Flash sales became popular as an offshoot of the deals industry. Consumers proved they have a healthy appetite for bargains but they’ve also begun to tire of the constant hype. At the same time, traditional retailers are encroaching on the flash-site territory. These trends are leading operators to change their strategy and their marketing tactics.
The flash sale industry has been reorganizing this year in order to strengthen the value proposition. For example, Fab.com reported that it is pulling back from flash sales and is instead promoting unique items that users can find on its site. The site’s strategy will be all about design. Similarly, Gilt and RueLaLa have had layoffs and are now repositioning themselves. Even Groupon is shifting away from a sole emphasis on deals and is looking to derive more income by managing loyalty programs with its retail partners.
Flash site operators have been focusing on mobile and often see “more than 40% of their revenues coming from mobile devices.” Consumers like the idea of finding a good deal while they are out shopping and the short time frame means that sales can quickly spike. However, traditional retailers are increasingly copying the strategy to get their shoppers into the store.
Part of the competitive problem for flash sites is the low barriers to entry. Offering good deals to email list subscribers is easy for mainstream retailers to mimic and they can siphon off consumers who are flash site evangelists. Industry analysts say flash sites must offer products that consumers cannot find elsewhere in order to survive. Curation and personalization will be key. Operators must also continue to promote effectively through mobile devices to capture consumers while they are out shopping. Tapping into the excitement and emotion of securing a good deal on a hard-to-find product will help these operators maintain their niche.
To learn more about heavy daily deal purchasers, check out the AudienceSCAN report available on the Research Store at ad-ology.com.[Sources: Enright, Allison. Fab.com changes direction. Internetretailer.com. 1 May 2013. Web. 25 Oct. 2013; Tode, Chantal. Flash sales must combine personalization, mobile, urgency to stay relevant. Mobilecommercedaily.com. 22 Oct. 2013. Web. 28 Oct. 2013]