Flash in the pan: why the private sales fad crashed and burned

Flash in the pan: why the private sales fad crashed and burned

Oh, ye of little truth. The co-founder of the private sales site vente-privee, Ilan Benhaim, recently told a crowded conference hall that his site added 10k users per day last year yet, rather surprisingly, doesn't pay for traffic. Apparently, it's all word of mouth in the private sales world. It's all buzz and peer-to-peer and social. Except, clearly, it isn't.

Unless, of course, someone else paid for this ad...

Google advert for vente-privee

I'm not surprised that vente-privee advertises, but we are a little surprised that Mr Benhaim felt the need to bend the truth like that. There's no way a site like vente-privee could possibly sustain itself without calling in the keyword cavalry. Why? Because private sales / members'-only sales / secret sales / flash sales (call 'em what you will, they're all the same thing) are inherently un-social, for these three reasons:

1. For your eyes only?

There's a common ruse when it comes to private sale e-stores. It's expressed differently from site to site but, basically, it translates roughly along these hoary old lines: "Our prizes are so crrRRRazy, our suppliers will only let us show them to our members." Now, admittedly, I had an extra portion of cynicism with our cornflakes this morning, but I reckon there might be another agenda at play here. And that's fine - play that card to build your database, keep pushing those emails every day, hammer those deals until you're red in the face, but don't put the blame on your suppliers for this mysterious need for people to hand over their data.

Anyway, membership. I get why they do it. But boy does it make sharing a PITA:

"Hey, Dave - have you seen this deal for Spiderman coathangers? Check out this link."

"Hey, Boris. Quit sending me sign-up spam."

It's even worse if you try to share a members'-only page on social networks. Then this happens (I promise I'm not picking on vente-privee; I just happen, ironically, to be a member):

Vente-Privee Facebook Share

That ain't working, is it? And it fundamentally undermines any argument that private sales can and do go viral. Instead of being one-to-one-to-many, the common M.O. is one-to-many from the off. Which means that this community, this club of which you're supposed to be a "private member", looks an awful lot like a high-burn, high-churn CRM database in fluffy sheep's clothing.

2. Flash? Ah...

Scarcity is cool when it comes to retail. Scarcity can sell you a handbag for over a quarter of a million bucks; scarcity can value a cow - yep, a cow - at $1.2m. But there's no point in making a commonly-available item temporarily scarce, just to add a little spicy hype - and that's exactly what the flash sale does: "Buy now! Only available for one day! Just four units left! Etc!".

We all know this is a bit of a crock. I've lost count of the number of times I've seen the same products come up, again and again, at Brand Alley for example (by my reckoning, there's a special Diesel Day every two weeks or so) - so let's not delude ourselves into thinking that limited supply is a factor when it comes to most flash sales. I understand the retail psychology behind scarcity, I almost admire the chutzpah involved in polishing generic deals into glistening 'events', but I'm simply not falling for it. And I'm certainly not sharing the illusion with my friends.

Real limitations aren't artificially created, they're organic. Take the limited stock and time windows for Homebase's Co-buys - these aren't a spurious attempt to pull the wool over customers' eyes, they're a necessary by-product of the manner in which the products are selected. Customers request Co-buys for their favourite products. If enough people ask for the same thing, Homebase allow them to work together to secure a great deal - and, of course, the stock and window is narrow.

Because these aren't just dumb discounts for everyone, they're hand-picked, curated deals for a specific audience and their friends. They're inherently social. They're all about people coming together to achieve something. They're not handouts, they're earned rewards.

I get why you'd share that. But I'm stumped as to why you'd ever want to share a daily deal on a flash sale site. Which brings us onto...

3. Social's not about the invite, it's about the party

This happens a lot in E-commerce, especially now that the phrase 'Social-Commerce' has become terribly en vogue - people mistake the elision of social and retail to mean linking to etail via social. And, sure, that's a thing. But real Social-Commerce isn't about how you get to a thing, it's how social that thing is when you arrive. And there's nothing remotely social about flash / private / secret / members' sales. They're a product page. They're a price. They're a checkout. They're a really long delivery lead time. They're relentlessly lonely, solitary experiences.

If these sites were truly social, you'd see the impact of customers on the listings themselves. Product descriptions and imagery would be co-created and crowd-sourced (kudos to the likes of Amazon and Firebox here, whose product pages are actually a million times more social than, say, Gilt's). You'd see and feel the presence of other shoppers as you navigated around or, alternatively, sales could be extracted and embedded onto people's blogs and Tumblrs, transplanting E-commerce directly into social. And, perhaps most importantly, the prices - the single most vital part of any retail proposition - would be dynamic, flexing with traffic and conversions. The more people who buy, the better the price could become, incentivising sharing, igniting social.

But no. You get get two or three lines of text, a few hover-to-zoom pictures, some unused 'like' and 'tweet' plugins and an "add to cart" button. Snooooooze.

So, what have we learned? Well, we've learned that flash sales are often disingenuous, that they actually deter social sharing or engagement and that cynicism tastes lovely with cornflakes. And we're not alone in learning these lessons (except the last one). Back in July, Fab.com stopped sending generic flash sale emails to its database, choosing to focus instead on its inventory retail business. This month, it folded the flash division altogether. But, after a 75% decline in traffic over the past year and laying off over a third of its staff, it was clear that something had to change. Ditto the New York-based wine site Lot18 who, having sacked half their staff, have sidestepped from flash-selling to a steadier (though over-crowded) subscription-based model.

They're not alone. Every day, we're seeing another story about job losses, repositioning, waving and drowning from world of flash. To all extents, it's dead and buried. It's toast. But this rush to traditional retail paradigms (stock-holding and warehouses and giant distribution centres and immense marketing spends) isn't the answer either. The problem wasn't that flash sales were too innovative, it was that they weren't innovative enough. People aren't tired of buying, they're just tired of being sold to. People don't want to be told what to buy and when; they want to influence the offers, the timing, the deals themselves. They want a reason to share with their friends. They want control. Whoever pulls that off can look forward to a pretty flash future.

Robin Bresnark