Time for Flash Sales to Adapt or Die
U.S. Flash Sale Sites, Total Unique Visitors
|Retailers||April 2011 (000)||April 2012 (000)||% Change|
The owners of the business operated liquor stores in the Philadelphia area for decades, but then they began selling lots of wine, one at a time, until they were sold out on their website. The company’s well-established relationship with wineries, which was formed over the years running its retail stores, allowed the company to get the inventory it needed and sell it at prices that were about 30 percent to 70 percent off original retail prices.
Since the online business started, sales have grown between 20 percent and 50 percent each year, including in 2011, when sales grew about 50 percent. And the number of members who have joined the site also grew rapidly.
“It grew exponentially….It was very shocking,” said Elliot Arking, the company’s CEO and co-founder.
Despite the challenges that may be ahead, growth is still continuing for many flash-sale sites. Some observers expect that the companies that are growing more slowly are maturing and getting ready for their next stage of development.
According to Andrew Lipsman, vice president of industry analysis at ComScore, the early adopters were very fashion-forward women who could be counted on to share their experiences with others and bring them into the franchise.
“But there’s a much bigger market that didn’t necessarily adopt them earlier,” Lipsman said. “They’re slower to the adoption process, but as it catches on with the later adopters, there can be a more significant increase in growth.”
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