Flash sales giant Gilt Groupe is announcing major expansion plans to today, with the company’s e-commerce offering extending to over 90 countries. Additionally, Gilt will offer international customers free shipping for a limited time.

Gilt’s international sites will offer daily flash sales on women’s men’s and kids clothes and accessories, as well as home decor items through its Home vertical. Each sale contains a limited amount of inventory and lasts roughly 36 hours. Gilt says that nearly 50 percent of merchandise is sold during the first hour of a sale. The company’s recently launched luxury retail site for men, Park & Bond, will be made available to international customers next month.

Also starting next month, Gilt members outside of the U.S. will be able to shop and purchase from from their mobile devices through Gilt’s mobile website and iPad, iPhone and Android applications. Gilt says it is working with FiftyOne, an e-commerce platform that helps power international expansion and operations for online retailer, to enable international transactions, currency conversion, and international delivery.

International expansion is a big move for Gilt, so it should be interesting to see how the availability in over 90 countries around the world effects the company’s revenue. Gilt closed a $138 million round at about a $1 billion valuation last May and is on track to do $500 million in revenues this year. And an IPO may be in the company’s near future.

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Flash sales giant Gilt Groupe has been steadily expanding its flash sales platform into a full-fledged e-commerce and curated content platform that reaches all major retail verticals including fashion, food, men’s clothing, and now the home. Today, Gilt is launching a brand new destination for home accessories and furniture, called Gilt Home.

While Gilt has been offering home goods via its flash sales site, this new platform includes a completely revamped site that adds editorial content and boutiques curated by renowned interior designers. In addition, the site offers four ways to shop: daily flash sales, “shoppable” editorial features, curated collections by top designers, and luxury collections.

Interestingly, Gilt Home will offer both flash sales, which cover designer goods at steep discounts over a limited time, as well as traditional full-priced merchandise that can be purchased at any time. The new site will include over 400 brands across multiple categories and from many designers including Missoni, Anichini, Frette, Matouk, and Michael Aram.

And brands previously only available to the designer trade will now be offered directly to consumers including William Earle, Stark, Kyle Bunting, Ted Boerner, Rotsen, Espacio and A. Rudin, with additional brands being added over the coming months. The launch includes over 2,000 products in the core assortment and new items will be added daily. New flash sales will continue to launch every day at noon.

One of the key elements of Gilt Home is access to designer curated content and pieces. Earlier this year, Gilt actually acquired Decorati, online platform for both interior decorators and consumers who are looking for professional design advice and guidance. Decorati’s founder, interior designer Shane Reilly,, is now a lead designer for Gilt Home. The new platform is also led by General Manager Jason Goldberger, Editorial Director Tom Delavan (formerly editor-at-large of domino magazine), and Divisional Merchandising Manager Alexander Ogof.

The designer boutiques incorporate a curated assortment of products, original lifestyle content and a “shop the room” experience. The product selection will include items from the designers’ own personal inventory and existing Gilt products, with a focus on items exclusive to Gilt.

Similar to Gilt Taste, the flash sales giant is also trying to bridge the gap between e-commerce and editorial with the launch of Home. Editorial content will revolve around how-to’s, trend reports, advice-related columns and in-depth features on designers.

The success of One Kings Lane has shown that a flash sales site for home décor, furnishings and accessories with a niche model can bring in revenue and a major valuation. The Kleiner Perkins-backed site also offers editorial content, and designer curated sales. And Fab.com, a flash sales site for design items, is also growing fast.

Clearly, there is definitely room for a few competitors in this space. And Gilt has shown that the blend of editorial, curated e-commerce and flash sales can work for certain verticals, exemplified by the company’s travel vertical Jetsetter.

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Luxury group buying service Gilt Groupe is joining the mega-round bandwagon today with a new $138 million funding, led by Softbank, which took nearly half the round. Goldman Sachs, New Enterprise Associates, Draper Fisher Jurvetson Growth, Pinnacle Ventures, TriplePoint Capital and Eastward Capital also participated, as did existing investors General Atlantic and Matrix Partners.

Gilt Groupe operates a growing family of flash-sales sites, including the original Gilt, Gilt Home, Gilt City, Gilt Children, Gilt MAN, and Jetsetter. Members are offered discounted prices for a limited time, which drives demand. Gilt was one of the earliest flash sale sites, and now there are dozens of copycats. (HauteLook, a smaller flash sale site, was acquired by Nordstrom for $270 million last February).

Social commerce, in general, is attracting a lot of capital. Groupon raised $1 billion earlier this year and is on its way to an IPO. LivingSocial raised $400 million at a $2.9 billion valuation. Those two focus more on local commerce and require a certain number of consumers to commit to a deal before it goes into effect, whereas Gilt acts more like a merchandiser picking the products it thinks its members will want to buy.

Gilt is smaller in revenues than Groupon—on track to be more in the $500 million range than the $2 billion+ range that Groupon is in—but is growing rapidly. A big round like this is usually a precursor to an IPO, which is the next logical step.

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The group buying industry has sprung out of nowhere over the past two years. A new report (embedded below) by daily deal aggregator Local Offer Network puts the U.S. gross revenues across the industry at $1.1 billion last year, and estimates gross revenues will grow 138 percent to $2.7 billion in 2011.

Groupon alone, according to other sources, is expected to bring in between $3 billion and $4 billion this year, up from $760 million last year, but those numbers are worldwide. If you figure at least half of Groupon’s revenues come from the U.S., you can get a sense of how much it dominates the market—capturing anywhere from about 50 to 75 percent of expected industry revenues this year.

But that still leaves as much as half left over for other group buying sites, such as LivingSocial and Gilt Groupe. And those are just the big dogs. Local Offer Network tracked 90,000 deals across 322 group-buying sites in the U.S. since January, 2010. And that doesn’t even include so-called private sale sites.

In the first quarter of 2011, it tracked 117 new deal sites, which is about double the number of entrants a year ago. The churn rate for these sites is about 25 percent, meaning that is how many fail, are bought, or go dormant.

The number of deals being offered is also accelerating. Last year, there were about 63,000 deals in the U.S. through group buying sites. In the first quarter of 2011, there will be an estimated 40,000. Groupon accounts for less than half of those published deals.

The categories that dominate are Food and Drink (27%), Beauty, Spa & Massage (19%), Fitness & nutrition (7%), Sports & Recreation (7%), and Home Products & Services (5%). The biggest cities for daily deals are Chicago (where Groupon is based), New York City, San Francisco, Boston, and LA.

Local Offer Network gets all of this data in a variety of ways, including business relationships with about half of the group buying sites, data feeds, APIs and web crawlers.

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In one of the larger exits so far in the flash sales business, retail chain Nordstrom has acquired flash sales site HauteLookfor $180 million in Nordstrom stock and three-year earn-out of up to $90 million. HauteLook has raised $41 million in funding.

Thanks to the immense popularity of members-only, online sample sales, HauteLook has grown to 4 million members since launching in 2007. The site offers massively discounted sale events in women’s fashion, men’s fashion, accessories, kids’ clothing and toys, travel and home and beauty.

The basic idea behind the flash sales model is this: designers ad retailers, such as Marc Jacobs or Versace, place excess inventory on a sale site at 50 to 70 percent discounts over a several day period. The sales are private, available only to members, with upcoming sales from brands announced via emails. You can get invites from other members or request invites via the site.

The flash sales space is definitely competitive; and the amount that HauteLook sold for isn’t entirely surprising. Two years ago GSI Commerce bought RueLaLa in a deal valued at $350 million. Gilt Groupe, has been raising huge amounts of money, growing its user base at a rapid pace and turning a strong profit. In December, Gilt raised another $15 million, bringing the company’s total funding to nearly $100 million. At one point Gilt was valued at $400 million but that number has surely increased over the past year. And an IPO could be in the near future.

One Kings Lane, has also recently raised a large amount of money and is growing like a weed. And there are a number of independent players like Ideeli, BeyondTheRack and others who are still growing at a fast clip.

The concept has even attracted retail giants like eBay, Saks and Neiman Marcus, which are now jumping on the bandwagon to offer their own private sales, a market which Nordstrom clearly wants to enter the space. I wouldn’t be surprised if other larger retailers snap up niche, smaller flash sales sites over the next few years.

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Gilt Groupe has made a name for itself, particularly in the United States, for operating a successful flash sales site that offers its members products and experiences at heavily discounted prices for a limited period of time.

Now, the company is turning to traditional e-commerce for its next trick.

Gilt this morning announced that it will be debuting a full-price men’s business as a dedicated website in Summer 2011 (to coincide with Pre-Fall 2011 collections).

The company says the new site, the name of which hasn’t been disclosed yet, will offer a selection of men’s apparel, accessories, athletic gear, gadgets, and more. Aside from a “state-of-the-art shopping experience”, the site promises to throw editorial content into the mix.

John Auerbach, currently General Manager of Gilt Groupe’s $100 million+ Gilt MAN business, will be President of the new site. Brooke Cundiff, formerly Director of Men’s Brand management at Gilt rival Rue La La and Associate Divisional Merchandise Manager of Saks Fifth Avenue, will become Divisional Merchandising Manager of the new business.

Brian Kalma, formerly head of user experience at Gilt and prior to that head of user experience and web strategy at Zappos, will be in charge of user experience for the new site.

Gilt Groupe says the mixture of brands on the full-price site will be similar to the curated assortment currently available on Gilt MAN, and items will live on the site according to seasonality in contrast to its current flash sales model.

Kevin Ryan, founder and CEO of Gilt Groupe in a statement says the company has already signed up 400,000 male customers and 350 brand partners to date.

Online fashion retail stores seem to be having quite an upswing of late, with Google launching Boutiques.com and eBay running a one-stop-shop for all things fashion.

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I’m a big fan of members only flash sales sites; which take a Gilt-like model to sell high-end clothing, hotel rooms, home goods and more at 50 to 70 percent off retail prices. So when decided to try out Exclusively.In, a members-only shopping site for fashion, jewelry and home decor from Indian artisans and designers I was intrigued to see if a niche-site could draw a fair amount of traffic from a broader audience. It looks like Accel seems to think so—Exclusively.In has just raised $2.8 million from both Accel Partners and Helion Venture Partners.

The site features high-end traditional Indian apparel as well as more modern, Indian-inspired clothing. And the startup includes scarves, jewelry, handbags, crafts, paintings, photography and other home goods made by Indian designers.

Since Exclusively.In’s launch June, the company’s co-founder and CEO Sunjay Guleria says the site has experienced strong demand from a broad base of consumers, not just the Indian diaspora, as “Indian-infused” fashion and decorations go mainstream.

While Guleria declined to name how many members the site has, he did say that over 65 percent of its members make repeat purchases with the average purchase hovering around $250 ion the site. Currently Exclusively.In ships orders directly from India to the U.S., but will eventually expand to Canada, the U.K. and India in early 2011. The site is also looking to expand to other verticals, such as travel. Over the past few months, Exclusively.in has featured deals from the Taj Hotel Group for the company’s hotels all over the world.

It’s certainly interesting to see that niche flash sales sites like Exclusively.In are growing and finding a loyal userbase, and a vote of confidence from well-known investors. Gilt’s revenue was expected to reach close to $500 million this year, so even as a niche site, Exclusively.In could pull in decent sales. Or it could be a possible acquisition target.

One thing is for sure. My wallet is a little lighter after my visit to the site.

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Beyond the Rack, a members-only sample sale site, has raised another round of funding today. The startup has just announced a $12 million round of funding from Highland Capital Partners and BDC Venture Capital. This brings the Beyond The Rack’s total funding to $16.5 million.

Similar to Gilt Groupe, HauteLook and Ideeli, Beyond the Rack is a members-only shopping site that offers steeply discounted (from 50 to 70 percent) on designer brand clothes, accessories and other goods. The site says that its revenue growing over 30 percent per month and currently has 1.5 million members, doubling its userbase from six months ago.

Beyond The Rack launches up to eight new sales events every day, with each event only lasting a few days. The model has done fairly well in the space, with similar sites seeing rapid growth. There’s the rumored acquisition of European sample sale site Vente-Privee by Amazon for an estimated $3.01 billion. And sample sale sites Gilt and Ideeli have recently raised large amounts of funding. While the flash sales space is full of worthy competitors, clearly there is room for a number of sites to operate.

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Editor’s note: Should media sites become group buying sites as well? Guest author Dave Chase thinks so.  He was a marketing executive and general manager at Microsoft in the 90’s including starting Microsoft’s healthcare business. After leaving Microsoft, he has been involved in Internet startups including a social commerce company in the health sector that is in stealth.

If there’s one thing we’ve learned from the Internet it is that if a middleman doesn’t add enough value, their days are numbered.

Media companies may not have thought of themselves as middlemen—but that’s what they have been for marketers. When I used to buy advertising a decade or so ago, I felt it was my job to do what I could to get the media provider out of the middle between my company and the customers we desired. For example, we did a lot to drive a direct relationship including encouraging them to register with us so we could communicate with them directly later—first through e-mail, now it would be via a Facebook page or Twitter.

Back then, there was more than enough ad revenue for the media company to sustain their business—so much profit, in fact, that some companies got complacent. Just as railroad companies should have realized they were in the transportation business rather than the railroad business (and thus they missed the opportunity to get into the auto or air transportation business), media companies should recognize their business purpose is to connect their audience with products and services the audience desires. Without that business purpose, they can’t fulfill their editorial mission.

The traditional mission of a media business is to collect a loyal audience with high quality information, and let the advertisers worry about how to sell stuff. The media companies sold the audience.

Retailers historically aggregated consumers for product makers—for example, giving Proctor & Gamble a way to sell to people in Poughkeepsie . But most didn’t add a lot of value beyond offering consumers product selection and price. Retailers such as Best Buy have realized that and have started to add other value to the experience (e.g., the Geek Squad). Meanwhile, one of the retailers’ biggest costs has been advertising—circulars, broadcast advertising or something else.

Today, media companies on the Web aggregate consumers around specific interests and product niches (technology, cooking, travel, music, movies, sports, finance) much more efficiently. I believe today’s media companies will need to get directly involved in commerce to ensure a sustainable business model. The Times (UK) and Burda (Germany) are both reported to be realizing a substantial portion of their profits from direct commerce enabled from their websites selling 3rd party travel packages and other goods and services. Local media companies such as the Washington Post are either partnering with group-buying sites such as LivingSocial or rolling out their private label competition to Groupon and LivingSocial.

Some traditionalists may shudder at this blurring of church and state lines. However, the trusted relationships media companies and retailers historically aspired to have is more important than ever in this age of transparency. A company that shills for inferior products will be outed immediately. Conversely, a company that provides entertaining, inspiring and informative content and allows consumers to more easily find and complete a transaction for the best products and services is providing a great service to their readers.

The byproduct for traditional media businesses unwilling to make these moves is self-evident. It’s not hard to see this in action as you pick up your ever-shrinking newspaper that isn’t covering the topics it once did. In other words, their editorial mission is suffering due to sticking to their traditional ways.

Once again, traditional media run the risk of being slow to adapt. In some regards, smart media companies need to think more like retailers. That is, get directly involved in the transaction that they are only indirectly touching today. Rather than let the next eBay or craigslist form independently, they should get actively engaged in some of these new models:

1. Private Sale business: Companies such as Gilt Groupe and Ruelala are experiencing phenomenal growth. These insider-ish member based businesses borrow from outlet-mall sample sales to create great value for the consumer. In a nutshell, they have a member list to which they send “flash sales.” Those sales are typically 72 hour in length, and the consumer gets access to curated merchandise at 50-75% off of retail. Yet another example is private sale pioneer, France-based Ventee-privee, which is approaching $1B in annual sales and like the others is highly profitable.
2. Group Buys: Groupon and LivingSocial are seeing tremendous growth tapping people’s social networks to present consumers with great deals that still make sense for merchants. Group-buying sites have also gained investor interest because of their compelling economics as you can see for Groupon and LivingSocial.

While these trends can span both local and national media properties, I believe that the private sale business is a great fit for a national publication. National publications tend to be focused on a particular topic area whether they are gadget blogs, design site, or parenting magazine. Here are a few examples:

• Wouldn’t Zulily (a private sale site geared toward young children’s clothing) bolted on to Parents Magazine grow far more quickly and still be a good fit with Parents Magazine’s audience mission?
• Vogue has partnered with Gilt Groupe to “shop the issue” at http://vogue.gilt.com/.
• Daily Candy has launched their own Sample Sale.

Meanwhile, local media is a natural fit for group buys—the group-buying phenomenon is largely local. Already we have seen Groupon work with Metromix and LivingSocial partnering with the Washington Post. Group-buying programs can grow much faster by piggybacking the daily or regular habit most consumers already have with various local news properties.

National media will have to be more careful not to cross journalistic lines. It will be relatively easier for local media as most of the group-buying categories don’t directly relate to their editorial focus with the exception of special sections such as travel. The value of the local media isn’t terribly different than the traditional model – i.e., aggregating a large, local audience. However, they are taking the additional step of closing the transaction.

Those of us who have sold media understand how successful private sale and group-buying programs can avoid the common scenario of trying to explain to an advertiser that the media property achieved the agreed upon objective (i.e., exposing consumers to the merchant’s offerings) but it may have been the merchant who didn’t do their end of the bargain very effectively. These social commerce programs can avoid a common problem with ads – the lack of measurability, and the inevitable disagreements between the merchant and the publisher over the effectiveness of the ads.

Some believe this model of commerce will die out as the economy recovers. I disagree. Product purveyors have always had extra inventory they need to unload. Further, the private sale approach allows them to do it in a way that they don’t perceive damages their brand even if they have premium positioning.

Likewise, in the local arena where popular group-buying categories such as restaurants and service providers (spas, dentists, etc.) are having great success, those organizations previously employed the “spray and pray” method of advertising with little idea whether it was working or not. With group-buying, they not only get a directly measurable transaction closed, they get what amounts to free advertising even for people who don’t purchase, since the group-buying sites amount to a quasi city guide. Groupon states in their marketing that 9 out of 10 businesses who have used them state that Groupon customers are among their “new regulars”. That puts this model in the no-brainer category for many local media.

Photo credit: Flickr/ Tilo Driessen

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