May 18, 2011

Innovation or Imitation?

photo via: Gilt

With dozens of online start-ups popping up each year, it is no doubt that online shopping has grown tremendously within the last few years. Gilt Groupe, for example, is one of the most successful online fashion businesses, pioneering the concept of flash sales. Goldman Sachs and Softbank of Japan recently provided $138 million in financing Gilt Group; and with the monetary support, Gilt is now valued at about $1 billion, according to Karen Yau Smith, vice president of Gridley & Co.

Calling the investment "a stamp of approval," Smith states that it is "a sign that Gilt is doing the right thing." With 3.5 million registered members a year ago, analysts value Gilt at around $1 billion based on forecasts that it will generate $500 million in sales this year. With its funds, Gilt plans to expand their business to new countries and further develop their Men's fashion and gourmet foods.

photo via: My Habit

Taking note of Gilt's success, Amazon, the world's biggest online retailer, recently launched My Habit, a members-only discounted online shop. Similar to Gilt, My Habit offers a limited time offer of designer and boutique brands at a reduced price. In a much more modern and sleek interface, My Habit separates itself from Amazon and is aimed toward becoming another competing fashion and lifestyle site.

While the last few years birthed a surge of exciting and innovative ideas of how to shop online, today we see less innovation and more imitation. Instead of developing original ideas, many companies are rather jumping on the band wagon of existing, successful concepts. Amazon's My Habit does not offer anything different than Gilt. And let's not forget all the others who are doing the same: Rue La La, Ideeli, Haute Look, etc.

Although it is true that all of these private sale sites offer their own exclusives, besides the actual product, there is very little that makes them stand apart. Gilt is successful because it was the first of it's kind, but trying to imitate what already exists with very little differences does not necessarily lead to an equally successful future. Customers today want to see something fresh, perhaps even a spin off of an existing idea - never a replicate.

Last year, we also discussed the rising trend of DIY and customization, highlighting several of our favorite companies. Today, we see that this trend has picked up exponentially with dozens of similar sites. From lingerie to jeans, to even a pair of shoes, anyone with Internet access and a credit card can claim to be their own designer.

photo via: NY Times

However, for most, the longevity of these new sites remain questionable as a NY Times editor recently wrote about her design/shopping experience and faced a multitude of problems in regards to fit, customer service, and overall experience.

For example, when ordering jeans, she was asked to evaluate every part of the jean, resulting in an extraneous, time-consuming process that was even more difficult than actually walking into a mall and trying on various pairs. Trying to create a "custom-fit" pair of jeans ended up being too daunting of a task and when the jeans finally came, the denim quality was too thin and unwearable.

While DIY design and flash sale sites will continue to grow and evolve, the future of many sites are sure to end quickly if it cannot offer something truly unique, while also being easy to use.

photo via: Where To Get It

One way to stand out from the crowd is formulating a combination of current ideas in order to create something new. Where To Get It is a new website combining the latest trends of online shopping, including crowd sourcing, personal style blogs, and social media in one, ultimately resulting in a completely different way of e-commerce. Where To Get It lets you find and buy your fashion inspirations by posting an image of a desired product. Members can comment with recommendations of where you can find the exact or similar product. As the site grows with hundreds of "quests," the site functions as a source of both inspiration and online shopping.

photo via: Wing Tip It

Wing Tip It is also a spin off of crowd sourcing and social media, but more focused on peer recommendation, asking for a friend or fellow shopper's advice before making a purchase. Each member can create their own online "closet," sharing their favorites with the site's community to finalize any decision. As online shopping is filled with an array of options, peer recommendation has become almost essential to a customer's purchase.

We all know that online shopping will never be the same as walking into an actual brick-and-motor store. However, we believe that the two can and will co-exist, each offering something that the other cannot. And while there are what seems to be an infinite number of online retailers, there are only a few who have truly brought something new to the table. As online shopping is still relatively a new trend, we strongly believe that there is much more room for potential. Innovative ideas are always out there, and we are sure to keep you updated of the latest (and best) ideas.

1 comment:

  1. I disagree. The experience on Gilt I sometimes have to wait a Month or more to get an item. The myhabit only takes a few days. Wouldn't you think that's quite the difference there? If anyone should copy, Gilt could learn a few things about customer service.


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