This Website Has Me Feelin' Less Gilt-y About My Addiction

I wish I could quit you.

Two years ago, I was invited by my fellow fashion devotee to a website that further fuels the shopping addict inside of me. Gilt.com is a pure play retail website that sells high-end designer clothing and luxury labels at “sample sale” prices (up to 70% of retail price). The site is invite-only; current members invite friends by sending them e-vites with a link to Gilt.com to activate their membership. Members receive emails every Monday summarizing the sales that will occur throughout the week, and what dates and times they will be commencing. The company works with over 200 women’s, men’s, children’s and home brands and labels, and each day features a couple brands’ merchandise for sale for a limited time of 36 hours, or occasionally, until the merchandise runs out. Members are able to purchase up to 10 items at a time, and returns are given store credit, much like any other store’s policies, and if you ship it outside of New York State there is no sales tax! I digress on the minute details of Gilt.com that make me all warm and fuzzy inside, but anyway...

The formal business name of the company is Gilt Groupe, which was founded by college friends Alexis Maybank, whose past accomplishments include serving as General Manager and business Development Director for AOL's ecommerce businesses, and also was one of the driving forces behing eBay’s expansion; and Alexandra Wilkis Wilson, who has worked for multiple luxury brands including Bulgari and Louis Vuitton. Based in the Chelsea neighborhood of New York City, Gilt Groupe, with the help of venture capitalist firm Matrix Partners, launched Gilt.com in 2007, and has had and continues to see a steady increase in membership and publicity since its inception.

Ignore the blue line: Ruelala.com is another luxury discount retail website that is on the rise--but that is neither here nor there.

Gilt Groupe has capitalized on a concept that is somewhat lacking in the webosphere; luxury and designer companies have steered away from selling merchandise online due to the possibility of destroying the quintessential allure of luxury goods; exclusivity. However, by not utilizing the online market, luxury brands were missing a grand opportunity to rid them of their less successful merchandise inventory. As told to Forbes.com, Maybank explains, “Existing online channels weren't protective of the fashion and luxury brands, resulting in a bit of a heartburn for those companies.”

Gilt.com strategically accomplished this uncharted e-territory by using business models that maintain the prestige of the brands while allowing consumers to purchase luxury items at sample sale prices. Gilt.com uses both subscription and virtual merchant business models. Through using the subscription business model, more particularly invitation-only, allows the website to have exclusivity by using established members to recruit people whom they think will appreciate the website. Therefore, the membership community itself expands the consumer base with people fitting the target demographic the company looks to reach, meanwhile spreading word-of-mouth through the “right crowds” about the website and increasing people’s desire to become a part of it.

Gilt Groupe’s use of the virtual merchant model is also quite strategic and plays upon the company’s strengths; the established reputations of the people that make up Gilt Groupe make for a prime breeding ground of building strong, loyal relationships with luxury companies and designers and they’re willingness to sell their inventory directly to Gilt Groupe without revenue sharing that would be present in an affiliate model. Gilt Groupe has also defeated the notion that with online retailing comes the death of luxury boutiques. Retail anaylist Marshal Cohen reassures that “ten years ago they said the Internet would replace traditional brick-and-mortar. It didn't quite turn out that way, and both have learned to coexist.” It hasn’t fazed designers and companies to want to do business with Gilt Groupe; co-founder Wilkis Wilson admits that “I have so many brands banging down our door that I have to say no.”

In terms of measuring Gilt Groupe's performance, there are two very vital elements that create Gilt Groupe's success; membership rate, and the amount of revenue. When looking at the unique visitors chart shown above, it seems as if although Gilt.com membership is increasing, other similar websites to jump on the bandwagon are seeing higher numbers. This is where I see the whole "luxury" marketing and business tactics as a hinderance to success in numbers; the whole idea of exclusivity through their lack of use of traditional advertising and focusing more on word-of-Chanel lip gloss shelacked mouth may be a cause in their lagging behind their competitors in terms of accumulating memberships. However, the amount of revenue that the company is accumulating from retail is the true telling of the success of the actual purpose of the website: selling goods. Window shopping doesn't count in the real world, where it's "all about the Benjamins."

=more Benjamins than I will be making as a college graduate next year.

Holy Illusions of Privilege!

"Not cool, France. Not cool."

While updating and educating myself on who is stealing what from whom these days, I found out that even national governments cannot even get away with misusing and violating us lowly common folk’s creative material. Last week, Brooklyn-based indie rock band MGMT decided to take legal action against the French political party Union pour un Mouvement Populaire, or UMP, claiming copyright infringement.

Allegedly, the French equivalent to the U.S.’s Republican Party has been using the song “Kids,”a popular song off of MGMT’s most recent album, during their campaign without permission. The current president of France, Nicolas Sarkozy, represents the UMP party, and condoned the usage of the song during party meetings including its national congress in January, during a field trip by the President himself, and in two official political videos on the UMP website. The UMP holds the majority of seats in the French government, not to mention the presidency as well. What is most ironic about this case is that the UMP is known for its strict views on filesharing and is at the forefront for prohibiting the infringement of creative copyright. Considering their stance on this public issue, it came as a shock to the MGMT camp that although the UMP’s public relations representative willingly admitted to using the song without permission, they stated that it was “unintentional” and offered the band nominal damages of one euro. MGMT’s camp rejected this ludicrous offer, and the band’s lawyer, Isabelle Wekstein, expressed their disgust to American Free Press: "This offer is disrespectful of the rights of artists and authors. It is insulting...we are dealing with acts of counterfeiting, an infringement of intellectual property."

Also, in the most unfortunate of timing, the UMP has planned to present an anti-filesharing bill to tighten the laws regarding the usage of peer-to-peer software, among other things, to the national assembly in early March. Wekstein addressed this irony to French newspaper Le Monde: "It seems that those who led the charge against internet users are not the most respectful of copyright." Interesting.

What does the center-right-winged party have to say for itself? The General Secretary of the UMP, Xavier Bertrand, has issued a response to MGMT’s charges, saying "The UMP is very respectful of copyright. Compensation has to be expected... and we are presently looking at whether the band was fairly compensated." What Bertrand is referring to is the review of the band’s relationship with SACEM, which is a French creative rights agency, its main purpose being "to collect payments of authors’ rights and redistribute them to the original authors and composers and the publishers." The notion is that the usage of the song was arranged with SACEM, and MGMT is to be awarded their royalties through the organization itself. Wekstein does recognize that the UMP paid the standard fee of 53 euros to the organization, however, she stated that the payment does not cover the continual use of the song in multiple situations and multiple channels following the initial use of the song. Ergo, the MGMT camp will continue pursuing the case.

Taking a step back and looking at this situation from a legal and ethical standpoint, whether the content is digital or not, MGMT’s material is not an invention nor is it a term or image that represents the band for marketing purposes, but is an issue of creative expression. Therefore, MGMT’s songs could not be patented nor trademarked, but are copyrighted. Under copyright law established by the Copyright Act of 1976, sound recordings are considered a form of expression and therefore obtain protection of copyright legislation. Also, materials of creative expression do not necessarily have to be officially registered in order for them to be protected under copyright laws. Once the creative material is finished, the creators become the owners of the material, and therefore obtain the rights to reproduce, distribute, perform, and create derivate versions of the material. Other parties even have to receive permission from the owner of the creative material in order to “remix” (to take the essence of the material and alter it to create another product) the original work.

The defense that a party can utilize to justify the usage another’s creative material is fair use. If the case is settled out of court, the French government will have to prove that the use of MGMT’s song, “Kids,” was within the boundaries of fair use. Fair use constitutes using creative materials for criticism, comment, news reporting, teaching, scholarship, and research. Also, there are many factors that considered when determining fair use defense; the purpose of use (whether it is for commercial gain or non-profit), the nature of the copyrighted work (whether it is factual or fiction), the amount of the copyrighted work that is used (whether it is partial or whole), and the effect on the owner’s market share (whether or not it has caused the owners to lose revenue).

The UMP party could make the weak argument in court that they didn’t technically use the song for commercial gain (although it is noted that the song is one of the most popular songs amongst the young adult population, which may give them a non-monetary gain of reputation amongst that particular market) and that it hasn’t been proven that it has caused MGMT to lose any revenue. However, the fact that they used the song for a purpose that can’t be categorized under the bases of fair use, let alone that they used the song in its entirety multiple times without paying the amount deserved to owners of the material, could be enough to make their argument moot. Regardless of the case’s outcome (which, in my opinion, seems like it will end in favor of the MGMT camp), the UMP is dug itself into an embarrassing public relations ditch, has done more harm than good in its efforts to attract the young adult’s favor, and has damaged the party’s reputation and whatever image of honor and legitimacy that they have.

Guess you’re not that cool with the “Kids,” Sarkozy.

Plus, Mongolian Shoe BBQ sounds like it tastes better.

After wasting countless amounts of hours using NikeID as a means of entertainment (and sadly, procrastination), I now have to look at one of my used-to-be favorite things to do online in a completely different way; not as a consumer, but as a marketing whiz. I used to mess around with NikeID all the time in its first stages, although I will admit that I have never visited Puma’s Mongolian Shoe BBQ website. However, once I heard the name for the site, it definitely intrigued me and got me interested to see what the website was all about. 

From a marketing perspective, naming Puma’s custom shoe brand Mongolian Shoe BBQ was definitely an interesting marketing tactic; it’s a unique name that doesn’t have any relation to or any resemblance of any other brand name in the market and therefore establishes themselves as something unique, different, and edgy. Not only does the brand name contribute a differentiating quality to the brand, it also is a brand name that is very difficult to forget when a consumer hears it for the first time, therefore upping the likelihood for good brand recall amongst potential customers. Puma also made the interesting decision to almost completely disassociate their customized shoe brand from that of the parent company; the brand image and marketing approaches do not resemble that of the parent company’s in the least besides the products having the same logo and brand name on the actual products themselves. Also, the company’s brand image and marketing tactics are more abstract, alternative, and modern in terms of its artistic approach, which is good in that it is progressive and keeping up with the trends of not only their target market of young adults, but also keeping up with the trends of online businesses and their websites as well. Their adoption of the Mongolian BBQ as their identity seems to carry over a little too strong however; the presence of the  concept seems to cloud the actual purpose of the website as marketing, which is to educate the consumer about the products and not to confuse them to actually believe that it is a website for a Mongolian BBQ restaurant. However, for those that are keen enough to get over that millisecond of confusion, I think that Puma’s approach to their customized shoe sub-brand is quite fresh, progressive, and most importantly (in my opinion), quite creative.

Nike, on the other hand, incorporates their own company identity into their customized shoe brand, NikeID. NikeID incorporates a very similar brand image, website design, and marketing as the parent company. This could be a beneficial move for Nike in that the company is very widely known and has a strong, stable reputation that has been successful throughout its lifetime; everything that has Nike’s swoop stamp on it, or is even associated with the brand (i.e. Nike and Apple’s partnership in the Nike+ product line) seems to be an immediate success. Also, NikeID’s marketing and brand image concepts, like that of its parent company, are a little more mainstream and more appealing to the general population than Mongolian Shoe BBQ’s abstract, unique brand image; the look is sleek and seemingly simple, which may seem more approachable to consumers. Also, Nike creates products for almost any type of lifestyle and interest; they have established a reputation of providing shoes for almost every type of consumer need when it comes to athletic wear, whereas Puma is seen as being in the niche of European fashion footwear, or specializing in soccer and tennis shoes. By Nike using the strategy of branding their customized shoe line as a branch of their own existing brand, they are simultaneously attaching the company’s established reputation as well as its brand image. 

In terms of the actual experience of both of the companies’ online shoe customization companies, they both offer the same service in that any person can go onto the website, freely design the shoe of their choice through a step-by-step process, and purchase them to be sent to wherever the customer chooses. However, there are differences in the products, the price, and the design of the customization process that causes the customer’s experience to be different on one site than the other. 

Mongolian Shoe BBQ’s website starts off with a Flash intro that may be confusing, but it then goes on to the actual website where the customer is shown the options available to him or her, and is guided through the step-by-step process of customizing one’s own shoe. Simple windows are displayed with basic questions and with simple ways to answer them. For example, the first window that pops up to customize a shoe displays the three models of shoe the customer has to choose from in a blank, almost blueprint format, and the customer clicks a check in the box of the shoe of their choice. A downside that consumers might find in Mongolian Shoe BBQ is that they only have three shoe canvasses to choose from, however I believe that all three shoe canvasses have something for any consumer and are equally as stylish, therefore I do not have a problem with the amount of choices available. In the customization process, the actions and options are all displayed and marked accordingly, allowing for little to no confusion as to where to go to do any sort of customization. There are displays of the views the consumer can have by simply clicking on the display of the view of their choice, and there are always written messages to consumers alerting them about which step of the process they are in and what will be coming next. In terms of customization options, Puma has many different types of materials and patterns that are unique to its brand and the market itself. Once a customer is done, there are multiple options displayed at the bottom of the page; a customer can either create an account on the website (which is an easy, two-step, email and password system), save his or her design and move on to the next one, buy the customized shoe in an actual Puma store, add to an online “shopping cart” and make another, or buy the shoe immediately. Quite importantly, the graphics of the products are animated, however they look incredibly realistic so that the consumer has a better sense of how the actual product will turn out.  Mongolian Shoe BBQ’s most expensive shoe is $130 and the cheapest $100, and are delivered within 5-7 weeks. I believe that for the amount of customization a customer is able to do with the products, that the price and delivery timeframe are quite reasonable. 

Nike has a similar process in that it is step-by-step starting from the customer choosing the model and ending with a customized model of it, however, their website and the actual technology involved in it isn’t necessarily more advanced than that of Mongolian Shoe BBQ’s, it is just laid out in a more complicated way. Since my days of playing around the NikeID website, I have returned to find it quite cluttered and dysfunctional. The amount of choices available to the consumer is overwhelming, and are displayed in funky, crazy, customized colors instead of canvasses, which I believe is distracting from the shoe’s design. Once a customer has chosen their shoe model, they are taken to a customization page with overly simplistic buttons that have no indicators of which button means what and where to go to next. After stumbling around to find out how to customize, it only goes on to more complicated and hard-to navigate steps. NikeID also doesn’t display the shoe model prices upfront, which may be disconcerting to a price-sensitive customer who has no idea how much their design would cost if they decided to make one in the first place. I, for one, could not even customize one because whenever I chose a model, a window would pop up saying that the product was unavailable and would direct me to a page where ALL available products were displayed--mens, womens, kids, and apparel--which all ended up “not being available as well. NikeID also takes much more time to upload onto every page and to do anything for that matter, and customers may have to stop and reload to get to some pages. All in all, I feel that considering Nike’s reputation, NikeID’s clumsy layout and customer experience does not represent the company well. 

In summary, I believe that the analogy of Mongolian Shoe BBQ as Facebook and NikeID as MySpace is quite fitting. Mongolian Shoe BBQ, like Facebook, might not necessarily be the first of its kind in online shoe customization, however, seems to have created the more modern and effective way of developing their product. NikeID, like Myspace, may have been the first of its kind, but has gone overboard with the amount available to the customer and isn’t laid out in a customer-friendly way, almost as if they have lost control of their own product. I am actually very pleased with my experience on Mongolian Shoe BBQ’s website, and plan on purchasing my customized model of shoe, when I have enough expendable income that is...

My New Job Is Kinda Awesome

So, I'm doing an internship with Rockit Ranch Productions this summer, and I figured since I already started a blog, I'd start journaling about it. Don't worry RRP, I will remain loyal to my disclosure contract.

So anyway, here's some information on this new event that I've been personally working on. It's kind of a big deal.

The A-Team of The Underground, the same people who created some of Chicago's favorite venues like Le Passage, The Dragon Room, and Rockit Bar & Grill, are creating another movement that is bound to be huge. Premiering Thursday, June 12th, is The Rewind at The Underground. Every Thursday from 9PM to 4AM, The Underground will represent all things old school for our generation; everything you love from the 80's and 90's. That's all I can say for now, so come check it out and see for yourself. Who doesn't like to kick it old school every once and a while?

Again, here are the details:
The Rewind premieres June 12th @ The Underground
Located at 56 W. Illinois, between Clark and Dearborn
Every Thursday 9PM-4AM

See you there!

Oh, and one more thing...

We made a Chuao Wiki page! There's more to come!

visit the page here, I'm sure there will be more information to come as the company gets bigger and more successful!

This one's for you, Kim Gregson

Hiya Kim, just in case you didn't see, there were blog posts based in April that I didn't get credit for because of the same problem as the rest of them-- in the middle of working my internet cut off and then wouldnt let me sign back in again. It's the one about SunChips and the one about new laws for viral marketing in the April section that looked empty.

Besides that, I've enjoyed your class alot, and I know everything that I learned will be VERY valuable in my hopes to have a career in buzz, viral, guerilla, and all things cool--marketing. Hope you're looking forward to the Chuao presentation, bring your appetite!

GO CHUAO!!!!!

A Semester's Reflections...

When I learned about my mandatory assignment of venturing out into the blogosphere to report on viral marketing, it was very intimidating because I didn't have any experience nor much knowledge of both blogging and viral marketing. But what I learned from this assignment is that both of these things are becoming increasingly important and influential in our culture and society.

I had just become familiar with the growing activity of blogging and gaining an understanding of its increasing influence on society. Elements of legitimate cultural reference such as TV, news, talk shows, magazines, etc. have been using bloggers as reference as well. This is when I realized that with the impact of the internet growing in our society, elements available via the internet would be increasingly influential as well.

This revelation was very inspirational to me, and I look at this phenomenon quite optimistically; by people recognizing and acknowledging "bloggers" opinions, they are simultaneously recognizing the opinions of the general public; the "average Joes and Janes"-- their opinions and thoughts are being broadcast to whoever comes across or searches for it, and by publicizing it on the World Wide Web, makes their opinion visible and recognized by everyone: newscasters, Steve Colbert, and plain Joes and Janes everywhere.

So although I was apprehensive at first to take the plunge into the very open, publicized world of blogging, this realization gave me another optimistic outlook about it; that my opinion could be heard and recognized by either classmates or respectable people in the very industries that I hold to a high regard and hope to be a part of. Enter my blog topic: buzz and viral marketing, two very important modes of advertising not only in the wonderful world of marketing, but to myself as well. I hope to make a career in attracting people to products, services, and/or establishments in unconventional ways that blow their minds. Viral and buzz marketing are two great ways to do that.

In researching current happenings in the buzz and viral marketing industry, I came across patterns, concepts, and themes that contributed to a so-called "how-to" manual of viral marketing that has been developing in my brain. The most evident form of viral marketing is the utilization of the web video, whose popularity can be credited to the web phenomenon YouTube. Many of my blog entries had to do with viral campaigns that predominantly consisted of webisodes or short web clips- like online TV advertisements- such as the AirTran campaign (my favorite concept), the tourism company webvideo advertising, the Tassimo webisodes, and another type of video viral advertising that is a trend in its own right; viral campaigns for movies.

Within the timespan that I've been writing this blog I have covered two viral and buzz movie campaigns, the Dark Knight and the Quarantine campaigns, which are among many others that have happened within the year. This new trend typically utilizes YouTube to post realistic videos relative to the plot of an upcoming movie (ones like the pioneering Cloverfield videos), and ties in movie characters and their own storylines through creating blogs and websites for the characters and/or elements of the movie plot.

Although this approach is incredibly creative and interactive, I wonder whether progressive audience research methods could measure the amount of effectiveness and whether it decreases with the amount of movies that decide to copycat this type of viral advertising. If the opportunity just so presents itself in a job or internship I have in the future, I can utilize the knowledge that I attained throughout this course to find different modes of assessing the effectiveness and creating different types of viral advertising that may have the same effect on the target audience of these videos, but in a different way so as to not be repetitive and therefore receive negative reaction to the campaign.

One tactic of viral and buzz advertising that seems to be prevalent and successful is to keep the viewer guessing or moving along to find more. These movie campaigns always have a sense of mystery about them that makes viewers want to see other clips, visit other websites, and read blogs pertaining to the movie in order to find out more bits and pieces about the plot and to be immersed in the experience. Even a simple reference to a home website in a viral video or interesting banner will impact website traffic, which is the tactic used by Pepsi's Tava, AirTran, Tassimo, and even Hillary Clinton!

The last and my personal favorite and most important trend in viral and buzz marketing is humor. As referenced in fellow IMCer, and buzz and viral marketing blogger (with whom I share the same name) Kristen's blog, 88% of content that people send or pass on to others is of humorous nature. People are impressed and seem to warm up to stereotypically stoic businesses who have the capability of entertaining and getting a genuine laugh out of consumers. My personal theory is that these companies seem more personable, and especially when used in a viral campaign on a medium as personal and accessible as the Internet, they gain an affinity with the public that is otherwise virtually impossible to attain.

All of the trends that I have picked up in my time assessing the viral and buzz industry can almost make it seem like viral and buzz marketing is a trend within itself. The content is always up-to-pace, never dated, yet is so expendable when it comes to the next hot viral campaign. But what people, especially those in the marketing industry, must know is that the internet is not a trend, and it is here to stay. When covering the success of the online advertising regardless of an economic decline and the success of viral marketing, I realized that this is a piece of knowledge that I will carry on and utilize in my career in the marketing industry. What this blog and this class taught me is that the internet is the future. Technology is the future. Creativity and progression is the future. And I look at the industry and my contribution to it with these things in mind.