Wednesday, May 16, 2012

Just Ignore The "Sales" In Flash Sales

Flash sales are an amazing phenomenon.Companies like have been conducting these curated sales, with each item available for only a very limited time, to great success (Fab recently raised $40 million in new investment, and will generate over $100 million this year). And they are not alone: there are literally dozens of flash sale sites, ranging in specialties on sporting goods (The Clymb), furnishings (Joss & Main, etc.), and every vertical under the sun. For the consumer, quite the win. Or is it?

The interesting evolution of flash sale sites start with the same premise. Take, for instance, the come-hither for one of the flash sale granddaddies, Gilt Groupe: "Join Gilt to find the best brands at up to 60% off". Each of these sites promise unheard of savings on amazing brands, all for extremely limited times. And in the early days of their sites, it is so: many run staggeringly low prices for brands. Why and how? Simple: acquisition marketing. These sites want to build their customer bases up, so they are paying to acquire you by offering amazing discounts. Again, good deal for both the site and the consumer.

What's more interesting in the next phase of the evolution: less of a focus on discount, and more on "curation." A good example: today's new sales have opened, and they are featuring, among the great finds, the Scosche flipSYNC II keychain, allowing you to always have an iOS sync cable with you, and for only $10, a health savings from the $17 they show to be the normal price. And, just to prove it, the venerated Amazon (which I am currently trying out a Prime membership to see if it changes my buying habits), offers the same cable for, you guessed it, about $17. All great, right? Except a search on Amazon yields this version...for only $8.95 from a 3rd party seller, and $9.72 from Amazon directly, LESS than Fab's amazing deal.

What this clearly illustrates is the power of tastemaking and curation over endless choice. Is there a difference between the $10 keychains at Fab and Amazon? Probably, but it's hard to determine what, if any. But instead ask this: would you prefer to spend your valuable time searching for the lowest price, constantly doing detective work to determine if your pennies were spent wisely, or would you prefer to have people with great taste bring you fun finds for your perusal, at great prices? Steve Jobs described the iPad as a "lean back" experience: you interact with it, and let it bring you great information and entertainment, vs. the "lean forward" experience of a laptop. In many ways, flash sale sites are becoming the "lean back" experience of shopping. My only critique would be to find a way to mitigate the discount messaging, and focus instead on the star quality of their selections, like OpenSky does with their celebrities.

Flash sales are clearly much more than a fad, and consumers will continue to benefit from their evolution. Just don't call 'em "sales" so much. ;-)

1 comment:

Tim Kilroy said...

You are right, these sites are no longer about discount, but point of view. These are sites that point you to an aesthetic or lifestyle in a bite size way. On a side note, Amazon Prime is completely worth every penny. (The shipping is great, and now the video streaming is terrific too! (If only Apple TV would support Amazon video, I would be happier...but I may need to buy a Roku box too to take advantage of Amazon video)