Tag Archives: Jewelry

By M. Taylor Martin
mtmartin@smu.edu

We all love the feeling of getting a great deal on a new purchase. This makes flash-sale websites seem like the ideal way to shop for bargain-hunting fashionistas.

These sales start at a specific time each day, with the time varying based on the website. During these sales, limited supplies of goods are sold on a first-come, first-serve basis.

Unlike some shopping websites like Nordstrom or Target, flash-sale sites operate via invitation only—you must be invited to view and purchase the products.

Today, countless flash-sale sites are open for business on the Web. Some popular sites based in Dallas include Gilt, Haute Look, Rue La La, ideeli and Fab.com.

So what is it about these flash-sales? Why have so many opened and how do they work?

A recent Wall Street Journal article looked into what make these websites so successful, and how much longer their success will last.

The article “Are Flash Sales still ‘Fab’ulous?” describes flash-sale sites as a means “to replicate the frenzy of designer sample sales by offering luxury products and other goods at deep discounts in sessions that can last just hours.”

Does the time crunch of scoring a deal on one of these websites lead people to impulsively purchase goods they don’t really want or need?

SMU alum and frequent online shopper Curry Heard confirms that a flash-sale purchase might not stem from any rhyme or reason.

“I think that everyone is always looking for a good deal, and flash sales are a great way to find what you want or even something you didn’t think you needed,” she says. “You might end up spending more money because of a flash sale, but I have always been happy with my purchases.”

Heard’s mindset on “spending more money” may be just what these sites need to stay in the market.

The Wall Street Journal article notes that “to flourish, flash-sale sites need an expanding membership base and a steady supply of marked-down luxury goods or other hard-to-find-items.”

So where do these sites get their customer base and, further, the luxury goods to sell?

Most flash-sale sites require an “invite” to join before you can start shopping.

For example, Heard would have to extend an invite from her Gilt membership to someone before that person could start to reap the benefits. And the sites make extending those invitations attractive to members.

Heard says, “If your friends join that you invited, sometimes you can get ‘cash back,’ which is fun.”

This “motivation” creates a domino effect, where new members invite their friends, and they invite more people and so on.

But how does a shopper decide which flash-sale sites to join?

For many, it is all about the product each flash-sale site has to offer. “I just skim the sites for brands I like,” Heard says.

The Wall Street Journal suggests that the flash-sale site Gilt has grown because its heft has attracted new brands it was unable to sell before, such as Theory and Louis Vuitton.

Thus, the most successful sites are often those that can provide a wide supply of different designer brands. Another site, HauteLook, has recently seen a decline in profits, which may be due to a lack of recognizable designer names.

When customers receive email blasts about sale merchandise, they are less likely to recognize a “good deal” if they are unfamiliar with the brand.

Bo Kyung Kim, a Cox professor, teaches SMU students about luxury brands entering the online-shopping industry. She says that brands benefit by reaching a “much broader audience” online. However, by going online, they can then face the challenges “of maintaining exclusivity.”

The ability to offer brands like Chanel and Dior will make a site more appealing because these brands aren’t available online and are more difficult to maintain. Similar to having an Olympic gold medal, if you can offer these exclusive brands, you are one of the lucky, outstanding few.

But part of the psychology behind the flash-sale phenomenon is the urgency built into the sales strategy.

Junior psychology major Mackenzie Farrell explains: “People sign onto the site looking for something to buy rather than looking for things they actually need to buy. When under time constraint, people are more likely to convince themselves of why they do need to buy something versus why they don’t.”

In other words, you may not be in the market for a new pair of 50 percent off silver, Stuart Weitzman, platform slingbacks. But if there are only two pairs left, you feel you need to get them now or you will miss out on a deal.

And that mentality will keep flash-sale sites running for at least a while longer.

Ante, S. (2012, July 19). Are flash sales still ‘fab’ulous?. The Wall Street Journal. Retrieved from http://online.wsj.com/article_email/SB10000872396390444097904 577535323312754532- lMyQjAxMTAyMDIwNTAyODU3Wj.html?mod=wsj_valetleft_e mail