By Rieva Lesonsky
The signs are there: Consumer spending is rising, more lenders are making small business loans, and seed capital is starting to flow more to startups. The economy may be slowly making a comeback, but consumers are still looking for the best deal or bargain they can find. Deal of the day sites like Groupon and LivingSocial are familiar to consumers; now a new type of website has emerged to offer discount prices for luxury customers.
Flash sales sites are members-only websites offering short-term deals on luxury items like high-end home décor, clothing, jewelry, electronics, cars and travel, to name a few. Consumers sign up to receive daily emails directly to their inbox touting these goods at a significant discount. It’s a way for consumers to buy products from big-name designers, sometimes by as much as 70 percent off retail prices.
Consumers are warned to act fast, because once items are sold out, that’s it. The limited-time nature of these deals creates urgency, prompting the consumer to take advantage of the deal before it’s too late. Flash sales sites can be specific, such as home décor sites One Kings Lane and Joss & Main, or cover many kinds of products, such as Fab.com and Gilt.com. The big guys are even getting into the flash sales game. Ebay has launched its own version of flash sales with Fashion Vault, and Amazon has My Habit.
Although the concept started with high-ticket items, the flash sales concept is broadening and anyone can get in the game. Established retailers, who have the advantage of an existing customer base, access to inventory and expertise in their category, can quickly set up a flash sales component in their businesses. And newcomers can introduce the concept from the outset to create buzz. Plus, since flash sales sites are “members only,” it’s a great way for a small business owner to collect email addresses of interested consumers. Flash sales sites create a sense of community among shoppers, and consumers want to share (i.e., brag about) their purchases with their friends, which creates a shopping frenzy and demand for certain products.
Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at firstname.lastname@example.org, follow her on Google+ and Twitter.com/Rieva and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports