Selling in a flash

The retail portals nowadays are thriving on the attractive discount offers which showcase an array of product ranges at substantially brought down market prices. Flash sales is one such scheme that is used profusely by e-retailers. In such a scheme, products are listed on unusually high discount. The popular online retailer, eBay India, has some great offers, Daily Deals, Grab It Deals and Deals Of The Week, at attractive prices in the same line. In addition, the portal hosts frequent promotions where consumers are rewarded with assured gifts when they purchase. Similarly, 99label.com is a private online shopping site providing great discounts on premium and luxury fashion and lifestyle brands. The portal partners with premium and lifestyle brands for short duration sales and promotions. Their sales event would typically last for five days.  Flash sales is the business proposition of 99labels, which breaks a new sale every day. Each sale lasts for a period of five days.

Why is it popular?

The biggest benefit of such a scheme is that you get the best brands at a much lesser amount. That is the core of the business. There are other advantages such as convenience of shopping 24X7 and having them delivered to your doorstep. “At 99labels.com we have been catering to small towns such as Dimapur, Rourkela, Salem, Lakua and more. Also, easy return policy and delivery at address specified by the members are also some of the advantages of shopping online”, informs Ishita Swaroop, CEO of 99labels.com. Consumers get a variety of products bought at unbelievable discounted rates with savings up to 30-70 per cent. One can choose from gadgets, gizmos, apparel, books, and movies among many other categories.

How it works

99labels.com has reached out to its target audience through tie-ups with certain relevant partners in travel, lifestyle and fashion space. It runs targeted campaigns based on the member data it has. Email/sms and social media sites, such as facebook, are key tools for marketing initiatives and help in reaching out to relevant people through various engagement promotions and pushing rich quality content on various Social Communities/ Forums/ Blogs, etc.

“We also run a referral programme where existing members can invite their friends and family to be a part of the 99labels exclusive member club. We keep tweaking the referral programme to keep the member base excited and regularly inviting friends and family. For example, we have recently incorporated the personal link option. The link can be posted anywhere and whoever becomes a member using the link would attribute to the relevant member”, comments Swaroop. Deepa Thomas, Senior Manager, Corporate Communications & Pop Culture, eBay India says, “We look at integrated marketing to inform customers about the Great Deals available. This ranges from banners on our Home Page and Direct Mailers to eBay users to partner offers to Social Media to Mass Media campaigns (across TV, Hoarding and Radio).”

The role of flash discount

The reason a flash sale works is because it creates a sense of scarcity. Swaroop explains, “If a customer does not buy the product within the 5-day sale window, they would not be able to access the same sale again. Also, there is limited stock, so one needs to purchase immediately unless it gets sold out. Sometimes we do one-day promotions on special occasions. For example, we have done buy at Rs 999 sale, an up to 90 per cent of clearance sale especially for the 9th of the month. Besides this, we also offer a gamut of products for our patrons at amazingly attractive rates on festive seasons. The current Diwali sale speaks volumes about the attractive deals that we have offered to our patrons.”

eBay introduced the eBay Daily Deals (one day, special deals in a limited quantity) in May 2010. The Daily Deals property gained tremendous traction of the consumers who come back daily to buy the next cool product. “We put in a lot of effort to choose the right products at the right prices to offer on the Daily Deal property. New buyers start their first online transaction with the Daily Deal.  Some of our popular deals have included Beanbags, Watches, Tool Kits and Cushions. We introduced an exclusive Daily Deal newsletter which 7500 consumers signed up for and we alert them daily”, reveals Thomas of eBay.

The contribution on revenue

Thomas of eBay expresses her satisfaction over the result received on flash sales. “Daily Deals are offered five days a week (Monday to Friday) and have started contributing significantly to our business metrics in the short period of time since it has been introduced”, she comments.

Tie-up with manufacturers

What sort of tie-ups these portals have with the manufacturers? “The agreement with the brands is to have their merchandise available on a short-term basis to an exclusive group of target audience and presented in an upmarket environment in line with the brand identity. The brands give us a good deal to showcase and sell the merchandise. They have multiple reasons for the same - slow movers, excess stocks, and promotional activity to create a buzz”, explains Swaroop.

“eBay India is a marketplace and we do not sell or stock products ourselves. Individual sellers are responsible for sourcing products, stocking them and shipping them to end consumers”, divulges Thomas.

Maintaining profitability

Speaking on profitability, Swaroop tells, “As we act as the intermediary, we benefit with a margin on merchandise sold. When we talk to a brand, we handpick the merchandise we want to sell on our site. We also keep the price points in mind during merchandise selection to keep our top line and bottom line in place.”  Thomas informs that listed brands on eBay can ramp up their sales through Daily Deals in two ways  -  high volume of transactions, reducing inventory holding costs as well as driving business to their other listings on eBay.