Four Tips for Flash Sale Success

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Four Tips for Flash Sale Success

By Maria Haggerty, President, Dotcom Distribution - 10/01/2013
In the old days, when retailers wanted to drive large volumes of shoppers to their stores, they turned to limited-time sales or sample sales. Leveraging the promise of deep discounts on specific items, retailers gave shoppers a reason to visit their stores and explore their product lines in the hopes that some of those customers would return after the sale had expired.

In the Digital Age, the idea of driving shoppers into the store has become much more complicated, especially now that consumers expect anytime, anywhere access to their favorite brands via online and mobile channels. When it comes to retail experiences, consumers expect to have a highly personalized and engaging event every time they visit a retailer's online store.

So to drive hordes of online shoppers to their sites, web-based retailers have taken the tried and true sample sale concept and transformed it into the “flash sale” — an e-commerce promotion in which retailers offer special deals for an extremely short time period.

The sudden rise of flash sales
Flash sales quickly have become a fixture of the online retail landscape. During the 2012 holiday shopping season, e-retailers who utilized flash sales grew business at least twice as fast as online merchants who chose not to leverage the flash sale concept, according to Reuters.

What's more, comScore reports that visits to the top flash-sale sites, including  Gilt Groupe and Fab.com, nearly doubled in 2012. Even some traditional retailers like Vineyard Vines are achieving success with flash sales and one- to two-hour “power lunches.”

For e-retailers, the benefit of flash sales is that they channel consumers to the retailer's website and invite them to engage with the brand's digital experience. Similar to the traditional limited-time sale, the goal is for flash sale site visitors to purchase flash-sale items as well as other full-price merchandise during their time on the site.

But the meteoric rise of the flash sale hasn't delivered exceptional results for all retailers. In an effort to cash in on the flash-sale bonanza, some e-retailers have leapt into the fray without proper preparation — effectively driving new customers away from their brand and products.

Successful flash-sale strategies
Many retailers are considering flash sales as a way to jumpstart site traffic and entice new or returning customers to make a purchase. Although the idea of a flash sale is solid in concept, there are several questions e-retailers need to ask to ensure a well executed sale and avoid a retail disaster.

1. Do you have the inventory depth to run the sale?
If successful, your flash sale will result in a high volume of orders for a small number of products. But more than 45 percent of flash sale products sell out faster than anticipated. This means that many retailers are effectively driving customers to their sites and then informing these customers that the sale item is out-of-stock — creating ill will between the brand and its customer base. Your logistics provider should be able to view and track inventory in real-time, providing the visibility necessary to accurately gauge the amount of inventory needed for the sale.

2. Have you selected the right products to sell?
Effective flash sales leverage a combination of the right products and the right shoppers. So to improve the success of your upcoming sale, you need to develop an accurate profile of the types of shoppers who are visiting your site for limited-time offers. For example, roughly 57 percent of flash sale buyers are women. By tapping into similar insights, you can capture the information you need to align your product mix with your brand's flash-sale demographic.

3. Have you previewed the sale items?
Flash means fast, and flash sales require customers to make quick purchase decisions, especially during the last few minutes of a daily deal. Previewing flash sale items prior to the sale allows customers to begin the decision process earlier and makes it easier for them to pull the trigger when time matters. With the right strategy, previews can also be used to drive additional traffic to the site during the sale.

4. Are you ready to ship the items?
Flash-sale shoppers make decisions about your brand based on the customer experience during and after the flash sale. But according to a recent Dotcom Distribution Facebook Flash Sale Analysis report, 22 percent of flash sale comments on Facebook relates to a negative shipping experience. Flash sale buyers often complain that it took four to six weeks to receive their orders or that their products arrived in several shipping installments. If customers don't receive their purchases in a timely manner with transparent communication, all of the work you have invested in attracting new customers will be wasted because your flash sale customers won't purchase from your store again.

Going forward, the prevalence of flash sales is likely to increase as e-retailers try to attract new customers with hard-to-resist retail experiences. But like any retail promotion, flash sales require a certain amount of planning on both the front end and backend.

To transition new site visitors to repeat customers, you need to make sure that your brand's exceptional customer experience extends to the arrival of the merchandise on the customer's doorstep. As limited-time sales continue to evolve, the ultimate goal will always be a well-rounded customer experience that results in brand loyalty. 

Maria Haggerty is president of Dotcom Distribution, an e-commerce fulfillment solutions provider.