(Flash) Sales have become a rage in online world which is evident with the hype created with the Flipkart’s “Big Billion Day” sale. Practically it is no different from offline retail, however the implication of such sales are different in online world. The blog summarize some of the learnings which can be used as checklist by the online retailer while creating such sales.
Flash Sales (or call it a Deal-of-the-Day) usually refers to the business model in e-commerce where a website (portal) offers a single product sales to the customer for 24 to 36 hours. The customer can either register for the sale or it could be offered to selected customer by invitation. The concept started picking up with the launch of Woot.com in 2004. In United States, a marketing campaign, termed as “Cyber Monday” for the Monday after Thanksgiving was created by marketing companies to persuade people to shop online. The term made its debut on November 28, 2005, in a Shop.org press release entitled "'Cyber Monday” quickly becoming one of the Biggest Online Shopping Days of the Year". In India, the push to replicate Cyber Monday was done with launch of Great Online Shopping Festival in December 2012 by Google India in partnership with e-commerce companies including Flipkart, HomeShop18, Snapdeal, Indiatimes shopping and Makemytrip. Seeing is believing (The Big Billion Day) The e-commerce milestones in India will remember the date 6/10. On 6th October 2014, India’s biggest e-retail firm Flipkart vowed to offer the biggest sale ever to billion people of country with “The Big Billion Day” sale. It was also promoted heavily by Flipkart. The sale concurred with the festive season of Diwali, during which the consumer spending usually increases in country. On the D-Day as per Flipkart it took just 10 hours for them to hit $100 million in gross merchandise value (or GMV, a term used in online retailing to indicate a total sales value for merchandise sold through a particular marketplace over a certain time frame). With such a heavy discounts offered the net value may be low, however the site witnessed more than 1 billion hits and its traffic exceeded that of Facebook in India. The Big Billion Day also ended up with lot of disgruntled (potential) customer who retorted to social media to vent out their anger against the company. With limited capacity to deliver, many of the customer (mostly not hands-on in terms of technology) went empty handed while competition wooed some of them with their offers. As per the report by social media service provider Airwoot, 78% of the customer expressed their dis-satisfaction with Flipkart on the Big Billon Day Sale. The apology mail from the founders (Binny Bansal and Sachin Bansal) was a timely move to pacify the wrath of the customer especially for a company which topped the overall brand index in a survey of online purchase behaviour by Nielsen in Jun-Jul 2014. The overall impact on brand perception due to BBD sales whether positive or negative will only be known in due course of time. In a traditional retail sale the customer physically sees the stock available on sale. With the visibility of merchandise in terms of quantity and quantity along with the discounts available, a customer is able to gauge the opportunity loss in case he is not able to get his hands on the offering in the sale. In online market place with virtual quantity and virtual competition in terms of customer looking to buy same merchandise may lead to air of ambiguity. The customer is not able to make whether the demand of the product was really so high or it was just a marketing gimmick. These perceptions build by the customer impact the relationship of the customer with the online brand in the long term. In e-space market, the competition is also fierce. As evident in case of BBD Sale, the competition reacted with above-the-line communication even before the sale with their ambush marketing moves. It even lured them during and post the sale with their offering aggressively. The fact of life is that the competition is not so rosy even in offline brick-and-mortar space. To sum up, the following are key learning for online retail world based on current flash sales trend and BBD episode: · Creation of spike whether seasonal or crafted require big budgets. So plan for all possible scenarios. · Create campaign objective for flash sales and monitor and measure it on real time basis. · Brand Promise as per the promotional campaigns in terms of deals and discount need to be fulfilled for all visitor especially registered regular online customers. · Maintain transparency in virtual space be it response to customer complaints or offering them a good deal. · Online Reputation Management (ORM) is critical for e-space ventures. · An ideal combination of offline-online marketplace can do wonders as one can harp on the unique strength of each. · Differentiate a sales from a lottery in the mind of customer to create long-term business. So quantity and other terms and condition should be made available to customers. (c) Sunil Singh Rana
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Sergey Mironov, Dy. CEO, MTS India
The below are the key learnings which I gathered from an open house session during his visit to circle. It highlight the key area of focus for managing operations including shareholder returns: Key Focus Area: To ensure better performance, the Business Head of an organisation need to review the 4P’s of business time over time and ensure that they remain competent in these 4P’s. The 4P are: Products, Placement, Promotion and People. Product need to be competitive and should fulfil the explicit and implicit needs of customers while the Placement should be adequate to ensure wider availability and thus better distribution. Promotion are required to ensure that the product offering and the benefits and communicated to the customer and finally People who make difference with their skills and performance. Apart from reviewing them one need to strive to improve the organisation’s edge in these 4P’s. A proper balance and growth of these 4P’s on various parameters improve the organisations competitive edge and performance in a longer term Shareholders Returns: Movement towards being OIBDA positive is a critical journey for any organisation. An organisation becomes self-sustained to generate revenues to meet their operational expenses. It is important to consider our shareholders as our parents. The parent spends money on their kids to nourish and groom them to grow and become self-sustained and independent. It is the duty of the child to return the money and take care of the parents in times to come. A template with detailed indicators to measure and monitor organisations’ development on these 4P’s and returns can be created. The incremental growth of these parameters in long-term can create a bigger impact for any organisation. |
A working professional with 19+ years of experience in Sales, Marketing, Strategy and Operations, I am an avid reader and quizzer.
My areas of interest are Business Strategy, Marketing, Customer Management and Digital Media. With my blogger mission as "Learn, Think and Share", I would love to share my thoughts on business strategy, leadership, management, marketing and business quizzing. If my blogs help you out in your professional growth or my quizzes provides a perfect match of infotainment, then I will consider my little attempt as rewarding. - Sunil Singh Rana ABOUT AUTHORArchives
December 2018
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