Whenever you’re dealing with overstocked items, seasonal products that didn’t sell as expected, or sluggish sales during off-peak seasons, flash sales often seem like the perfect solution.
They’re also a reliable way to hit those stubborn monthly or quarterly revenue targets. Just slap on that bold red percentage placard, and suddenly, the sales start rolling in again.
Flash sales work because they exploit two powerful psychological triggers: urgency and scarcity. These motivators make customers feel like they must act immediately, driven by fear of missing out, FOMO as the millennials and Gen Z call it.
Studies reveal that 60% of online shoppers admit to making impulse purchases because of time-sensitive deals. It’s like a one-day-only carnival; people flock to it because they know it’ll vanish tomorrow.
Fashion brand Boohoo, for instance, regularly runs flash sales offering up to 50% off for just a few hours, and these events consistently boost their traffic and sales. The countdown timer on their website acts like a ticking clock in a high-stakes game, nudging shoppers to buy before the chance slips away.
Flash sales don’t just drive quick sales—they create buzz and excitement that stick with your customers. When executed well, they feel like exclusive events, making people feel special and "in the know."
Here’s the problem—
Flash sales aren’t as effective as they used to be. A McKinsey study shows that consumer participation in flash sales has dropped by nearly 15% over the past five years.
Shoppers are becoming smarter and more cautious, no longer rushing to buy just because a deal is time-sensitive. In fact, a Klarna survey found that 40% of shoppers regret buying things during flash sales, often because of financial stress or feeling like they made a mistake.
The rest experience what is known as consumer desensitization, which occurs when shoppers become accustomed to constant promotions and discounts available year-round. This familiarity has eroded the urgency that flash sales once relied upon.
For instance, during China's mid-year "618" shopping festival in 2024, gross merchandise value fell by 7% compared to the previous year, marking the first decline in the event's history. This is a clear sign that the constant bombardment of sales has dulled their effectiveness.
Competition in the flash sales market has also intensified to unsustainable levels. More players entering the space has driven down profit margins, creating a saturated environment that is difficult to thrive in.
In France, for example, the online flash sales industry, which is valued between €2 billion and €2.2 billion, has seen its EBITDA margins drop from 8%-12% a decade ago to just 2%-6% in recent years.
This significant decline has even forced some companies into receivership, showing the fragility of the business model when profit margins are squeezed too tightly.
Adding to the challenges, consumer expectations have evolved. Today's shoppers demand fast delivery and exceptional service, standards that platforms like Amazon have cemented as the norm.
Many flash sales platforms struggle to keep up with these expectations, especially since their bulk-shipping methods often mean longer delivery times. This disconnect between what consumers expect and what these platforms deliver has led to widespread dissatisfaction, further reducing their appeal.
Moreover, the perceived value of flash sales has diminished. Discounts no longer feel exclusive or special when similar deals are available almost everywhere throughout the year.
Consumers are less likely to feel motivated by time-sensitive offers when the urgency they once evoked has lost its edge. This shift in perception weakens the very foundation that flash sales rely on to succeed.
Economic factors also play a role in this decline. Economic uncertainty and slowdowns have made consumers more cautious about their spending. Even during major sales events, shoppers are prioritizing essential purchases over discretionary items.
For instance, despite the steep discounts offered during China’s 2024 “618” shopping festival, overall consumer spending was subdued due to broader economic concerns.
Taken together, these factors paint a clear picture of why flash sales platforms are struggling. The model, once highly effective, is losing ground as consumer behavior shifts, market competition intensifies, and economic pressures mount.
So am I suggesting you ditch flash sales altogether?
Not really. I believe flash sales can still work in certain situations, but relying on them as your primary strategy might not be the best approach anymore. Consumers are evolving, and so should your marketing methods.
Successful brands are shifting their focus to building long-term customer loyalty and creating personalized shopping experiences, rather than relying solely on short-term tactics like flash sales.
Take Amazon, for example. While they have flash sale events like Prime Day, much of their success comes from their subscription-based model, Amazon Prime.
With over 200 million subscribers worldwide, Prime offers exclusive benefits like free shipping, early access to deals, and video streaming. These perks keep customers coming back, creating a loyal customer base that values the experience over a quick discount.
Another example is Nike, which has leaned heavily into personalization. Their Nike Membership program provides tailored recommendations, early access to new products, and exclusive content. This strategy creates a stronger bond with customers, making them feel valued beyond just the price tags.
The power of loyalty programs is further emphasized by brands like Starbucks. According to a Bond Brand Loyalty study, 73% of consumers are more likely to recommend a brand with a strong loyalty program.
While Starbucks isn’t an online seller, the lesson applies: giving customers reasons to stick around—like exclusive perks, rewards, or unique experiences—builds trust and keeps them engaged.
For online sellers like you, consider exploring alternatives like subscription boxes, personalized product recommendations, or exclusive early access for loyal customers. These strategies don’t just drive sales; they create meaningful connections that keep customers coming back.
For instance, beauty brand Birchbox revolutionized the industry with its subscription box model, offering customers a curated selection of beauty products tailored to their preferences. This not only encouraged repeat purchases but also built long-term brand loyalty by creating a personalized experience.
Think of it as investing in a relationship instead of a one-time fling. Shoppers want to feel valued, and offering them more than just discounts can set you apart from competitors who are still stuck in the flash-sale mindset.
For example, apparel brand ASOS engages customers with personalized product recommendations based on browsing history and purchase behavior. This approach feels thoughtful and keeps customers returning to discover items that suit their style.
So, while flash sales can still be part of your toolkit, consider diversifying your approach to include strategies that build deeper connections with your customers and ensure consistent, sustainable growth.
A mix of personalization, exclusivity, and thoughtful engagement creates a loyal customer base that values your brand far beyond a quick discount.