With summer sales just around the corner, many retailers will be planning how to make the most of this sales period and ultimately, deliver meaningful revenue.
Figures from April show that monthly spending was 10% higher when compared to pre-pandemic levels and sales volumes increased 9.2% month on month – with a huge 70% increase in clothing sales. So, with consumer spend already on the rise, 2021 summer sales have the potential to drive more revenue than ever before. But in order for businesses to capitalise on this opportunity, a little planning is required.
What is a flash sale?
Simply put, a flash sale is a discount or promotion offered for a short period of time or on a limited number of products. They can be a great tool for businesses to yield a spike in sales, as they can create a sense of urgency among shoppers, encouraging impulse buying.
As is the case with any sale, there are two potential downfalls – flash sales can erode margins and attract bargain hunters who have no intention of becoming a loyal customer. But, if successful, they can promote loyalty, increase revenue and brand awareness, and acquire new customers. So, to help businesses make the most of their flash sales, please see below our 5 best practice steps to planning an effective flash sale.
5 steps to a successful flash sale campaign
- Define your objectives
- Select your target market
- Choose the right timings
- Gauge demand
- Leverage multichannel communication
1. Define your objectives
By identifying objectives in the first instance, brands can ensure sales remain focused and select appropriate metrics prior to sale launch. For example, if the main objective is to acquire new customers, businesses could focus efforts on consumers who have previously expressed an interest but not converted, or target individuals who currently follow a competitor with similar products. By tracking new customers’ flash sale purchases, brands can then determine whether they are able to upsell or cross-sell, driving value beyond the initial sale purchase.
Furthermore, although metrics regarding overall revenue and uplift in comparison to a non-sale day are useful, it’s important brands also collate metrics which give some indication of longer term sale success. For this, Shopify recommends that brands calculate Customer Lifetime Value (CLTV).
CLTV = Customer value x Average customer lifespan
Which translates to:
Customer value = Average purchase value x Average number of purchases
Companies can then calculate the CLTV for customers acquired via a flash sale.
Customer lifetime value = Single sale average x Average repeat transactions x Average retention period
By calculating the CLTV, brands can gauge the quality of their flash sale customers and use this knowledge to make improvements to sales and customer targeting in the future.
2. Select target market
As is the case with any sale period, for consumers, it can be a frenzy of sale messages. For a customer to make a purchase, businesses need to demonstrate the value of their service or product, while giving them a reason to select their brand over that of a competitor.
As Greg Merell, Managing Partner of Simplistic states – “as a brand, your job is to know your customer, leverage that expertise to provide them with a great offer on something they want at a time that’s appropriate to them.”
Though a blanket discount may be tempting, by taking the time to consider the target market, businesses can create more targeted lists to ensure campaign messages are relevant and well received.
3. Choose the right timings
When it comes to scheduling a flash sale, there’s no perfect time that reliably works for all retailers. Instead, the schedule will be dependent on your business’s product and target customer.
Prior to sale launch, it’s worthwhile looking into which days and times typically receive the largest influx of sales and communication engagement, and using this data to guide your timing decisions.
The same is also true when it comes to deciding how long your flash sale should run for. Data from Shopify shows that 77% of flash sales are one week or less and 26% are one day or less. So brands may find that shorter sales generate higher returns.
4. Gauge demand
Gauging demand is critical to ensure that you’re promoting the right product, at the right time, to the right people, and that you can support a high number of purchases in a short space of time. Businesses can do this in a number of ways; even simply asking for customer feedback can prove very effective. For example, brands could ask customers which products they’d like to see included in upcoming sales. Alternatively, businesses can also run mini-flash sales to test how an offer may work on a larger scale. By collating this data businesses are able to better operationally prepare. For instance, brands can ensure products which proved popular in the mini-flash sales or customer feedback surveys, are well stocked far in advance.
5. Leverage multichannel communication
Arguably the most important part of any sale, is communicating the various discounts or offers to consumers. A multichannel communication strategy is key for businesses wanting to make an impact and really engage with their customers and leads.
While email has often been a popular choice for retailers, with an estimated 48.7 million consumers opted into SMS marketing and 54% of consumers wanting to receive promotions via SMS, text messaging could prove a valuable communication channel for brands.
Email has the benefit of being able to provide a lot of information on your sale, but it’s easy to ignore, and gets lost in a sea of promotional activity. SMS is the perfect way to drive people to your store, website, or even to check their email, to ensure you get their attention.
Particularly as only 11% of businesses currently send offers via SMS, and the channel benefits from a 97% open rate, it could really help businesses cut through the noise.
If you’d like any help preparing your SMS campaigns ready for summer sales, or flash sales in the future, please contact one of our expert team at [email protected].