A flash sale is a discount or promotion offered by an ecommerce store for a short period of time. The quantity is limited, which often means the discounts are higher or more significant than run-of-the-mill promotions. The time limit and limited availability entice consumers to buy on the spot - aka impulse buying.
While any ecommerce store can use flash sales as a valuable tactic, some companies' entire business models leverage flash sales. Zulily, for example, is a flash sales site that targets busy moms, offering items like baby clothes and baby accessories at significantly reduced prices for a limited period of time.
Flash sales can be an extremely effective method for quickly unloading excess inventory, turning a negative into a positive in a matter of hours. While it's ideal to sell products on a consistent basis, planning your inventory to perfectly match upcoming customer needs is nearly impossible. In fact, Reuters reported during the 2012 holiday shopping season that ecommerce retailers that utilized flash sales grew twice as fast as online retailers that did not use this tactic.
Flash sales are also a great way to sell items that are either out of season or have been sitting in catalogs for some time. This leads to lower operating and inventory costs on the back end: if a company can sell products that have been sitting in a warehouse for a short or even long period of time, they make room for newer inventory that's selling quickly.
Lastly, flash sales present a great opportunity to increase brand awareness. Flash sales can put your store on the radar of deal sites and blogs all over the Web, vastly expanding your visibility in the process. While flash sales can be nothing more than a short-term stimulus, they offer the chance to tell customers about your other products and value proposition.
When executed properly, ecommerce sites can leverage the benefits of running a flash sale. There are a handful of guardrails business owners should keep in mind: