Flash sales and scarcity are in play as brands seek to optimize inventory and profits.
Early signs are already there, such as the Tiffany & Co. tease for its forthcoming “limited series” take on the classic FENDI Baguette bag. In other words, follow those email alerts closely or risk not getting yours.
That’s essentially how the scarcity principle works, and this is hardly news to the Amazons of the world whose product listings often include quantity still in stock messaging.
In a year starting with more uncertainty than the three years of the COVID pandemic, brands are likely to use scarcity — artificial or actual — to move more merchandise in 2023.
We explored this in the study “Product Drops: Retail’s New Conversion Play,” a PYMNTS and Scalefast collaboration, in which 43% of consumers said they had participated in a flash sale, product drop or private sale in the month before being surveyed.
A Shopify blog post notes that “Product drops, when a company releases limited edition products for a short period of time, have become common for sneaker and fashion brands,” adding that “During its first drop, Kim Kardashian’s
Fendi X SKIMS collaboration made over $1 million in one minute. Many of the collection’s most expensive pieces, such as Kim’s leather mid-dress, sold out within seconds.”
The strategy could prove more useful than ever at a time when consumers are tapped out or concerned about nonessential spending. In such a climate, scarcity and urgency are useful tools.
According to Product Drops: Retail’s New Conversion Play, flash sales are the most popular form, noting that “Buying products at a good price is particularly important to consumers when they are making purchases through flash sales: 74% of consumers cite it as a reason to participate in the sale.”
Many Flavors of FOMO Selling
Amazon has a flash sale search feature in addition to its Today’s Deals category for deeply discounted items, and an even more urgent Amazon Warehouse Flash Sale page festooned with “limited time” deals on everything from electronics to home furnishings.
eCommerce marketplaces Hypebeast for men’s fashion and sister site Hypebae for women’s fashion are known for their use of celebrity product drops and flash sales. In December, the company announced it is expanding into the Latin American market.
In a press release, it said, “the Hypebeast Latin America Instagram account is backed by a dedicated team focused on uncovering future emerging cultural trends, as well as highly curated Latin American specific topics, such as interviews and spotlights on local artists and fashion brands.”
The concept is hot in sectors where pricing and product are perceived as perishable. In a Tuesday (Jan. 3) blog post, travel site Thrifty Traveler said, “For months, we’ve been sending our Thrifty Traveler Premium members amazing flight deals for a cheap trip somewhere this year. And with flights now bookable through November, we’re quadrupling down with even better cheap flights for 2023,” adding that “Thrifty Traveler Premium members got first crack at all of these deals, and many are gone now.”
Online fashion marketplace YOOX Net-a-Porter launched its version of the private sale in 2022, dubbed “Secret Room.”
Glossy reported, “While secret sales are common in luxury, brands, and retailers are taking more care to ensure they’re high-end shopping experiences featuring quality services that enforce brand equity — even while discounting. For its part, the Yoox store will feature reserved shopping appointments, and pre-allocated products to ensure each appointment time has a robust offering, experienced luxury staff, and quick checkouts.”
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