- Find out whether flash sale ecommerce will help or harm your business, the four reasons flash sales fail, and five best practices
- Discover the ecommerce automation tool the world’s fastest-growing brands have already used to generate more than $3B in sales on autopilot
- Learn from top-performing brands how they’re leveraging flash sale automation beyond the holidays to accelerate growth year-round
It’s boom or bust in a very brief sales window.
Whether your brand is dropping an exclusive new product or running a sale during one of the year’s biggest shopping events like Black Friday Cyber Monday (BFCM), many of these transactions will be executed in flash sales.
Online sales over the five-day BFCM period topped $28 billion in 2019, with most of the sales happening within a four-hour window on Cyber Monday.
Adobe says these “golden hours of retail” are because of “deal FOMO,” or the fear of missing out on last-minute deals near the end of the day.
But before you drastically slash prices, zealously market your sale, and eagerly wait for customers to beat down your digital doors, there’s some planning that needs to take place first:
- What is a flash sale?
- Should you run a flash sale?
- Should you run a flash sale?
- Flash sale failures to learn from
- How to run a flash sale: 5 best practices ⚡
- How to automate your next flash sale
- Flash sale ecommerce: Automating sales events all year
Keep reading to discover the keys to flash sale success
But if you’d like to unearth the secret weapon thousands of high-growth brands are using to launch more campaigns this holiday season, download our exclusive ebook for a behind-the-scenes look.
1. What is a flash sale?
A flash sale is a discount or a promotion offered for a limited period of time. They can be great opportunities to sell a large quantity of products in a short period of time, but will require some preparation if you’re expecting a large increase in your checkouts. The exclusivity and urgency taps into shoppers’ deal FOMO, which encourages impulse buying.
In most cases, special preparations are recommended only if you’re running a flash sale and you expect to make over ten times your usual daily sales within two hours or less.
2. Should you run a flash sale?
There’s no sugar coating it—flash sale ecommerce can erode margins and attract bargain hunters with no intention of becoming loyal customers. In a worst-case scenario, if you fail to deliver on inventory, fulfillment, and shipping promises, that can destroy your reputation.
On the flip side, a well-executed flash sale that offers merchandise at a steep discount for a brief period of time can grow the top line lightning fast, increase customer lifetime value (CLTV), and earn loyalty you otherwise might not have.
How can you tell if a flash sale is right for you?
Ultimately, the goal you set will determine the answer:
- Unload excess inventory
- Acquire customers
- Grow top line
- Lift profits
You can also figure out in a relatively short period of time whether flash sales are right for you through testing.
It’s exactly what mobile device case manufacturer Case-Mate did. In the span of just two weeks the company ran two mini-flash sales and compared the performances against non-flash sale KPIs:
Results of the first flash sale include:
- 51% increase in traffic
- 50% increase in conversion rate
- 236% increase in revenue
Results of the second include:
- 5% increase in traffic
- 105% increase in conversion rate
- 78% increase in revenue
On the surface, these results look great and the company says it’s planning similar promotions in the future.
But notice what’s not immediately discussed in the case study: profitability.
I know what you’re thinking, “But I’m not solely concerned with whether a particular flash sale is profitable.”
That’s great, but if you’re concerned about the long-term, you absolutely need to be tracking flash sale customers in your analytics after the first purchase to see:
- If you’re able to upsell
- If you’re able to cross-sell
- If flash sale customers become loyal
This piece shows you how to accurately calculate CLTV (among other key metrics):
Knowing your CLTV is key because it will help you gauge the quality of your flash sale customers. If flash sale customers compare unfavorably with CLTV, reconsider holding flash sales.
If flash sale customers compare favorably with CLTV, compare flash sales with costs associated with other acquisition techniques and balance with top-line growth accordingly.
While the data is several years old, research suggests that satisfied flash sale customers return to spend another 385% of the first purchase.
But here’s another concern to consider…
Might running a flash sale actually bother shoppers and push them away?
3. Flash sale failures to learn from
Flash sale fatigue, or the mind-numbing amount of bargains consumers have learned to ignore, is a headwind your next flash sale must nimbly cut through if it’s to be a success.
Only 15% of consumers say they find marketing emails useful, so shoppers receiving flash sale promotions in their inbox—especially during the holidays—might ignore your message.
One reason for this is because the flash sale itself has become a business model. Cash-flush “daily deal” sites and flash sale platforms appeared to peak during and after the recession that began in 2008 and crashed quickly amid competition, customer fatigue, and the recovery.
It prompted industry trade publications to pronounce the flash sale boom over:
- Totsy liquidated after burning through $34 million
- Fab, once valued at $900 million, now sits at $50 million
- Groupon lost 80% of its market cap in the year following its IPO
- Zulily once had a cap of $7 billion and was acquired for $2.4 billion
- Rue La La, acquired by eBay, was sold because it dragged down profits
Worse, 43% of respondents in this survey said they don’t like flash sales because they fear being disappointed by not getting the item they want. The same survey revealed that while overall satisfaction with flash sales is generally average or above, just 5% rated their experience excellent:
Consumers who are disappointed by flash sales often vent on social media which in turn harms your brand. To quantify that, 44% of the more than 2,700 comments studied in a content analysis of Facebook pages run by flash sellers were negative.
That’s a lot to be up against before you’ve even started, but fortunately adding inventory quantities to your product pages and using an app like Bold Commerce’s Product Discount can eliminate some of those hesitations from the outset.
Here are four additional reasons flash sales fail to impress and how you can fix them …
Customer perception is shaped not only before and during a flash sale but also by what happens after a purchase is made. Shipping flash-sale items quickly is paramount. Nearly two-thirds of consumers expect their orders to arrive in 1-3 days and more than half want you to offer overnight shipping.
You can make your flash sale stand out by offering free shipping. Not only can doing so help you differentiate your brand and better compete with Amazon, but free shipping can also increase your AOV (average order value). Research suggests 48% of consumers are willing to add additional items to their carts to qualify for free shipping.
Why is shipping so crucial for flash sale success? It’s not uncommon for flash sale customers to complain of waiting several weeks to receive merchandise that arrives in multiple installments.
According to an ecommerce fulfillment solutions provider, 45% of flash sale items sell out faster than expected. One way to really disappoint customers is to build excitement, use scarcity to drive them onsite, and then tell them the item they want is out of stock.
Not having enough inventory to satisfy expected demand or not being able to track inventory in real-time can negatively impact future sales as well. Likewise, misjudging demand can leave you with excess inventory that is costly to warehouse and account for.
Alleviating this comes in three flavors. One, do a thorough job in researching the demand and prepare your supply chain accordingly. Two, be prepared to say “I’m sorry” and keep in constant communication with buyers if you mess up. Or, three, embrace scarcity to its fullest and invite visitors who arrive too late to get notified of your next flash sale via email or Facebook Messenger.
Site Crashes Fail
Flash sales often result in habitual site crashes even for large brands. If your business model relies on frequent flash sales, load testing your site is a must. The extra server capacity required for successful flash sales is likely cost-prohibitive during non-flash sale times.
The ability to scale on demand is necessary to prevent crashes. Not forecasting potential flash sale traffic based on user behavior in response to email marketing, PPC campaigns, and social media traction results in having no visibility into potential peak transaction load. Lastly, be sure your ecommerce platform and any apps or third-party tools that depend on API calls to function are likewise load tested.
Even for experience flash sellers, bots are a plague. In late 2018, GQ described the rise of sneaker drops as “lottery tickets,” noting, “[A]s in actual lotteries, people have discovered ways to work the system to their favor. ‘Bots’—computer programs that can work their way to ecommerce checkouts faster than any human—are the most popular hack.”
And it’s not just shoes. Limited-run editions of everything from purses to cosmetics to sweatpants to diaper bags have all been hit by the bot invasion. So too have deep-discount events and holiday promotions.
The problem is two-fold. First, bots rob loyal customers of the chance to purchase merchandise they genuinely love. Second, bots have also created a thriving black-market online, on account of which, retailers and fans both suffer.
One solution is to leverage Captcha forms—letter quizzes or picture tests—at checkout. Launchpad, which we’ll dig into more below, includes this natively, enabling you to set Captcha forms to turn on and turn off during flashsales.
Another solution is to use a tool like Shop Protector. Unlike traditional bot-detection software (i.e., Captcha) Shop Protector tracks natural onsite behavior of humans and applies that logic to all website sessions.
“Human Presence helped us increase customer satisfaction by giving our real fans a chance to beat the bots on Social Status and A Ma Maniere,” says Robert Christopher, E-Commerce Manager The Whitaker Grp. “Initially, we were concerned about what a service like this would do to sales but were quickly relieved to find that for each release we traded selling out in a few seconds for selling out in several minutes while offering a better user experience.”
4. How to run a flash sale: 5 best practices
1. Pick the right time
Brick and mortar stores have taught us people will forgo sleep, line up before dawn, and behave in ways they otherwise might not for a great deal. But, this doesn’t mean we need to “open the doors” to our flash sales at 4 am.
When should you run a flash sale?
That’s the question I put to Greg Merrell, managing partner of Simplistic—a Shopify Plus Partner that’s not only worked with mega-retailers like Fashion Nova, but also creates one-off flash sale sites to accompany major-media appearances like Good Morning America, Shark Tank, The Ellen Show, and more.
“Sorry to disappoint, but we don’t recommend any ‘best-practice’ timetables for scheduling a flash sale, just as there are no best-practice timetables for advertising. The schedule is going to depend on your product and target customer.”
That means, look at your analytics and see if any purchasing patterns emerge:
- What day(s) of the week do people historically purchase?
- What time of day do people historically purchase?
- When are your email open rates highest?
Keeping Merrell’s warning in mind, we can suggest some starting points for timing using data from Launchpad—an automation tool for major online events on Shopify Plus that we’ll explore more below:
How about ending a flash sale?
As for the best days of the week:
Finally, what about duration?
Research suggests shorter is often better:
- Two-hour flash sales result in email open rates 14% higher than average
- Three-hour flash sales have the best transaction to click rates: 59% higher
Turning again to Launchpad data, we see a similar though slightly extended trend:
2. Define Your Target Market
Defining your target market hinges on the goal you set for your flash sale.
A huge deal is what flash sale consumers are after so it’s not as important to personalize these communications as you normally would. However, the wider you cast your net the lower your conversion rate is likely to be, the higher your CPC, and the lower your ROI.
This may also hurt your Quality Score if you’re advertising the sale via Google Ads as well as harm your page rank and ad position which can be extremely detrimental to a sale that may only be lasting for a couple of hours.
That’s why mini-flash sales are great ways to begin and test.
Mini-flash sales aren’t characterized by extremely small audience sizes. Instead, they simply use a bit of data intended to narrow the net you cast to improve your KPIs. The more you narrow your target, the better shot you have at generating higher returns.
If the goal is to target new customers:
- Don’t overtly market the flash sale to your existing email list
- Identify consumers who have shown interest in flash sale products or who follow a competitor with similar products
- Poach these consumers targeting competitors’ Facebook audiences or by creating a list of their Twitter handles
- Run limited-time Google Ads that are triggered only by the exact keywords associated with your flash sale products
- Ask PPC targets to opt into a separate VIP email list in return for early access or some other benefit to offset PPC costs
If the goal is existing customers, target customers based on:
- Prior interest in flash sales or specific products
- Most or least valuable customers
- Inactive customers
Be sure to suppress the segment of your customer base who has already purchased the item you are massively discounting. They won’t be happy when they see their peers are getting the same item 70% off.
3. Determine What Products to Flash Sell
You may decide to hold a flash sale on your marquee product and be done with it in 2-3 hours without much more thought than that.
This might work well (and be the only option) for an ecommerce company with just a small handful of products.
However, if you’re a retailer with thousands of items—many of which aren’t moving as fast as you’d like—how do you identify the ones that might work best in a flash sale?
- Use Google’s Keyword Planner to identify search volumes
- Identify poor or negative product reviews left by customers of your competitors and poach them with an intelligent flash sale ad
- Leverage keyword spy tools like SEMRush and SpyFu to identify which items your competitors are focusing on and undercut them
If your flash sale is to attract new customers:
- Flash sell excess high-margin seasonal inventory to move it quickly and reduce accounting costs
- Start a relationship or poach a competitor’s customer by flash selling popular, low-margin merchandise
- Hold a “secret” and ongoing flash sale for new customers, promoted through your confirmation email
If your flash sale is aimed at existing customers:
- Select items based on high traffic or low purchase volumes
- Flash sale items only to segments that have expressed some interest in them in the past (visited product page, clicked on an ad, etc.)
- Hold a “secret” and ongoing flash sale for existing customers, promoted through abandoned-cart emails
4. Create a Promotional Strategy
Regardless of who you’re targeting, you should be “selling” your flash sale before the actual sale window.
You’ll go about building anticipation differently based on whether you’re targeting existing or new customers. The tactics that’ll be emphasized or given more weight will be different.
However, no amount of marketing can save a flash sale unless it combines great merchandise at a deep discount.
It’s really this simple and why scarcity (quantity and sales length) is a foundation on which you’ll build your marketing mix. The key, according to research, is touching people via email shortly before the sale is to begin.
This isn’t to say PPC ads aren’t important.
PPC might better be used in the days leading up to a flash sale to generate opt-ins that ensure you have direct last-minute access to prospects. But it’s email that drives the most flash sale traffic. In fact, email sent within 24-hours of the start of a flash sale resulted in a 35% lift in transaction rates.
While it may be the most lucrative, email is just one of the levers you have to pull.
This case study details how Facebook page likes, lookalike audiences, and scrolling product ads that show multiple product images per ad supercharged a recent flash sale that resulted in:
- 81% of sales the day of the flash sale coming from Facebook
- Facebook converting at 2.9% vs 1.45% from other channels
- Facebook’s CPA of $33 dwarfing site-wide CPA of $73
The key to determining which channel is likely to produce the best ROI for you is, as usual, hiding in the data:
- Where do your prospects and customers spend their time?
- What percentage of your marketing currently goes to those channels?
- Which channels yield the highest CTRs and conversions as well as lowest CACs?
Weight your spend according to where and how you’ve had past success selling the items included in your flash sale.
5. Make Your Flash Sale Stand Out
To better gauge demand and ensure you have the inventory and server capacity to withstand the deluge, consider asking people to register. It’s similar to a traditional auction where you have to provide contact information to receive a bidder’s card.
People who want to reserve the right to purchase must register before the sale.
Not only will you get a ballpark idea of what peak load capacity may look like and how much inventory you may need, but you’ll also position yourself to reduce your PPC spend a bit as you’ll be collecting email addresses for contact purposes as you get closer to the sale.
VIP or Early Bird Flashes
This twist achieves many of the same goals registration does but adds a bit of mystery to the scarcity inherent in flash sales. Not only does it ask users to register but it creates a bit of intrigue by keeping secret some or all of the items to be included.
Stimulate user imagination by promising a mystery item to be included in the sale just for consumers like them. Or, promise a first look or sneak peek at the mystery items shortly before the sale.
Once again, you’ll position yourself to better gauge demand. You’ll also create a reason for prospects to visit your site prior to the sale—people who otherwise might not have. This provides you rich data about which products users show the most interest in and can help you select which items you designate as mystery items. The data also provides you with retargeting opportunities long after the flash sale ends.
“As a brand, your job is to know your customer,” says Greg Merrell, “leverage that expertise to provide them with a great offer on something they want at a time that’s appropriate to them.
“A flash sale shouldn’t be an opportunity—or, be perceived to be an opportunity—for you to offload old inventory that you need to liquidate. It should be a reward for your biggest fans and close followers first and foremost. They’re your evangelists and their word of mouth will do a lot to drive additional sales.”
5. How to automate your next flash salet
Now that you know whether or not to run a flash sale, missteps to avoid, and best practices to follow t…
How do you actually pull it off?
It’s a lot of work especially when you look at just a sliver of the to-do list provided by a fast-growing Shopify Plus brand:
- Unhiding products
- Navigation changes
- Landing page updates
- Uploading hero images
- Collection page alterations
- Publishing a new homepage
Manually preparing your site (or building a new one just for a flash sale) is a time consuming and laborious process that drains resources that could be better spent experimenting for growth or focusing on higher value ROI-generating tasks.
But brands using Shopify Plus to power their businesses can bypass it all and automate their events with a proprietary automation tool called Launchpad, which allows you to easily schedule everything in advance, coordinate, and automatically execute everything related to your flash sale, product release, or major sales campaign.
Last Black Friday, automation was a hinge in Blenders Eyewear 10Xing their holiday sales and growing 900% YoY in 2018.
Blenders used Shopify Plus’ Launchpad to execute two separate site designs: one for its Black Friday sale, another for its new promotion on Cyber Monday.
“When things go live at midnight, you don’t want to have to stay up till midnight to do all these changes,” Blenders’ CEO, Chase Fisher, says. “We had our offers switched to go out through Launchpad. We had our themes switched to go out through Launchpad. They pushed everything through successfully.”
Similarly, after migrating to Shopify Plus just in time for Black Friday 2017, SweetLegs generate $2 million in holiday sales: a company record.
As the company expands into the U.S., SweetLegs is using Launchpad to do more with less while lifting sales: the company has run over 15 onsite campaigns in the last year, generating more than $857,000 on autopilot.
All told, Launchpad has helped Shopify Plus merchants generate more than $3 billion in sales in less than a year and a half.
Want to put your Black Friday on autopilot too?
Launchpad is just one of our proprietary ecommerce automation tools some of the world’s largest brands are using to run more campaigns, with fewer resources, and to increase sales.
Download our exclusive ebook for a behind-the-scenes look …
6. Flash sale ecommerce: Automating sales events all year
Prepare for flash sale ecommerce success and you’ll increase the odds of pleasing customers and your bottom line. Flash sales are exciting; they can differentiate your brand, attract new customers, and earn trust—especially when you avoid common missteps:
- Add inventory quantities to product pages
- Use discount applications for simple checkout experiences
- Estimate demand, load test your site, and prepare your supply chain
- Be willing to leverage scarcity as well as communicate clearly and often
Equally important, develop a plan that clearly defines your flash sale, its objective, and how you plan to pull it off:
- Identify precisely why you’re having a flash sale
- Determine which products you’ll sell and how deep discounts and elevated volumes will impact your top and bottom lines
- Target flash sale prospects with behavior-inspired email, relevant PPC ads, or VIP opt-ins to improve results and gauge demand
Lastly, consider automating your next flash sale with ecommerce automation tools like Launchpad. Not only has Launchpad generated billions of dollars for Shopify Plus businesses during and after the holidays, but it also frees up time for retailers to focus on growing their businesses rather than manually executing flash sales.
This article originally appeared in the Shopify Plus blog and has been published here with permission.