It recently came to my attention that Gilt is starting to offer full price items alongside their sale items. This strikes me as the beginning of the end for Gilt, who built their brand on offering high quality items at amazing prices. That is their brand promise. Breaking your brand promise will quickly alienate your user base – think Facebook privacy debacles, Google promoting their own stuff in search results.
To illustrate, here’s an example of something that is full price:
Now, here’s something that is on sale:
The only difference in presentation is the crossed out price. For users who expect everything on the site to be a good deal, if they’re not aware of this, they are being “tricked” into buying stuff for full price. Probably they are celebrating their success over at Gilt right now since this stuff surely comes with high margins. However, now their users have to think when they look at the site, and perhaps comparison shop to find out of they’re getting a good deal or not. This dramatically erodes their competitive advantage and probably even has negative effects on employee morale.