Flash Sales: How do they work and are they an effective marketing tool?

Flash Sales are a marketing technique used by firms to sell stock in a limited time by offering consumers an opportunity to buy deeply discounted products for a limited period of time.

Simply put, they are a time – bound offer of high discounts given by firm to attract buyers and offload surplus stock, if needed.

It is a highly successful transaction system popularized in the world’s largest economy around the start of this millennium.

Why is it conducted?

Flash sales is characterized as a win-win scenario in the business model and that is why has become so popular and successful.

The companies primarily offered flash sales as a proven method to offload surplus stock in their warehouses by dropping their merchandise prices drastically. Evidently, it is one of the best means to liquidate surpluses without hurting the brand image.

It was later useful to boost up sales numbers for firms by discounting off season stocks and sprucing up low sales months.

Many startups and even well established companies have also used this strategy as a ploy to attract buyers and build up brand loyalty.

From the consumer’s perspective, it is an opportunity to capitalise on an economic, discount – ridden, profitable transaction.

How does it work?

Flash Sales are usually conducted online as the platform is highly conducive to quick, on-the-spot transactions for a large group of people simultaneously. Online platform is also preferred as it allows for greater market penetration at a lower cost than traditional retail stores.

The discounts are generally offered for a limited time period of one day or even less. These are heavily marketed in advance to increase awareness and widen the customer base significantly.

Since it is conducted online, potential customers receive emails and information on social networking platforms regarding the sales.

To reward brand loyalists and increase their registered buyers, sales are sometimes conducted exclusively for loyal and past customers. They also benefit from early bird access to the discounted products before it opens to the general public.

The whole objective of the ploy is to trigger the impulse buying habits of the consumers. The firms use a variety of subtle techniques and factors that stoke the urge to shop within the consumers.

  • The lure of a great bargain is usually enough to entice customers.
  • The limited period of sale and the implication of a hurriedness associated with the sale.
  • Teasers are used to create an air of suspense, excitement and anticipation before the sale to further attract buyers.
  • A limited quantity of stock offered also factors into the decision and there is an implication of products going out of stock after the sale which also makes the consumers keen to get a slice of the pie before it finishes.
  • Online shopping entails a level of convenience unparalleled anywhere else. The ease of shopping from any location whether it be home or office using a variety of devices provides additional mobility to consumers.
  • The success of an event also greatly depends on the media and online campaign run by the company beforehand promoting it. The recommendation and approval on social media and effectiveness of digital outreach through SMS, Email weighs in on the success of a flash sale.

Effectiveness

It seems clear from the evidence that flash sales are a roaring success for most industries.

It has been able to achieve its intended objectives for a variety of firms.

For a well-established company, it is a fruitful experiment to increase sales in off season and offload surplus stocks.

For budding startups in ecommerce, it has helped attract consumers and increase brand loyalty even if at a personal cost for the firms.

The consumers have been kept happy by great discount deals and offers on products and services.

However as with any marketing strategy, proper planning is essential and continuously offering deep discounts can destroy companies’ bottom lines and lead them to bankruptcy.

Practice in India

The biggest example of flash sales in India is the emerging ecommerce industry. This industry is singlehandedly responsible for bringing the concept of flash sales to India. Its success can be measured by campaigns by major players like Flipkart, Snapdeal etc. Flipkart famously launched Xiaomi brand of mobile phones which resulted in sales within seconds!

Another major player is the Airlines industry. This highly competitive marketplace is using this technique to increase brand loyalty even while sometimes incurring losses on the discounts offered. Several budget airlines have given away millions of tickets at throwaway prices to retain customer base and market share.

The success online has even prompted businesses to experiment with flash sales on an offline, retail platform. Airtel recently conducted an offline one day sale of Xiaomi handsets in its retails outlets.

As evident from its success, Flash Sales are the way ahead at least in the near future. Adaptation of this method by more businesses signals that there is no stopping for it anytime soon.

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