Four Developments We Foresee in Flash Sales

Flash sale sites have seen enormous growth over the past few years, and it’s no secret that they appeal to deal-hungry consumers with deep discounts and a sense of urgency. And the marketplace continues to get more crowded as new companies and entrepreneurs are keen to replicate the success of brands like Joss & Main and Beyond the Rack. Looking ahead, there are a few key trends we see emerging in the flash sale space:

Men Will Take Notice
  • Up to this point, nearly all flash sale sites in the apparel, luxury and home goods space have primarily targeted women. But men are having something of a fashion renaissance. Focused flash sales could work especially well for men who traditionally look for simplicity and convenience when shopping. Esquire has been curating looks from flash sale sites, Ideeli recently reintroduced a men’s stop, and we think there is untapped opportunity to acquire male shoppers.
More Retailers Will Get in the Game
  • We’ve already seen Saks incorporate flash sales on their regular website with “Fashion Fix” and Nordstrom acquire and brand a separate flash sales site in HauteLook. As department stores and other traditional retailers work to remain relevant, we expect to see more experimentation during the coming months and holiday season. For some brands, flash sales may be an opportunity to attract customers whose purchasing habits have changed and to build loyalty among existing customers.
Differentiation Will Become (Even More) Crucial
  • There are a lot of options for flash sale shoppers, and the number of daily emails can be overwhelming. As a result, product and brand differentiation is especially critical to capture the attention of your busy shopper. We are seeing sites improve customer experience and site navigation and move to either broaden offerings to cast a wider net, or narrow to try to become the market leader in a particular category.
We’ll See Some Consolidation
  • But not everyone will be able to carve out their niche. As we move into 2014, we expect to see some consolidation in the sector with bigger brands buying smaller ones to remove competition, expand their offering and/or acquire a larger customer base. We saw this with TripAdvisor’s purchase of Jetsetter and later shuttering of SniqueAway, and we anticipate that other flash sale sectors and large companies will follow suit.

It is certainly an exciting time in the flash sales sector, and we’ll be watching closely as we move into the holiday season and 2014. Are these trends in line with your expectations?