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Flash sales must combine personalization, mobile, urgency to stay relevant

October 22, 2013

With big retailers such as Old Navy, Kohl’s and others all offering limited duration offers, flash sales as a standalone service are losing their relevancy. However, effectively leveraging the intersection of mobile, increased personalization and the urgency of a quick sale could help turn things around.

Flash sales sites were some of the earliest success stories in mobile commerce because the immediacy of their offering was well-suited for on-the-go users looking to get some shopping in while they had a few minutes. While some are feeling the pressure as big retailers begin to play more attention to mobile, others such as Zulilly are cashing on the significant potential in the intersection of mobile and shopping.

“The biggest danger when it comes to losing relevance is the ubiquity of flash sale offerings today,” said Steve Smith, partner for planning and insights at Firehouse, Dallas, TX.

“There are just too many to process, and the uniqueness and perceived deal value has waned,” he said.

“I would suspect the field will narrow over time – consumers will decide on the set of offerings that are valuable to them, and those without a loyal audience will fall away.”

Flash sales sites often see more than 40 percent of their revenues coming from mobile devices because the idea of a limited-duration sale is well suited to the on-the-go shopping.

However, because of this success, other retailers have copied the formula, driving competition and user fatigue.

A few months ago, stopped sending daily flash-sales emails and moved toward a more tailored experience. Users opt-in to tracking technology that serves up personalized offers for the merchandise categories they are interested in shopping.

Earlier this month it was revealed that is cutting almost 20 percent of its workforce as it moves away from flash sales.

Competitors Gilt and RueLaLa each went through layoffs last year, with the latter also letting go its CEO Ben Fischman earlier this year.

Groupon’s CEO Andrew Mason was also let go earlier this year as that company tries to shift from its daily deals positioning to a broader ecommerce strategy.

Next steps
One apparent exception the problems some sites are facing is Zulilly, which filed for its initial public offering recently.

“Flash sale sites might fade in popularity, but it will not be because of mobile,” said Wilson Kerr, vice president of business development and sales at Unbound Commerce, Boston. “Mobile offers an immediate way to convert offers and deals and, as mobile commerce grows, this format will spread to other retailers and brands.

“Smart flash sale operations will bridge the gap between online and offline and think about kiosks or pop-up stores as a way to move beyond the online-only realm,” he said.

One step flash sales sites can take to address this problem is to introduce instant checkout for known users along the lines of what Amazon had done with 1-click checkout.

A streamlined checkout service would go a long way toward enhancing the experience for mobile users, who get easily frustrated with the small screens on smartphones when it comes time to type in the personal information required to complete a sales.

“Google released a case study recently that showed that flash sale leader RueLaLa had 40 percent of its traffic coming from mobile users,” Mr. Kerr said. “By adding Google Wallet Instant Buy, RueLaLa shoppers no longer had to fumble with a credit card and 50 percent of those who checked out with Google Wallet made a repeat purchase within 30 days.”

Getting personal
While has pivoted away from flash sales, it has the right idea with trying to deliver a more personalized experience.  But even better than that is being able to leverage mobile to deliver personalized merchandise with the urgency of flash sale.

“The continued personalization of offerings must help drive a more relevant sale experience for consumers,” said Matthew Witt, executive vice president and director of digital integration at Tris3ct, Chicago. “Within mobile channels, there is the opportunity to be more targeted and personalized than ever, and flash sales sites must capitalize on this.

“The biggest threat to flash sales it is the concept of Big Data and the ability for non-Flash Sales e-commerce brands to generate more meaningful and personalized offers, and the continued optimization of those offers to overcome shopper barriers,” he said. “I believe the biggest fight lies in the competition between flash sales and non-flash sales sites for the consumer’s dollar.”

Flash sales sites also need to insure they are effectively leveraging social media to drive interest in their merchandise

One challenge flash sales face right now is the recent changes to Gmail, with promotional emails being siphoned off into their own separate category. As a result, users may be checking their promotional emails only once a day or less, meaning they could be missing out on limited-duration sales.

Curated content 
Curation is another opportunity, with flash sales sites offering merchandise that is hand curated by an editor or guest designer.

For example, DailyLook is promoting its curated looks with the hash tag #dailylook on Instagram and Twitter.

Users also need content that helps them understand how to use merchandise, how to assemble looks and why they need this particular thing right now, something that Gilt has been focused on.

“Flash sale companies need to continue to find great products to merchandise,” said Sucharita Mulpuru, New York-based principal analyst at Forrester Research. “They are already quite good at mobile, and I wouldn’t invest too much doing crazy new innovative things there.

“They just need to keep pace with the new phones and operating systems that are out there, make sure that frequent users can easily and quickly access the site, and they need to make sure that they have great merchandise that is comprehensive,” she said.

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York

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