"Flash Sales," time-limited sales that usually last from a day to 72 hours, are proving to be one of the newest, most effective strategies for online sellers to move merchandise. The practice – now a booming $2 billion business – recently helped ecommerce retailers grow holiday business twice as fast as online merchants who didn’t offer similar “deal of the day” promotions, according to Reuters.
"For retailers, flash sales can be an extremely effective tool in capturing consumers’ attention, getting them to their site and enticing them to buy not only flash items, but also full-price merchandise," said Maria Haggerty, president of fulfillment service Dotcom Distribution, which helped a variety of online retailers deliver on their holiday orders.
"Flash sales work," affirms Forbes Magazine blogger J.J. Colao in a post about how the large ecommerce company Wayfair recently launched the site "Daily Fair" to capitalize on the phenomenon, and companies like Gilt Groupe, Rue La La and One Kings Lane all use the impulse-shopping based strategy.
But retailers ned to be fully prepared to run the sale in terms of logistics before they jump on this trend, according to Haggerty. Before running a flash sale, Dotcom Distribution says e-retailers should plan ahead by considering several questions, including:
1. Do you have the inventory depth to run the sale?
More than 45 percent of flash sale offers sell out faster than anticipated. This means retailers are driving a customer to their site only for him or her to find that the sale item is out-of-stock. A retailer’s logistics provider or department should have the ability to see and track inventory in real-time.
2. Did you select the right products to sell?
Roughly 57 percent of flash sale buyers are women. Do you know who is frequenting your site for these deals? Tapping into similar insights can help retailers select the right product mix for their flash sale demographic.
3. Have you previewed the sale items?
Flash means fast – customers must make quick decisions, especially during the last minutes of a daily deal. Previewing flash sale items first allows customers to get their feet wet before buying the product. Preview it first – they’ll come back.
4. Are you ready to ship the items?
One of the top complaints from flash sale buyers is that their order took four to six weeks to get to them or that their products came in several shipments. Flash sales can be extremely effective when it comes to attracting customers, but if the customer doesn’t get the goods in a timely manner and with transparent communication, they are unlikely to purchase from you again.
While daily deals are great for increasing sales and highlighting specific items quickly, the end goal for retailers should be to gain new customers, according to a spokesperson for Dotcom Distribution. Flash sales can lead to new customers making full-priced purchases - both during and after the sale, if you run the sale well.
eBay and other such markeplace sellers can use the Markdown Manager feature for stores, or announce their sale via a newsletter, blog or web site.
Have you tried running a flash sale, and how did it work for you? Is it something you think you might try, and why or why not? Post a comment here!