4 Tips for Running a Flash Sale
Flash sales are here to stay.
According to Reuters, online retailers who leveraged flash sales grew twice as fast as e-retailers who didn't use flash sales during the most recent holiday shopping season. Top flash-sale retailers, including Fab.com, nearly doubled their site traffic in 2012, an example of how retail brands can successfully claim their piece of the growing $2 billion business of flash sales.
A well-executed flash sale can drive new and existing customers to your website and motivate them to buy full-price merchandise as well as items that are being offered at a discounted rate. If shoppers have a good brand experience, many of them will return to make additional purchases after the sale has ended.
But in a mad rush to take advantage of the flash-sale concept, some retailers have run flash sales without proper planning and preparation. As a result, their flash sales have backfired and sent shoppers fleeing from the brand in droves.
Flash sales can be a great way to boost revenues and customer loyalty, but before you run a flash sale, there are several issues that need to be considered. Here are four of them:
- Inventory depth: Nearly half of all flash sales sell out of inventory sooner than expected, forcing brands to turn away eager customers because products are out of stock. To avoid irritating large numbers of shoppers, ask your logistics provider for real-time inventory tracking figures and accurately align available inventory with anticipated demand.
- Product mix: Effective flash sales offer products that are appealing to typical flash-sale customers. For example, more than half of all flash-sale customers are women, so it may be important to weight product selection toward female shoppers. Before you launch your next flash sale, evaluate your typical flash-sale demographic and adjust your product mix accordingly.
- Product previews: Flash sales force shoppers to make quick purchase decisions. Improve your conversion rate by offering product previews in the days leading up to the event. When shoppers have the chance to explore products ahead of time, it's easier for them to buy the product during the sale. As an added benefit, previews increase site traffic before the sale even begins.
- Ability to ship: Many online retailers invest significant time and resources in planning the front end of their flash sales, but fall short when it comes to back-end shipping and logistics requirements. Today's consumers are savvy shoppers who expect the brand experience to continue until their items arrive at their homes, and they won't tolerate four week- to six week-shipping windows. Before you run a flash sale, consider whether you have the shipping and fulfillment capabilities to meet customer expectations.
Flash sales are essentially a digital version of traditional limited-time or sample sales. In many ways, the challenges of running a flash sale are similar to the challenges brick-and-mortar retailers face when they offer sales for an extremely short period of time. But with a little preparation, it's possible to leverage flash sales to generate new sales and boost brand loyalty.
Maria Haggerty is president, CFO and COO at Dotcom Distribution, a third-party fulfillment and logistics provider.
Maria Haggerty is CEO and one of the original founders of Dotcom Distribution, a premier provider of B2C and B2B fulfillment and distribution services. She received her Bachelor of Business Administration from University of Houston, C.T. Bauer College of Business with a concentration in Accounting. Maria plays an integral role in developing and defining all aspects of the business, including sales and marketing, operations, finance and IT. As CEO, she is responsible for providing strategic leadership, establishing long range goals, and developing strategies for the senior leadership team. Maria has developed the systemic and procedural infrastructure necessary to provide timely and accurate analysis of budgets, financial reports and financial trends in order to assist the Board, senior executives and clients in performing their responsibilities while achieving favorable results. She works closely with the leadership team to enhance, develop, and enforce procedures that will improve the overall operation and effectiveness of the corporation. During her tenure at the Dotcom, Maria has developed an environment of continual improvement by supporting the Senior Leadership Team and their department managers on continuous process, space labor, automation, and financial best practices. Prior to founding Dotcom, Maria was a CPA at Arthur Andersen and was later the CFO of GoodTimes Home Video where she helped grow the company’s distribution business. When Maria is not in the office, she enjoys traveling around the world and practicing her photography skills.