There’s a reason why Black Friday is the Christmas morning of retail. It’s one day in a year when shoppers risk blood, sweat, and tears to score unbelievable hauls. Stores only need to kick the doors open and welcome the smell of fresh bucks. It’s commerce on steroids. But why do marketing tactics like this work so well?
They work because they hit all the right buttons for consumers: limited time, limited stock, and great value. It’s the perfect blend of immediacy and the thrill of finding a good bargain. In the eCommerce world, we call this the flash sale.
Flash Sale and the FOMO effect
A flash sale is a time-bound promotion tactic applied to products of limited quantity, available at significant discounts. This tactic is famous for turning shopping psychology in over its heads. Rather than appealing to customers’ needs, flash sales are all about their wants.
JD Stice, the COO of Jane.com, a popular flash sale marketplace, describes this as the FOMO effect (Fear of Missing Out). On his interview with 97th Floor, he goes on to talk about this commercial phenomenon:
“It’s a business model of almost a FOMO (kind) of urgency. Our audience is like ‘What’s on Jane?’ It’s really like the surprise mentality of ‘what’s new, what’s next’. It’s the same mentality that we’re playing towards. It’s the same way that people consume social media. They’re going on Instagram and Pinterest and it’s like ‘what’s new?’. It’s a total discovery mindset as opposed to like a search-based mindset.”
For shoppers, flash sales are more of an experience rather than a chore. You shop to be entertained. On sites like Jane.com, deals change everyday so users come back almost daily to not miss out on new deals. Customers even subscribe to daily emails and stay up late to catch the flash sale which usually goes live at midnight.
Because of the crazy discounts, purchases are also usually low-risk. It’s pretty easy for shoppers to walk away with a haul every time they visit. This virtuous cycle (or vicious, depending on how you look at it) is the reason why flash sales are so effective.
If you’re an online merchant, this tactic can benefit your business in a variety of ways:
- It helps move stale inventory faster so you can make room for new products.
- Great flash sales usually generate buzz and bring in new customers willing to try your brand.
- It’s a great way to introduce new products and get a lot of customers to sample.
- The high conversion is great for encouraging repeat purchases.
- You can foster customer loyalty by offering exclusive flash sales for avid shoppers.
- And finally, when deals are aptly priced, flash sales rake in a ton of revenue for your business.
You don’t have to be on a flash sale site to treat your customers to some sweet deals. You can run your own flash sale right in your eCommerce store. Here are some tips for mounting a successful flash sale.
Pro Tips on Running a Flash Sale
Put the customers first
It’s very tempting to jump into doing a flash sale with a goal of chasing more ka-ching. However, running a sale for the sake of making a sale is self-defeating. It often makes underwhelmed customers and yields short-lived returns.
Begin with a mindset that your business only grows at the rate that you provide value to your customers.
Wear your customers’ shoes and ask: What products would get me excited about this flash sale? What things do I need to know (measurements, sizes, options) to make an informed decision? Will the store be helpful in case of returns or exchange?
If you start any campaign with a mission to delight your customers, you create loyalty. Revenue lift follows closely behind.
Define your objective
To best measure the impact of your flash sale campaign, you have to define a goal to base your KPIs on. Is it to drive old stock out the door? Is it to encourage the purchase of new items? Is it to reward customers with a private flash sale? Is it to reach sales quota as you end the quarter?
Your objective will guide your campaign strategy. This includes your product selection, discounts
Select your target customers
It’s important to remember that flash sales are not a one-size fit all. Focus your strategy on your target customer and design your flash sale around their interests and motivations.
The clearer your focus, the greater
Find the sweet spot
eCommerce professionals are yet to come up with a formula for the perfect flash sale offer. But for starters, strive to find the sweet spot among these factors: markdown price, time frame, profit margin, and sale frequency.
Offer your products cheaper than Black Friday prices and you risk losing your customers’ interest in future promos. Keep a sale open for too long and you miss creating urgency. Get too excited with slashing prices and you may lose sight of your margins. Run flash sale campaigns too often and the thrill dwindles down.
It’s a tricky subject but one that you can learn through experimentation, A/B testing, and a bit of math. Try launching different campaigns and see how each one moves the needle.
Maximize key holidays and sales dates
Holidays like Valentines’ day, Christmas day, and Mothers’ day are special times of the year when consumers are emotionally ready to shop. So ride the holiday wave and schedule your flash sales around key sales dates.
You may find this calendar handy:
Pro tip for wholesalers: Black Fridays are still crazy. But reports show that more shoppers are starting to skip this holiday in favor of Cyber Monday. Keep that in mind when you save your best-buys for the (new) craziest shopping day of the year.
Get the word out
Once you have planned out your strategy and prepped your inventory, start promoting! Prepare to tease by giving a preview of the items going on sale and the huge discounts you’ll be offering. If you have one or two big ticket items, don’t be afraid to hype up on them leading up to the launch.
Go loud – mobilize your social media pages, newsletters, website, and even your SMS. Ask your partner brands to help you get the word out by promoting it on their pages.
You can also experiment on sponsored posts to extend your reach. Allow customers to sign up for reminders so they won’t miss it when your flash sale goes live.
Go beyond the transaction
Finally, remember that flash sales are only meant to get customers in the door. Making them stay will be the experience. So when you plan your campaign, make sure you also cover the post-sales.
Prepare your eCommerce site and plugins for the spike in traffic. Closely track the check out navigation. Have a customer support team in place to handle inquiries.
Lastly, have a nurturing campaign in place to keep connections warm. That’s how you get happy customers to come back even when you don’t have a promotion going on.
What’s your favorite flash sale experience? Share it with us in the comments.