The concept of flash sales is gaining traction in the travel industry. For consumers, flash sale sites are becoming increasingly popular because they’re an attractive way to access overstocked inventory, or to get introduced to new offerings.

Published: 10 Dec 2010

The concept of flash sales is gaining traction in the travel industry. For consumers, flash sale sites are becoming increasingly popular because they’re an attractive way to access overstocked inventory, or to get introduced to new offerings.

Expedia.com recently came up with exclusive 12-hour hotel flash sales initiative, “ASAP: A Sudden Amazing Price”. The agency has handpicked the properties from Expedia travellers’ most popular destinations for these exclusive sales. Expedia.com is giving travellers access to one exclusive hotel deal each weekday under its new promotion, “ASAP: A Sudden Amazing Price”. Travellers can save up to 50 percent off Expedia's everyday rates, according to the company.

Members-only travel website Jetsetter features 12-20 sales per week, with at least one new sale launching every day. The site has sold over 500 vacation experiences in 63 countries.

Last month, Jetsetter shared that in its first year of its operations, it ended up with one million members, 500 travel partners representing 63 countries, and over 100,000 room nights sold. The company says it introduced flash sales to the travel industry one year ago. Founder and CEO Drew Patterson acknowledged that there was skepticism as to whether Jetsetter members would purchase travel in a flash sale in the “early days”, but the company said several factors have resulted in such performance. The company attributed the same to the quality of travel partners, first person reviews from Jetsetter correspondents, photography, and a concierge-level member services team located in the company’s New York headquarters.

In another development, HauteLook, an online private sale website with more than 3.5 million members, has announced the launch of HauteLook Events on Facebook. In addition to introducing sale events on Facebook Pages, HauteLook says it is one of the first retailers to offer “in-stream” shopping from the News Feed. During the busy holiday season, HauteLook has created a new social commerce channel for the site’s members to browse, purchase and share their favourite brands at savings of 50-75 percent off, all without leaving Facebook.

According to Salim Mitha, COO and co-founder of Wahanda, a health, beauty and wellness community and marketplace, retailers, flash sales are just one of the ways in which companies can market themselves, and ideally they should complement other sales methods. Online flash sales sites are just the more modern equivalent of outlet malls, or the popular January sales events.

In an interview with BusinessNewsDaily, Mitha looked at flash sale sites from three perspectives:

1. From the perspective of flash sale sites: This is a useful business model because clearly there is a need to create an online marketplace equivalent of the outlet mall. Companies are looking for ways to either offload overstock inventory in a more discreet and efficient manner, or to provide introductory items to gain customer traction.
2. Customers: It’s a great way to get discounts and access brands that might otherwise be out of reach.
3. Suppliers: Flash sales are not necessarily a more “useful” business model, but one that allows suppliers to deal more efficiently with overstock and to reach new customers. There are very few retailers who rely only on flash sales, as they typically complement other sales and marketing activities. Companies are wary of relying too heavily on flash sales, which can cause them to grow dependent on discount shoppers (loyal customers who buy at full price are preferable to bargain hunters). This shift may also negatively affect brands that don’t want to be seen as excessive discounters.

Profile

More than 75 percent of Jetsetter members take three to five trips per year. Seventy-three percent of Jetsetter members are under 41. They are urban professionals with a college degree or higher and household incomes well above $100,000. As a result, the company says Jetsetter has emerged as an in-demand marketing vehicle for high-end brands seeking access to sophisticated members who are young, affluent, highly educated and well traveled. While this includes travel brands such as JetBlue and Singapore Airlines, it also includes brands such as The New York Food & Wine Festival and Focus Features.