile the same kind of person who is looking for a “great experience?”
Foursquare is one of those early-adopter things for people that are probably on that trajectory to be in the rich category. They are in the early stages of discovery of learning about the great things and the finer things of life. While I think there’s probably a little bit of “Hmm, maybe they won’t go for the finer things,” I think that over time they are going to migrate to realizing that the curated experiences that we put together are the ones that impress them the most.

It’s not just a deal-for-deal’s-sake, but it’s part of a lifestyle movement. It’s not overnight and I don’t expect it to be, but I think we’ll see that trend emerging over time. I’ve been working in digital for a long time; sometimes things happen really quickly and take a couple months to take root. I think given the price points we have and the sophistication of the offers that we have, I would expect it will take a bit more time to educate customers on how we are lifestyle offerings, not just trying to get them to buy something because it’s cheap.

How important is it to tailor Gilt’s editorial voice to the specific cities you are aimed at?
Critical. We really invest in it and it’s a huge area of focus for us. If we were in a different state I would tell you the numbers of what we’re investing in against the cost of sales for editorial and for image and photography — but the reality is that we take enormous pride and effort in our images and we spend a lot of time refining the images and making sure we have the right images for a particular brand.

Where some brands may give us their photography — these are brands you’d be surprised by — we’ll get back with them and say, “Listen, doesn’t fly with us. We have standards around what we’ll put on the site. We don’t want a thumbnail from you. We want to make your brand really be romance and stand out with the image that we have.”

We have photo editors around the country that we work with, and we spend a lot of time on it making sure we have the best images. We then offer those images back to the brands to say, “We’ve done this for you, would you like this as a value added service from us? You can use these knowing that we took it of your brand. Then on the content side we do a lot. We spend a lot of time on it.

This interview has been edited for length and clarity.