Rafi Mohammed

Flash Sales: The Key to Selling in a Recessionary Economy?

Posted on July 18th, 2011 (0 Comments)

One of the aspects of consulting that I most enjoy is learning more about my favorite topic – pricing – from clients who have deep experience in the field interacting with customers. While I am not a fan of discounts, I have been thinking about the following words of wisdom that a client imparted a year ago: “Rafi, discounts are the impetus to make people change.” I believe he’s right; how many times have you been thinking about making a change (a new service, better product, etc.), and the tipping point to taking the initiative to change was a price discount? Happens to me all of the time – I know I should make a change but finally do so when prodded by a discount.

Sidebar: while many of the business literati snub their noses at the book Who Moved My Cheese, I think this 2 hour read offers brilliant insights on how hard it is for people to make change in both their personal and professional lives. A high recommend.  

I occasionally get emails offering flash sales; the latest email coming from Dockers clothing pitching a one day 4 hour sale (from 12PM – 4PM) offering 40% off everything on their site and free shipping. Note: I received the email at 3 AM on the morning of the sale. Why the limited sale time (4 hours)? Why the short notice (9 hours)?

David Leonhardt has an interesting article in yesterday’s New York Times appropriately titled, “We’re Spent.” June retail sales were sluggish, consumer confidence is ebbing, and unemployment is on the uptick. In other words, most consumers are on the purchasing sidelines: interested in items - but due to the uncertainty of the economy – reticent to make the purchase. Sound familiar?

So how do you get consumers off the sidelines? Flash sales! The short notice and duration encourages people to make a decision: “this offer is truly only good for 4 hours.” Requiring a coupon code also keeps people visiting the site - without knowledge of the sale - paying full price.

With consumers scrutinizing (and agonizing over) every purchase in today’s economy, flash sales can be the kryptonite to open their wallets. Note to Dockers: a 40% discount seems high.

Thanks to flash sales, my business casual wardrobe is now fully replenished.

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