Does Flash Sale make sense for eCommerce today?

Does Flash Sale make sense for eCommerce today?

Does a flash sale make sense for you?

Wikipedia defines flash sales as “Deal-of-the-day (also called flash sales or one deal a day) is an ecommerce business model in which a website offers a single product for sale for a period of 24 to 36 hours. Potential customers register as members of the deal-a-day websites and receive online offers and invitations by email or social networks.”

But, Xiaomi (www.mi.com) redefined the idea of flash sales. They are mobile phone manufacturers who introduce a cell phone to the market and open the sale for a limited time for pre registered users only. For them, this cuts out middlemen as they go directly to customers. Their phones are only sold on the internet, typically on their or a partners’ site. This has worked so well that they have become one of the biggest smart phone companies in the world.

As a eCommerce site owner, the big question is “Is a flash sale on my site good for me”? (We are not talking about becoming a flash sale site, but conducting flash sale on your site).

Here are some factors

  1. Flash sales have one thing in common – lower price. So #1 criteria is you need to be able to sell one or more products at a price that is difficult to match!
  2. Be prepared with a hosting service that can scale up and down easily. Moreover, you need to be architected to do so. Hits on the site during a flash sale can bring down the site. There are many examples of this including the biggest names in the business.

Why flash sale?

  1. Helps in inventory management – you do not need to hold inventory.
  2. A good customer acquisition strategy.
    With increasing costs of PPC, you may be looking for alternative ways of acquiring customers. If you are running a flash sale for a brand, a joint advertisement budget can help you reduce the cost of your customer acquisition.
  3. Hype value – A flash sale generates hype on social channels and some of the customers who visit may come back again
  4. Piggy back on a brand – if you do not own a brand, you can host the flash sale on your site. The advertisement budget of the brand will drive sales to your site. This will increase your site’s popularity and help improve your customer acquisition.

Some popular examples

  1. Zulily.com, is a billion $ a year flash sale site for women and kids. They use super personalization and most of their customers check their site once a day to see if there is a new deal for them. They also keep brands “fresh” – not repeating brands and products too often. They rely on smaller brands.
  2. Xiaomi (www.mi.com) – the flash sale cell phone manufacturer. Visitors generally pre-register for getting low prices and appear at the click this instant sale. Out of stock messages come up in seconds from the start of the sale.
  3. GOSF – a once in a year, India only sale from Google, brings multiple online stores to offer discounts simultaneously and as advertised on the GOSF.IN site. Participants report 2-3x increase in volumes during the 3 days it is run, typically in December.

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