How to Hold a Flash Sale to Grow Your Ecommerce Business

Businesses often turn to flash sales to boost their revenue and create a buzz around their products or services. However, hosting flash sales comes with its unique set of challenges. From how to conduct a successful flash sale to how much inventory to block, how to handle the unusual surge of traffic - these are just some of the intricacies that businesses must carefully navigate.

In this guide, you will learn everything you should know about flash sales before holding one for your customers. It will also give you some best practices to follow and pitfalls to avoid, along with examples for inspiration.

What are flash sales?

Flash sales are time-limited promotions offering discounts or special pricing. They are designed to create a sense of urgency among potential customers and entice them into impulse buying.

These sales have become extremely popular in the ecommerce industry, especially during events like Black Friday and Cyber Monday. The limited time factor plays a significant role in driving customer engagement and prompting immediate action, leading to increased conversion rates and boosting business revenue.

Why do flash sales matter?

Flash sales offer a win-win situation for both businesses as well as customers.

For customers, flash sales prove beneficial because they allow them to buy products they have been eyeing for a long time at relatively low prices. They also create a sense of exclusivity by making the customers feel they are amongst the few who were able to grab the products within the limited time frame.

For businesses, flash sales are a great way to clear excess inventory in a short period of time. The clearance of excess stock also allows room to stock new merchandise. The enticing deals and discounts of the flash sale attract new customers and encourage existing customers to make repeat purchases.

Flash sales are great at capitalizing on the human tendency of fear of missing out (FOMO). The time-limited nature of this kind of sale builds a sense of urgency that is often reinforced through a countdown timer and highlights the limited time remaining to take advantage of the offer.

Benefits of flash sales

Flash sales are an indispensable strategy for driving ecommerce business growth and offer several benefits, including:

1. Clearing excess inventory quickly
2. Boosting sales and revenue
3. Attracting new customers and expanding customer base
4. Building brand awareness and customer engagement on social media platforms
5. Creating a sense of urgency and excitement among customers to keep them engaged for better retention

Drawbacks of flash sales

Successful flash sales build a loyal customer base, fostering long-term relationships with the customers. However, they have their downsides as well. Overusing flash sales can lead to cons like:

• Reduced profit margins
• Devaluation of products
• Loss of excitement and FOMO among customers
• High-demand products running out of stock and leading to a bad user experience
• Customers taking your brand for granted and not making a purchase unless they are given more discounts

While flash sales can be an effective strategy for increasing cash flow, finding the right balance is crucial for leveraging them effectively. If you want to run a successful flash sale for your business, here’s how you can do it.

How to run a successful flash sale

Running an effective flash sale that keeps your customers happy and helps you achieve your goals needs strategic planning. The hands-on experience of conducting a few will give you in-depth insights into what works best for your brand.

That being said, we have listed a few pointers that you can follow to maximize the effectiveness of your sale:

1. Set clear objectives

Identify specific goals for conducting the flash sale. It can be increasing revenue, clearing inventory, or reaching a wider audience. Identifying the goal of a flash sale helps define the target audience, which marketing channels to focus on, how much inventory to block for the sale, etc.

By conducting an in-depth analysis of each of these aspects, businesses and marketers can maximize the conversion rate and ensure a successful execution of the sale.

2. Select the right products

A flash sale wouldn’t be effective if the products you are offering don’t appeal to your target audience. Apart from offering variety, the flash sale items must also resonate with your customer preferences and match market trends. The trick is to have a sale broad enough to resonate with a large audience but not so broad that it doesn't appeal to anyone.

For example, Scout and Co., Kid's lifestyle boutique, hosted a weekend flash sale only for its MINI RODINI collection, making the sale highly specific for MINI RODINI lovers.

3. Offer the right discount

Flash sales are most effective when there’s a significant discount on the products. Deciding upon the right amount of discount may take some strategizing and inventory reflection on your part. Fixed percentages, Buy One Get One (BOGO), Buy Two Get One (B2G1), tiered discounts, discount coupons, and loyalty discounts are some ways you can strategize the discount schemes for running a successful flash sale.

For instance, Sephora offered a 50% off only for a couple of hours on premium products and brands to generate FOMO [See example below].

Remember, the discounts must be enticing enough to grab your customer's attention but shouldn't poke a hole in your revenue generation goal.

4. Select and manage the timing

Choosing the right date and time plays a significant role in driving customer engagement during sales. Capitalize on any special or festive days if they are just around the corner. If not, weekends work well too.

Decide on the time duration for the sale and inform your customers of the constraints well in advance. Typically, a flash sale lasting 24-48 hours works well for most businesses.

This way, your customers know what to expect and businesses can maximize the impact of sales.

For example, if you offer women-centric products than having an online flash sale a week before Mother's Day for a couple of days is a great idea. Conversely, if you have a brick and mortar store than having a flash sale on Mother's day itself can help you cash in the last-minute buyers.

5. Market your flash sale

A flash sale won’t be effective unless your customers know about it. It is imperative to promote your sale in a manner that creates hype and builds anticipation. Marketing the sale at least a week in advance is recommended to reach a broader audience and generate awareness.

Choosing the right channels to promote the flash sale is equally important. Utilize social media to spread the word. Take advantage of email marketing, SMS, website and app notifications to gain the attention of your loyal customers. You can also opt for paid promotions or influencer based cross-promotion to catch the eye of your potential target audience.

The role of inventory management in flash sales

For customers, flash sales = attractive discounts for limited-time

Since time and products are limited, managing inventory becomes critical to ensure a seamless experience for customers and maximize sales. Therefore:

• Forecasting demand for the products featured in the sale based on past sales data and market trends is essential to avoid mishaps. These numbers will help you maintain an optimal level of inventory so that you don’t over or understock the products.

• Keeping track of your inventory in real-time is also important to avoid overselling the products.

• Create a well-defined process for handling returns and ensure that the products undergo rigorous quality control checks to minimize returns.

Effective inventory management is not just about stocking. It is a combination of technology, strategic planning, and effective collaboration with suppliers and logistics partners, resulting in the success of a flash sale.

Real-life examples of successful flash sales

Here are some examples of businesses running successful flash sale campaigns:

Lenskart

Lenskart offered an unmatchable one-day BOGO deal on Cyber Monday. The sale was notified through a newsletter to its customers highlighting free shipping and a 14-day return window. The company ensured that the banner was to the point, mentioning the discount and leading the customers straight to the online sale page.

Amazon’s Prime Day Sale

Ecommerce giant Amazon holds a Prime Early Access Sale for its Prime customers every year, giving an exclusive time frame to Amazon’s loyal customer base. Apart from the many other benefits Prime customers receive, accessing the top 100 items from well-known brands early on also leads to new Prime membership enrollments for Amazon.

Sephora

Beauty and personal care brand Sephora’s Indonesia branch hit the nail on the head with a 50% off on top brands. It mentioned all the conditions in the banner of the flash sale itself, leaving no room for confusion for its customers. To cater to different customer preferences, Sephora allocated distinguished time slots for different brands, making it exclusively limited even though the sale lasted for 30 hours.

AirAsia

AirAsia, through its digital travel and lifestyle platform - Superapp, launched a three-day ‘Super Flash Sale’ that offered up to 50% discounts on flight tickets to over 3,000 destinations worldwide. This resulted in a traffic surge upwards of 18% for the brand on its app for domestic and international routes.

Grammarly

Grammarly, an AI-based writing assistant, conducted a flash sale, giving a whopping 50% discount on their premium plans. By highlighting the benefits of upgrading to premium plan in the CTA itself, Grammarly made a compelling offer its users couldn't pass.

Common challenges that lead to failed flash sales

Despite its immense benefits, flash sales can sometimes fall flat for businesses if they aren’t well-planned. Some of the common mistakes that can lead to a failed flash sale are:

Inefficient logistics: Unplanned shipping strategy and logistics not only damages brand reputation but also affects conversion rates. Ship the products without delay to avoid disappointments and reduce the chances of higher returns.

Poor inventory management: You don’t want your customers to get disappointed with ‘out-of-stock’ messages. Always forecast the demand of your products and keep track of your inventory in real-time.

Bot attacks: Bots deplete the inventory and leave genuine shoppers empty-handed. They manipulate pricing and unfairly influence flash sale outcomes. To avoid this, incorporate CAPTCHA tests like solving a math problem or picture puzzle before the checkout process.

Website crashes: The unusual surge in website traffic may cause the best websites to either slow down or crash. Make sure that your website can handle increased traffic by optimizing server capacity and using a Content Delivery Network (CDN) to distribute the load.

Best practices for conducting flash sales

Here are some tips that you should follow for running a successful flash sale:

1. Segment audiences: Consider segmenting your customer base and tailoring flash sale announcements to specific groups. This allows you to offer customized promotions based on customer preferences.

2. Communicate clearly: Clearly communicate the conditions and time duration of the flash sale to build anticipation and ensure customers are prepared and do not have any wrong expectations or ideas.

3. Offer free shipping: Including free shipping in your flash sale reduces any hesitations that customers might have about additional costs, making the overall offer more attractive.

4. Optimize for mobiles: Optimize your website and purchase process for mobile users, as majority customers prefer accessing and purchasing from the ecommerce stores through their phones.

5. Leverage social media: Leverage social media platforms like Instagram and Facebook to create buzz and engage with your audience before and during the flash sale.

6. Use pre-sale teasers: Let your audience know of the upcoming flash sale in advance by using teasers and banners on your website and app to generate excitement and anticipation among your audience.

7. Improve customer support: Ensure your customer support team is prepared for increased enquiries, sale-specific questions and assistance during and after the flash sale period.

8. Monitor website performance: Regularly monitor website performance to handle increased traffic and identify and address any technical issues promptly to make sure that the website doesn’t crash.

9. Avoid customer fatigue: Hosting flash sales too frequently leads to diminishing customer interest in the sale. To prevent this customer fatigue, strategically plan and space out flash sales to keep them exciting and anticipated.

10. Subscriber opt-in: Allow customers to opt-in or subscribe to flash sale notifications, ensuring that those who receive information are genuinely interested. This helps filter out customers who may not be interested and provides a more targeted approach.

Once they've opted-in, you can use an email service provider like Mailmodo to send them automated emails. You will even be able to create pre-built journeys for them and send them AMP-powered interactive emails for better results.

11. Post-sale engagement: After a flash sale, engage with customers through surveys or feedback forms to understand their experiences and preferences. Use this information to refine future flash sale strategies and avoid monotony.

Conclusion

Flash sales are a powerful tool for businesses to generate excitement, increase sales, clear inventory, and attract new customers. However, it is important to approach flash sales strategically to avoid common pitfalls and achieve your target. The valuable insights provided in this guide will help you conduct a flash sales successfully. They are not only great for ecommerce businesses, but are equally impactful for service-based products.

Following the best practices discussed in this guide businesses can harness the full potential of flash sales, turning time-limited promotions into a sustainable strategy for driving growth and customer engagement.