July 26, 2011
By the ZippyCart Content Team

Most iPhone and Android users are familiar with how freemium App content works. First, the user downloads a game from their respective App Store, which they can then play for free. The number of features or levels available to the free user are intentionally limited, encouraging the in-app purchase of the full game. This model has been very successful for app and game developers, and a recent report shows that the average in-app purchase amongst 3.5 million users on both Android and iPhone iOS has reached $14.

Here are some even more surprising numbers: Of all the in-app revenue generated, approximately 51% of that revenue comes from in-app purchases of $20 or more. Despite this fact, the overwhelming majority of in-app purchases (71%) are actually coming in at the lower end of the spectrum, ranging from $10-$20. Purchases greater than $20 come in at only 13% of the total number of in-app purchases. What’s more, the highest end of in-app purchasing is in fact suprisingly high, roughly $50 a transaction.

This news reaffirms the suspicion that smartphone users are more inclined to add an app to their shopping cart if they feel they are getting content for free, even if it is a limited experience. It also shows that consumers are more likely to upgrade their freemium experience if they are first given a sample of what they are buying.

Flurry, the company conducting the research, notes that digital distribution of games is throwing the portable retail game category for a loop. The market that was once dominated by the Nintendo DS and the Sony PSP is now being taken over by consumers who prefer to add digitally distributed games to their shopping cart. The revenue share of portable games on the iOS and Android platforms has risen from just 1 percent in 2008 to 34 percent in 2010. In turn, Nintendo’s market share in portable games went from 75 percent in 2008 to 57 percent in 2010.

Flurry also noted that games drive 75 percent of the revenue among the top 100-grossing iOS apps. 65% of the game revenue comes from free-to-play games, with in-app purchases driving the success of these titles.

July 25, 2011
By the ZippyCart Content Team

Just to give everyone a heads up, in case you haven’t heard: you can now listen to music over the internet. I’ll give you all a moment to soak that in before continuing with this article.

In case you haven’t been keeping track, Rdio and Spotify, different versions of basically the same service debuted or stepped up their US presence in the last month. What these services allow you to do is listen to a near-endless supply of music for a low monthly price, without putting a single track in your virtual shopping cart.

Previous online options included Grooveshark and Pandora, as well as Last.fm. Grooveshark gave you a lot of the same functionality that Spotify and Rdio give you, but without any of those messy big label contracts. As a result, music on Grooveshark could be spotty at times: songs and albums were mislabeled, and music disappeared without warning if a user (or more likely an artist or their lawyers) took it down.

Pandora was a more legal alternative to Gooveshark, but like cousin Last.fm, users had relatively little control over their playlists. Pandora played a random selection of tracks which you gave the thumbs up or down to in order to increase or decrease their frequency of appearance. You could also opt to purchase a track by putting it into you online shopping cart.

On top of all this, Pandora also slapped free users with a play limit of 40 hours per month, helping to incentivize paying for the the full version. While Spotify features an ad-supported free version with play limits, Rdio offers an ad-free one week free trial instead. For both services, only paid subscribers reap the full rewards of their record label contracts and can even listen to their playlists offline.

As Spotify shores up its American debut (long overdue, some music fans say), Rdio levels a shot right at their user base by offering their first to market iPad app. While they already had a desktop and iPhone app, the iPad app signals their first jump into the tablet market, way ahead of Spotify. If their Android app comes out of Beta any time soon and enough users adapt to it, they can possibly box out Spotify before it even fully takes root. Especially with all the Android phones going into shopping carts around the world.

Spotify’s current music quality issues back home in Sweden may also help hold back their success here in the states. It turns out that not all of the tracks on their premium service meet their own benchmark for quality, which may put them in breach of Swedish law.

July 22, 2011
By the ZippyCart Content Team

Online shoppers and browsers are extremely visual. One of the keys to having a good shopping cart or ecommerce solution is to have great pictures of your products and lots of them. However, even with this in mind, not many shopping cart owners strongly integrate a lot of video into their sites. Users want video experiences, such as product reviews and interviews, but they want to be in control. They don’t want the videos to hit them over the head. They especially don’t want videos (or music, or audio announcements of any kind) to automatically start playing when they enter a website. That’s a proven deal-killer.

Another way that video can help drive customer engagement and keep them interested in your shopping cart, site, or service is by using them to educate customers and introduce them to your team and your business. That’s where new video content service Pixelfish comes in. Using their innovative, self-serve ecommerce solution, small business owners choose the options that work for their companies and put them in their digital shopping cart, check out, and wait for the magic to happen.

With an easy to use system like that in place, it’s no surprise that they keep collecting money and prestige. They recently closed a four million dollar funding round led by Silicon Valley VC company Bullpen Capital. Supporting investors included Floodgate, Mack Capital, Tomorrow Ventures, 500 Startups, and Western Tech. They also made “Funded Ideas” list of Top 300 Startups.

Right now they carry  four “pre-built” options, broken up into two sets. One set is designed to “accelerate growth.” The other set is targeted at “building loyalty.” Think of it as the difference between drawing in new customers who’ve never heard of you vs. developing the relationships that you already have an encouraging return business.

Within these two categories are the same two options for the actual content: montage video or original video. Montage videos use stock footage and only last about thirty seconds. If you put the “Original Video” option in your shopping cart, then you’re paying for an on-site visit by a professional videographer. The footage from the on-site will be used to build a one minute video. Both packages come complete with professional music, voice overs, and editing.

Once the video has been produced, Pixelfish hooks it up with professional-grade promotions, aimed at network-wide visibility and local attention. Your personal accounts manager makes sure that your videos and business are listed on Citysquares, Facebook, and Twitter, and that your videos make the rounds on as many useful formats as possible.

July 22, 2011
By the ZippyCart Content Team

Etsy, the online marketplace where buyers can add handmade goods to their shopping cart, has replaced their CEO. Former CTO Chad Dickerson, who has been with the company for three years, takes over from one-time CEO and founder Rob Kalin. Kalin had returned as CEO in 2009, but stepped down recently amidst trouble at the company.

Etsy has been growing fairly steadily over the last few years. A recent report from a private equity firm estimated that Etsy’s revenue could grow from $72 million to $201 million by the year 2016. The company reported an impressive $314 million in revenue this year, falling a bit short of its predicted number of $400 million. With that being said, customers and storefront owners have expressed concerns regarding the amount of effort necessary to maintain an Etsy storefront. The report also cited 80 percent of Etsy storefront owners as “having concerns about their Etsy experience”. Those who are running storefronts also claimed they are wary of Etsy’s technical limitations. The company likely took this data into account when selecting its former Chief Technology Officer as the new director of the company.

Additionally, while Etsy is the forerunner of “handcrafed” retail, the niche market accounts for only 1 percent of total retail sales in the US. Competition is expanding, and there are thousands of independent retailers from which consumers can add handmade crafts, jewelery and clothing to their shopping carts. comScore, which measures websites total hits, showed Etsy hovering at around 7.4 million monthly unique visitors worldwide in May 2011, a statistic that has failed to budge going back to December 2010.

Etsy started back in 2005, when Kalin, a college dropout, decided to start a site where crafty men and women could sell their creations online. Sellers list their items for a fee of $.20 each, and pay a 3.5% fee for every item sold. The company initially struggled to be profitable, and until 2007 had not turned a profit. Kalin had previously stepped down as CEO, only to return sometime later. The company is also famous for having used Twitter early on to promote sales and get more items into user shopping carts.

July 22, 2011
By the ZippyCart Content Team

The face of publishing, printing, writing, and distributing the written word is changing. It’s been changing for years. The introduction of the internet was a massive disruption of the usual publishing system. For decades (centuries?) the gates of the publishing world were tightly locked and closely monitored. Independent presses popped up here and there, publishing fringe writers and artists and helping them get their message out and their books into shopping carts. Then the internet allowed any maniac with a Geocities account to post anything that they wanted to the internet and have other people read it. Next e-zines sprung up, paralleling the ‘zine movement of the 80s to today where low-to-the-ground publishers printed and distributed low-quality, stapled-together pages of content.

Now Amazon has added a layer of legitimacy by offering several different self-publishing avenues, including “Kindle Singles” and various self-serve options that have even led to the first ever million-selling independent writer on Amazon. John Locke managed to get over a million readers to put his mystery novel into their online shopping carts. Him and other writers like him have proven that there is life after the publishing machine is reduced to dust.

However, some types of publishing were/are much slower to change and evolve. Textbooks being one of them. Deeply mired in an academic and commercial relationship that can only be described as incest, publishers relied heavily on colleges mandating purchase of their newest books, deals with professors, and lunches with industry reps, paid for by the companies. Only recently have we seen textbooks even making the transition to ebook format. If we as a country can ever get this debt thing under control, get more disposable into the middle and lower classes (doubtful) and get every school kid and college student a tablet, we might truly see a shift towards more comprehensive e-textbook adoption.

Amazon is helping push e-textbooks forward a little at a time. Starting this fall they say, tens of thousands of textbooks will be available to rent via their Kindle devices and apps. With the recent price reductions and special offers on Kindles, it’s easier than ever for anyone to put on in their shopping cart.

The textbook rentals could (eventually) offer significant savings over purchasing textbooks, even given the return (however small) that students usually get from selling their books back at the end of the semester. The major drawback in Amazon’s current rental system is that it’s month-to-month and doesn’t offer super-huge savings now (an intermediate accounting book costing $109.20 to buy, can be rented starting at $38.29 – how long is that?). As the program expands, expect to see greater cost savings and “semester” plans.

Meanwhile, on the subject of another dying medium, newspapers might be getting some help from the Kindle as well. As more and more people drop their regular print newspaper subscriptions and stop putting them in their shopping carts at brick and mortar stores (or stopping by their local newsstand or gas station), news readers have turned to other sources for their daily info fix.

One source is the Kindle’s New York Time’s subscription service, which currently boasts 57,000 subscribers. Now that the Times has erected a pay wall, many subcribers with Kindles may be thinking: “well, I’m going to pay for this content one way or another, I might as well get all my money’s worth.”

Either way, more subscribers (in any form) means more revenue that newspapers can count on. Subscribers were and still are the main determiner a newspaper uses to decide how solvent they will be for the future. If numbers continue to grow we could see a new era of prosperity for the Old Grey Lady (and all those other newspapers whose nicknames I don’t know!).

July 21, 2011
By the ZippyCart Content Team

The world of mobile payments just got more interesting. Mobile ecommerce solution ISIS signed deals with three of the largest credit card companies Visa, American Express, and MasterCard. With Discover already backing the venture, ISIS is now the only mobile payment solution that supports all four major credit card companies. ISIS hopes that the new deal will help expand interest in NFC (Near Field Communication) mobile payment technology and help move consumers towards a more mobile shopping experience by the time it publicly launches in 2012.

ISIS is a joint venture between mobile service providers ATT, Verizon and T-Mobile. Its main competitor is Google Wallet, which offers a platform for mobile payment through service provider Sprint. MasterCard will continue to offer support through both ISIS and Google Wallet. Sprint is currently the only phone provider that offers a smartphone containing NFC technology, the Nexus S 4G. NFC technology allows consumers to use their mobile devices as forms of payment. By swiping the phone over an NFC scanner, the purchase is charged to their debit or credit card automatically, streamlining the purchasing process and potentially cutting back on credit card theft.

NFC technology is expected to become a major source of revenue for both credit card companies and the intermediaries that facilitate transactions. Getting credit card companies on board is a solid step in the right direction for ISIS and other mobile payment ecommerce solutions, but many obstacles lie in the way of progress towards card-less transactions. Replacing or supplementing old credit card machines with NFC scanners is expensive for retailers. Also, introducing NFC technology into phones and convincing consumers that it’s a worthwhile transition will be difficult.

Credit card companies have also recognized the increasing market for mobile payments, deal offers, online shopping and the general focus on the virtualization and streamlining of purchases. American Express recently teamed up with Facebook to bring deals to Facebook users, based on what they and their friends “like” on Facebook. In order to facilitate the switch to card-less payments and NFC transactions, analysts predict that credit card companies will need to offer incentives and promotions that will ease the transition.

July 22, 2011
By the ZippyCart Content Team

Gartner recently released a report regarding worldwide mobile payments, showing that by the end of 2011 there will be 141 million mobile payment users around the globe. This is a 38 percent increase from 2010. Last year, mobile payment users reached 102.1 million. Worldwide mobile payment volume is forecast to total $86.1 billion, up 76 percent from 2010′s volume of $48.9 billion. Credit card companies are making moves towards more mobile-based ecommerce solutions, as evidenced by recent deals inked with mobile payment providers such as ISIS. Despite this news, Gartner says the mobile payment market is growing slower than expected.

“Many service providers are yet to adapt their strategies to local requirements, and success models from Kenya and the Philippines are unlikely to be translated to other markets” says Sandy Shen, director of research at Gartner. Emerging markets are an excellent target for mobile payments, as brick-and-mortar banking institutions are rare and the number of mobile devices is on the rise.

The report also cites the widespread adoption of NFC (Near Field Communication) Technology as being at least four years away. NFC-based ecommerce solutions allow smartphone users to slide their cell phones over a scanner to pay for purchases. As of right now, only one smartphone (the Nexus S 4G) supports NFC purchases in the United States. The largest hurdle on the way to NFC adoption is convincing consumers that the technology is a worthwhile transition from paying with cash or cards. The high cost of NFC replacing or incorporating NFC scanners will also make the transition more difficult for retailers, especially small businesses who are already struggling in weak economies around the world.

The success of ecommerce solutions such as mobile app stores play a large role in the recent growth. “Thanks to the success of mobile application stores, such as Apple’s App Store, and the efforts in driving mobile sales by major retailers, such as Amazon and eBay, merchandise purchases far outweigh other use cases in developed markets, which include North America and Western Europe,” Ms. Shen said. “We predict that in 2011, merchandise purchases will account for 90 percent and 77 percent of all transactions in North America and Western Europe, respectively.”

July 21, 2011
By the ZippyCart Content Team

Tagging can be an important practice when running and ecommerce solution. Its primary purpose is to determine the outcome of various online marketing campaigns: which conversions are coming from which elements of their marketing efforts. However, tagging has always been a double-edged sword. While ecommerce solutions and other online businesses valued the information that tagging could bring them, they were always wary of the page-load-slowing effect that it could have on their websites.

Travelocity has recently deployed the third generation of Tagman tagging technology on their ecommerce solution. Tagman’s most recent product roll out is designed with a number of features that are supposed to deliver superior information-gathering capabilities without slowing page load time.

William Beckler, Marketing Analytics Manager for Travelocity had this to say:

“We chose TagMan as our global tag management provider because site performance and flexibility really matter to us. The tag acceleration promise is certainly compelling and we look forwarded to seeing how we can leverage these new techniques, along with the other new TagMan 3 features, across our global properties.”

Most companies deploy five to seven tags per page. Each tag can take up to a quarter second to load. This can add up to an additional second and a half to a page load time, which (you may or may not believe this) can reduce conversions by up to ten percent! That may seem like a huge number for such a small amount of time, but a recent survey by Aberdeen Group says that even a one second page load delay can result in a ton of lost revenue.

Forester Research backs up that research. According to them, a delay of more than three seconds causes consumers to abandon websites. You can blame a lot of things for this shopping behavior: shortened attention spans from our rapid-fire world, the spread of high-speed internet, etc. But the bottom line is that ecommerce solutions and websites of all kinds need to adapt to it and find ways to get the information that they need and keep doing business and getting conversions.

July 20, 2011
By the ZippyCart Content Team

Zillow’s IPO is today, and just like every tech IPO these days, the stock soared. For those who don’t know, Zillow is your house-pricing, mortgage-finding, almost-an-ecommerce solution site that wants to help you buy your next house. Originally valued at $1.6 billion, the company opened its shares at $20 each on Tuesday night for a limited number of investors. If you were able to get a hold of your broker you might have been one of the lucky ones to your investment open at $57 per share this morning.

The problem occurred when those investors saw their money triple and decided to sell off (I mean, who wouldn’t?). The stock took a dip to around $33, but is now still floating at almost $40 a share. This kind of quick timing with these tech IPOs has made some investors a lot of money. The dangers of chasing that hot tech IPO occur routinely because of ridiculously sharp drops (usually around mid-day) that are the result of “shorting.” Sales from people who got in first and are offloading their stock after their money is made exacerbate these problems.

Zillow makes money through online advertising, not from external companies, but through the users on the site – specifically real estate agents. The user can see just about any aspect of a house on the website. Plus, if the real estate company decides to go through the ecommerce solution to “sponsor” their house, you might see it first. The site makes finding the right mortgage easy, and seeing the specs and valuation of a specific house.

Zillow was the first of its kind when it launched in 2005. You could check to see how much your neighbor’s was worth (and Arnold Schwarzenager’s too!). The company is one of the smaller tech companies that has filed for an IPO. This could open the doors for smaller gaming companies like 6waves Lolapps to go public like Zynga has decided to do. The videogame companies like these that feature many product with in-game ecommerce solutions have been seeing huge growth, and more funding could be necessary.

The Zillow IPO comes in the midst of some of the hottest tech IPOs we’ve ever seen. Linkedin started trading under the symbol LNKD a littler over a month ago.  The social network for career searching is currently trading at around $100 per share.  That puts the company at over a $9 billion valuation.  The company opened at $42 with a close to $4.5 billion valuation, yet it only had $15.4 million in revenue last year (don’t get that needle too close to the bubble!). Caution and research are key when deciding to throw these hot IPO shares into your shopping cart.

July 20, 2011
By the ZippyCart Content Team

There’s a crisis gripping this country: daily deals fatigue. It’s affecting more and more people every day. Tons of daily deals pour in from every direction. They target shoppers from a variety of angles: location, age, lifestyle, artistic sensibility, you name it.

Many daily deals subscribers feel at once trapped by daily deals programs that ceaselessly send them offers, and also powerless. As more and more daily deals programs crowd the space, the quantity of deals goes up while the quality of the deals goes down. Users are left feeling like they can’t make a move without consulting their various deal apps and ecommerce solutions, but then they feel like they can’t do anything anyway because all the deals that they find are sub-par.

However, American Express may have a program that puts an end to all that, or at least presents a more manageable, palatable option to busy deal hunters. The program is called “Link, Like, Love” and it works like this: First you download the app, then you link your American Express card account to your profile. Now you’re ready to go. The ecommerce solution system feeds you a steady stream of special offers from partners like Dunkin Donuts and Whole Foods (among a whole slew of others). This stream is influenced by the types of businesses (and other things) that you and your friends “like.”

The best part of this new daily deals ecommerce solution is that you don’t need to “buy” a deal to take advantage of it. You don’t even need to tell the retailer or show them a coupon or anything. Just pay for the deal using the American Express card linked to the app and you’ll automatically get the credit indicated. This is a landmark in the daily deals world because it will allow Amex and their partners to keep track of exactly how many deals are being redeemed. Unlike Groupon and most other daily deals ecommerce solutions, there’s no lost middle ground of people who buy the deal and never redeem it.

While connected with Facebook, it’s not a replacement for Facebook Deals, which the massive social network sources themselves. While most of the earliest Amex deals are with national brands, they have a self-serve option for small businesses called “Go Social.” The subsystem will allow local business owners connected to Amex through their existing merchant network to design and implement their own special offers. With this combination of flexibility, control, and social networking muscle, American Express could be positioned to give Groupon a challenge.

July 20, 2011
By the ZippyCart Content Team

Eric Schmidt: "I'm not too worried about this."

Yesterday we covered how HTC had suffered an initial loss in a US International Trade Commission ruling that stated that they were in violation of two patents held by Apple. The news was far from good for the Android phone developer, but they could be considered to have gotten off easy considering that Apple was slapping them with ten total patent violations. The dust is settling on the case, which almost definitely won’t spell the end of HTC’s lucrative phone business. In fact, many analysts think that Apple will try to turn this win to their advantage by forcing HTC to pay them a fee for every phone that goes into a shopping cart.

However, regardless of the track that Apple wants to take with HTC, the plucky phone company won’t have to go it alone. Google CEO Eric Schmidt waded into the fray, saying that Google would support HTC and then added this shot directly at Apple:

“We have seen an explosion of Android devices entering the market and, because of our successes, competitors are responding with lawsuits as they cannot respond through innovations. I’m not too worried about this.”

That’s quite a stab at Apple, a company that prides itself on being cutting edge. Their products have long been status symbols for the technologically elite. People put Apple products into their shopping carts for a reason, and even with the rise of Android products (cell phones, tablets, wristwatches, whatever else they invent that needs an OS…), there will always be a niche for Apple brand goods and a market share that will be willing to pay for them.

On the other hand, it’s perfectly understandable for Apple to feel a little threatened by Android. With half a million Android phones going into shopping carts and coming online every day, the smartphone market is simultaneously growing and shrinking. There are more smartphone users every day, opening up opportunities for apps, social networks, and mobile and/or social games on these platforms. On the other hand, familiarity breeds loyalty, and when users find a brand or OS that they can really get a handle on, they tend to stick with it (at least for a few years).

With Android spreading out over multiple platforms, including tablets and portable computers, Apple is blocking them in other legal battles as well, having recently alleged patent infringement in Samsung’s development of their Galaxy Tab 10.1, another Android product. How all these legal case will affect Android’s success is yet to be seen.

July 20, 2011
By the ZippyCart Content Team

The music licensing agent Audiosocket has been around for about three years now. If you have just bought a Spotify account, don’t panic – this isn’t for you. Audiosocket has just released a new service that they like to call “music as a service” (MaaS). This was designed to help developers of all kinds get legally licensed music easily. The user integrates it into their project via an API (Application Program Interface) and then chooses the songs they want to license accordingly. Once the music is chosen the web designer, game developer, or whatever, pays through Audiosocket’s ecommerce solution.

With so much news coming out that Spotify is finally coming to the US you might be wondering: why don’t I just use Rdio or Spotify? Audiosocket is nothing like the two. Spotify and Rdio have a humongous library of songs – well over the 33,000 that Audiosocket has.

Think of Audiosocket as a music ecommerce solution for movie makers. When you’re making a movie a lot of producers have to get copyrighted music for a fee from the record label. This equates to a lot of emails, reading, and paperwork and of course – money!  With Audiosocket, anyone who needs to license music so that they can use it commercially can do it easily through their ecommerce solution. This cuts out the nasty paperwork and negotiation times so you can get back to your project.

Still don’t understand it?  Just know that if you’re looking for music that you can personally listen to, Audiosocket is not for you. Rdio or Sportify is exactly what you want.

Another cool thing that Audiosocket makes even easier is getting money to the creators of the music, the artists. Music producers of all kinds can have their music featured on the Audiosocket API and be paid for their work every time someone uses their songs. Getting money for streaming and digital record sales has been increasingly harder for artists. Now there is a new revenue opportunity for them.

If you’re looking to develop a movie, game, or website that integrates music that is required to be licensed, it’s looking to be easier than ever. Finally, there is no more going through contract after contract trying to get a license to use a song. Don’t worry if you’re just a normal person who likes to listen to music, because Spotify and Rdio are there for you.

July 19, 2011
By the ZippyCart Content Team

Dell CEO Michael Dell is looking to use Google+ style meet-ups to address customer service needs for the company. Ever since joining the new social networking service offered by Google, Dell has utilized the group video chat, deemed a “meet-up,” to connect with users. He recently posed this question on Google+: “I am thinking about hangouts for business. Would you like to be able to connect with your Dell service and sale teams via video directly from Dell.com?”

This new idea seems to be a viable ecommerce solution for the company. The question received an overwhelming positive response from Dell’s group of connections on Google+. The idea of group video chat to solve customer service problems addresses a few key issues for Dell, who has fallen behind competitors as of late. Video chat would allow users to connect face-to-face with a person and would add a humanized feel to an increasingly automated and outsourced customer service experience.

Additionally, many customer service calls are concerning the same issue. Therefore, having a service representative talk to a small group of customers at the same time could make more economic sense for tech companies. Customers could also share screenshots or share their computer’s screen remotely with the customer service rep or demonstrate the problem. This ecommerce solution could potentially cut the cost of return shipping for repairs and other pricey issues.

Dell’s idea would also help increase the company’s public image, which has taken a hit as companies like Apple and HP continue to eat up market share. By introducing somewhat personalized and humanized customer service, Dell may look more technically advanced and user friendly than its competitors. The ecommerce solution to a complicated issue could easily translate into higher sales for the company.

The idea of launching a Google+ hangout directly from the Dell homepage is still far off. Google+ is currently invite-only and has not been opened up to businesses. There’s still no word as to when the social networking tool will be open to business interests, though the company is rumored to be looking into how such a setup would look.

July 19, 2011
By the ZippyCart Content Team

The evolution of the flash sales within ecommerce solutions has brought a new and welcome change where it’s all about targeting the local businesses and cultivating working relationships with merchants. Early this Monday, luxury flash sales site, Gilt Groupe launched their local lifestyle brand Gilt City into four more cities including Atlanta, Dallas, Washington DC and Seattle. The new expansion brings Gilt City into a total of 10 cities joining the major metropolitan areas New York, Boston, Miami, Chicago, Los Angeles, San Francisco, and Tokyo.

Ecommerce: the Gilt City that never sleeps

Gilt City offers massive discounts for locals to buy up relaxing packages at hard to get into spas, custom tastings at up and coming restaurants, and exclusive movie screenings before they are released to the public. The company targets an upscale demographic (80 percent of its users generate an income of $75K or more) and carefully curates experiences that are unique to each city’s individuality to ensure that the offers featured on its ecommerce solution are exclusive to the Gilt brand identity of luxury goods and services.

The focus on local gives merchants a fighting chance among the daily deal wave that has come over the market, with some daily deal models spitting out as many generic deals as they can just to stay competitive which, as a result, reduces a business into mere a number in the sea of discounted offerings.

Although the daily deal model is in nature, far different from Gilt’s flash sales model, the number of sites out there toting a ‘discount’ are still able to compete. What Gilt seems to have leveraged to their advantage is being an exclusive brand and is selective in who they partner with. It is refreshing that they’re not out to generate a massive number of deals.

The loyal consumer following the Gilt empire of Gilt Men, JetSetter, Gilt Taste and their other verticals have built has afforded the company an easier way for Gilt City to launch and capitalize in the local markets. As such, Gilt City (which launched in 2010) has become one of Gilt Groupes’ fastest growing verticals, boasting over 1.8 million members worldwide.

Gilt Groupe has become a brand that moves softly while carrying a big stick discount in the luxury market. This is an ecommerce company to watch in the next couple of years with rumors of an IPO swirling for 2012, solid partnerships with high profile brands, and more verticals in development, there’s a reason why this four-year old company is valued at $1 billion.