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Gilt Doubles Down on Flash Sale Model Despite Waning Interest

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"There's still this myth out there that flash is not exciting," Gilt's new CEO Michelle Peluso told Bloomberg. But she insists it is. "Flash is our core. We did take our eye off the core last year, but we've refocused and the performance of Gilt has improved quite a lot since then."

Under Peluso's reign, Gilt is doubling down on the flash sale model, which they had been moving away from under the company's former CEO, co- founder Kevin Ryan. Peluso replaced Ryan last February.

Gilt believes personalization is the future of online sales, and is investing in technology that will help them lead the industry. Bloomberg explains:

"By using data on customers' clothing sizes, preferred categories, favorite brands and browsing history, Gilt is offering special prices tailored to individual customers, betting it will get a higher rate of purchases. Peluso's reasoning is that shopping is more exciting if it is an event, and that sales will be more attractive if they're exclusive to a single person."

They're not alone. Fab—a company that is, notably, in a stage of hyper-growth similar to where Gilt was five years ago—has introduced a new "following" function that allows shoppers to track the categories they're interested in. Unlike Gilt, however, they have completely abandoned the flash sale model.

Basically what this all comes down to is that, still, seven years in, no one knows how profitable Gilt is going to be. Bloomberg says the company has stopped losing money and expects to generate cash from operations for the first time by the end of this year, and Peluso says refocusing on flash sales has helped profits. Venture capitalist, meanwhile, are saying the whole flash sale thing was a fad. Time will tell?
· Gilt Groupe CEO Seeks to Prove Flash Sales Are No Fad [Bloomberg]
· Fab Quietly Murdered Flash Sales This Morning [Racked]
· How Gilt's New Dress Shop Is Fighting Flash-Sale Fatigue [Racked]