At TechCrunch Disrupt on Wednesday, The Future of the Market Is Social panel was stocked with executives from new media commerce companies that have seen impressive growth in the past few years. Rather than trading on low prices, companies like Gilt Groupe, Etsy and OMGPOP work to develop other sales advantages. And they all emphasized the role of community in their sales efforts. But going forward, they agreed that retailers will be relying on another trick to sell goods: game theory.

For example, Gilt Groupe has been around for 2.5 years. In that time, well over half of the members have been referred by existing members. CEO Susan Lyne calls it a multiplier effect. The company has used consumer sharing to grow their business rapidly in its short history. There are now more than 2 million members purchasing goods on the site.

Many shoppers treat Gilt like a game. A trend that the company has used to great advantage.

"There is definitely a game mentality when people come to Gilt," says Lyne. Members use various strategies to purchase products on the site, including shopping in groups and reverse browsing the site to get items before they sell out.

"One of the things that continues to intrigue me," she says, "is the number of people who will say: I won something on Gilt."

Considering the price of many goods on the site, that is one expensive game. But companies like Gilt work hard to curate goods and the people who might buy them.

Rob Kalin, CEO of Etsy, says that historically, marketplaces have always been communities.

"The way I see the trends in social shopping is that different frameworks work for selling certain kinds of goods. You have to create different game mechanics around it."

John Caplan, CEO of OpenSky, says "what's really missing in e-commerce is storytelling."

He says that online people value relationships, "someone you trust sharing what they love. More and more people crave that."

There is no doubt that products are abundantly available online. But the panelists agreed that the shopping experience online succeeds best when it is personalized. According to Lyne:

"The challenge for ecommerce right now is that it's just so big and all encompassing when you go to most sites. It's work. What Gilt did in its first iteration was to make it simple, fast and fun. It's never boring, it's always new."

Gilt does that by having short-term sales that are available to a small group of subscribers. But Lyne saw a commonality among all the retailers on stage.

"All three of these companies make shopping about discovery, not about a task. You don't go to Amazon to play. On all of these sites, it's as much about what am I going to find as it is about what do I need to buy."

For Etsy's Kalin, the real test of an entertaining shopping site is whether people go on it while drunk:

"It's all about the serendipity of finding something you like. You can't do that in a Walmart, where people are just there to keep you from shoplifitng."

Etsy now has over five million members, and Kalin is working to build the growing community aspects of the site. He says:

"Our general approach is to put people above products. The community part of that becomes huge. For me, what makes it fun is figuring out what you can do on the web that you can't do elsewhere."

Meghan Keane

Published 26 May, 2010 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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Comments (4)


Daniel HAYTER, Project Manager at

There are two points I don't quite understand in reference to the Gilt webste: a) reverse browsing. How does this work? b) group shopping. I don't see how this is facilitated on the Gilt website? Could you elaborate? Regards, Daniel

about 8 years ago

Meghan Keane

Meghan Keane, US Editor at Econsultancy

Hi Daniel, Susan explained that many Gilt members browse the site from the bottom up, going to sales at the bottom of the page first and then browsing from the bottom of sales because most viewers start from the top site and scroll down when browsing. The theory is that they will get to items before they sell out this way. Group shopping isn't a feature on the Gilt site, but Susan said that some members make plans with friends to shop the sales together — divvying up the brands on a given day — to have a better chance at the items they might want. Best, Meghan

about 8 years ago


etsy seller

"For Etsy's Kalin, the real test of an entertaining shopping site is whether people go on it while drunk"

This will horrify Etsians most of whom make products ethically and sell at tiny margins all in a perhaps naive effort to create something more sustainable than mass production. Etsians mean well in the way that Americans often do mean well. That what they are doing comes down to whether someone is drunk enough in the eyes of the site's founder will shock them as much as Mr Integrity has shocked his liberal friends here at home this weekend.

about 8 years ago

Meghan Keane

Meghan Keane, US Editor at Econsultancy

etsy seller, I think Rob was saying that pretty tongue in cheek. He was talking about how people enjoy shopping on Etsy, and often do it as entertainment. It wasn't meant as some sort of insult to Etsy sellers. It was a compliment — they make products people enjoy browsing through. Even when they've been drinking.

about 8 years ago

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