Over the years, flash sales (or daily deals) have become a common strategy for online merchants to drive sales, attract new customers, and promote their brand.
When executed well, merchants can use flash sales as a competitive advantage. You can grow your business faster and increase your bottom line. When run inefficiently though, merchants can corrode their brand image and actually lose sales!
In this post, we cover the risks of running flash sales and how to avoid some of the common failures that merchants experience. With a little bit of upfront work, you could run successful flash sales on a regular basis.
What Are Flash Sales?
Flash sales or daily deals are sales that merchants run on certain products for a limited amount of time, usually for 24 to 36 hours. They became popular in the early 2000s from sites like Woot.com and Groupon.
Since then, merchants have leveraged flash sales to increase sales and attract new customers. Flash sales can be used around holiday seasons to spur sales or even during slow months to try to rev up sales. Either way, merchants have found many profitable uses for them.
To learn more about how to set up and run a flash, check out first post an Introductory Guide to Running Flash Sales, which is the first article in this two blog post series.
The Risks of Flash Sales
Setting up your flash sale in your eCommerce store and promoting it is the easy part. You select your products, pick a date and time, adjust your product prices, and then send out the details via email marketing and social media.
Once the big day comes around, merchants sit by their monitors and watch the orders roll in. It’s hard to not to get caught up in the rush of watching more and more orders come in.
Until, it all comes crashing down!
Then, you experience the flash sale meltdown.
Web developers are running around trying to get the site back up after it crashes from nonstop visits. Frustrated customers quickly call in saying they can’t place orders. Even after the sale, you deal with the aftermath of products being oversold and not having inventory to ship.
Once disaster hits, it’s hard to see why you even ran a flash sale in the first place.
Merchants must consider that flash sales come with their own set of risks. Poorly executed flash sales can lead to:
- Upset customers that lose confidence in your brand
- Lost sales from inability to process orders and deliver items on time
- Tarnish brand image as a company that can’t fulfill their promises
These are very real risks that often deter merchants from running flash sales. However, they don’t have to!
Common Failures of Flash Sales and How to Avoid Them
At nChannel, we’re a multichannel integration platform that integrates a retailer’s sales channels with their fulfillment software. Since we focus on integration, we often work with merchants who run flash sales. This list of common failures when running flash sales is the struggles we hear from our own merchants. System integration is often the solution they use to avoid them, leading them to finally execute flash sales that run smoothly and without incidents.
You are not alone. Know that merchants just like you are experiencing these problems and are fixing them.
Flash Sale Failure: Website Crash
The most common, and dreaded, flash sale failure is when your website crashes. It halts your sale to a dead stop when visitors can’t even load your site. This happens to the best of merchants, even the large brands.
Solution: First, you should try to forecast your potential flash sale traffic based on how users respond to your marketing. With these expectations, you can easily determine what adjustments you need to make to your site.
Merchants must load test their site. It comes down to having the right amount of capacity on your servers to handle the surge in traffic. It’s best to find a solution that allows you to scale your capacity just when you need to.
In some cases, you may need to consider switching eCommerce platforms, which is not as scary as it seems. Some platforms handle surges of traffic better than others. Also, it’s important to use a platform that has engineers ready to help if something goes wrong. It’ll be worth the switch if you can increase performance.
Flash Sale Failure: Overselling Inventory
You’re running deep discounts on just a few select products. You expect inventory to fly off your (virtual shelves) until it’s gone. However, sometimes merchants keep selling products even after there’s no more inventory. Then, you have to call and let customers know that you can’t ship an item they thought they bought. It’s easy to see how this leads to frustration and mistrust with your brand.
Solution: Real-time inventory updates are an absolute must for merchants running flash sales. This requires merchants to sync inventory levels between their fulfillment software and eCommerce systems as orders are placed (not every 15 minutes or hour). This ensures that the second you sell your last product, inventory quantities will reflect “out of stock” on your website. You can even set rules that might display an item as “out-of-stock” once you reach a desired safeguard threshold, like 5 to 10 items still left.
Real-time inventory syncing prevents overselling and is made possible through integration. See how nChannel’s real-time inventory management solution works.
Flash Sale Failure: Lost Orders and Order Processing Delays
Most merchants use some type of backend solution to process their orders such as an ERP or order management system. Just like your eCommerce platform, backend systems can get flooded with requests that can lead to the system crashing or locking up. This can lead to you losing sales orders! You won’t be able to process orders or retrieve that information.
Solution: The best way to solve this problem is through integration. This explanation might be technical, but it’s the most valuable information on this page.
When you get over 1,000 orders in just 10-15 minutes during a sale, some ERP systems cannot handle that many requests. It will either substantially slow down or lock up, which prevents you from processing orders.
However, integration platforms like nChannel know the limits of backend systems like ERPs. As orders come in, nChannel throttles the API so we can queue up the orders from your eCommerce store and insert them into your backend system, as that system’s limit allows. This prevents the system from being flooded with requests and crashing. Even if it does crash, nChannel holds the orders records so they can process once the system is back online.
This ensures that merchants can smoothly process orders throughout the entire sale and prohibit the lost of orders.
Flash Sale Failure: Shipping Delays
After a flash sale is over, customers expect quick and accurate delivery times. Most customers don’t want to wait for their highly anticipated items for several weeks or find out that the wrong item shipped. Before running a flash sale, merchants must have their shipping processes in place.
Solution: There are a few areas to look at when it comes to shipping. First, merchants should sync their shipping tracking and other information from your backend system to your eCommerce platform. This allows you to avoid any inaccurate addresses for customers. You’ll also be able to provide customers with accurate order status and total visibility of their orders.
Second, merchants should ensure that they optimize their fulfillment processes. Intelligent order routing through workflows should streamline your processing and fulfillment. This ensures you can provide competitive shipping rates and delivery times.
Flash Sale Failure: Flash Sale Fatigue
In this survey, 52% of respondents say they feel overwhelmed by the number of “bargain-boasting email” they receive on a daily basis. Flash sale fatigue is real and can lead to consumers ignoring your sales. No matter how ready you are to sell, consumers just don’t care.
Solution: Be mindful of how often you run sales and how attractive the deals are. If you run a sale every other week that’s only 10% off items that don’t sell well, consumers are going to ignore you. Your sales should be special and be worth your customers’ time and money.
Flash sales are a great strategy to drive sales and acquire new customers, but they do have their own set of risks. If you’re thinking about running flash sales (or already have and failed), you need the right tools to execute them successfully.
In many cases, multichannel integration of your eCommerce platform and backend system like an ERP is the solution you need. To see how nChannel’s multichannel integration platform can help you run flash sales more smoothly and prevent lost sales, fill out the form below!