It’s not surprising that leaders in the flash sales arena claim that they know the business best. As Greg Bettinelli, SVP of marketing at HauteLook.com told eMarketer, “What we do is hard. It’s a different type of business and it’s all we do. We know how to send emails to the right person at the right time. We know how to produce sales events quickly.”
True, but multichannel retailers have their own strengths. Here are three important do’s and don’ts for retailers to make flash sales work for them.
Do—
Increase in-store sales. One thing pure-plays lack is a physical store. Multichannel retailers can drive foot traffic by creating an online daily deal that can only be redeemed in-store, which is what Nordstrom Rack recently did with a Groupon partnership. Retailers can also get creative by rewarding members with events like fashion shows, meet-the-designer parties or providing early access to sales on-site.
Adam Michelson, director of ecommerce at Optaros, told eMarketer:
“If you think of private events, they started with in-store and then they went online. No one has blended them together, and it’s the big box guys who can. Gilt and Rue La La can’t because, hey, they don’t have stores.”
Use size to your advantage. Established retailers already have relationships with vendors, and being larger, they are typically able to leverage deals that smaller upstarts would have a hard time wrangling. There are a slew of wine flash-sales sites that were on the scene early, but Wine Shopper, a six-month-old members-only offshoot of Wine.com, has the name recognition to attract shoppers and the network to source deep discounts.
Reach out to new demographics. Retailers are already blessed with a core set of shoppers, but there is always room to branch out. Some have learned that when they’ve started hosting flash sales, the shoppers they lure aren’t necessarily the same set of customers they’ve always relied on. When staid Saks Fifth Avenue began Fashion Fix, a flash sale periodically announced to email subscribers, they attracted “A younger, more fashion-forward customer who’s shopping for convenience,” according to Denise Incandela, president and EVP of Saks Direct at Saks Fifth Avenue.
Don’t—
Ignore competitors’ expertise. If you can’t beat them, join them. Instead of going it alone, The Body Shop has staged sales through HauteLook and Target featured a sneak preview of their fall designer collections on Gilt. Retailers partnering with a flash-sales site are potentially able to reach a fresh set of email subscribers and they also benefit from a website that’s been built to handle the burst of traffic that many retail sites aren’t ready to accommodate.
Cam Fortin, director of business development at Wine.com, told eMarketer:
“Almost all the traffic is driven from an email that you’re sending at one time of day, so you have a huge peak of website activity at say, 9am. All of these flash-sales sites that have had huge membership growth have had to figure out how to build their back end to handle these huge spikes and surges in traffic.”
Stray from your brand. On December 16 to 18, Gilt ran a sale where each day members could vie for one 2011 Volkswagen Jetta slashed $10,000 down to $5,995. Delving into automotive is a bold move—and could work—but featuring a lower-end compact car clashes with the luxury image that Gilt has cultivated. While attention-grabbing, the sale can be seen as a mere publicity stunt. The same would be true if you had built a following selling discounted Nikes and Adidas and decided to stage a Louboutin sales event.
Offer the same merchandise that’s already marked down on your retail site. If it starts looking like your flash sales are thinly veiled clearance racks, savvy shoppers will know. Retailers have to give consumers a reason to click. Saks Fifth Avenue is not just using flash sales to liquidate off-season items but is also creating new merchandise with vendors using older fabrics, essentially producing fresh apparel specifically for Fashion Fix. J. Crew recently launched a weekends-only (that’s currently open daily for the holidays) online factory store to make goods specifically created for their out-of-the-way outlets accessible to a larger audience.
Final Takeaway
Retailers might not have the same dedicated resources as standalone flash-sales sites, but they have many factors working in their favor. Brand recognition, strong supplier relationships and multiple channels to sell through are all at their disposal. This is a case where tradition doesn’t have to trump innovation.
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