Gilt's sales rate fell steadily from 2011 to 2014 as competition in the e-commerce sector increased. Gilt benefited early on from being a pioneer and having relatively low competition. However, as e-commerce boomed, competition grew and it became harder for Gilt to sell merchandise. Additionally, Gilt was founded during the recession when luxury designers faced decreased demand and sold through Gilt. But as the economy recovered, demand increased for luxury goods and designers had less pressure to sell through Gilt at discounted prices. As a result, Gilt's costs increased and its sell through rate declined.

1. Gilt Performance
and Market Trends
A snippet from the 2016 Hamline University Analytics Team’s analysis of
online luxury retailer “Gilt”; titled “Gilt and Redemption.”

2. As depicted below, Gilt’s sales rate fell steadily from 2011 to 2014 and has since very slowly recovered, but is
still a great distance away from its pre 2011 sales rates.
Our output variable is “Sell Through Rate.” This is the rate at which Gilt sells its stock of each product; we used it
to determine whether the sale was successful. A successful sale was one with a “Sell Through Rate” > 0.75.
Why did Gilt’s value decrease
so dramatically?

3. Why did Gilt’s sell through rate drop?
Gilt is a pioneer of e-commerce,
as such Gilt benefited from
relatively low competition.
E-commerce has boomed since
Gilt’s early days, bringing
increased competition.
Increased competition has
made it harder for Gilt to sell
merchandise.

4. Gilt was founded on the eve of the
great recession and benefited from
luxury designers facing a decrease
in demand.
As the economy recovered,
designers faced less pressure and
Gilt’s sell through rate decreased. Sell Through Rate & GDP
STR GDP
Why did Gilt’s sell through rate drop?

5. The fact that until recently, Gilt’s
average unit price has been
increasing while Gilt’s “Sell Through
Rate” has been decreasing fits well
with this story.
As the economy improved, demand
for luxury goods increased and
designers didn't need to sell goods
so cheaply to compensate.
Because of this, Gilt’s cost of
business went up and this has
been reflected in Gilt’s prices.
Sell Through Rate and Unit Price
Why did Gilt’s sell through rate drop?