How fashion brands use flash sales in e-commerce

Samantha Lloyd, Clearco Marketing Director

As the weather warms and customers spend more time outdoors, consumer spending tends to shift toward new experiences and related services, but for e-commerce brands, the summer slump may be a thing of the past.

While overall retail spending tends to decline in the warmer months, e-commerce appears immune to seasonal retail declines as global online sales are expected to reach $6.3 trillion in 2024. With consumer optimism at its highest in two years, early reports predict a spending boom in summer 2024. Fashion leads the way: 78% of consumers say clothing is their top choice for summer outings.
As shoppers loosen their purse strings this summer, fashion brands are poised to take over spending by taking advantage of disruptive e-commerce sales. While there are benefits to tagging brands with limited inventory, the challenge for many fashion brands is financing their inventory before selling it.

How e-commerce fashion brands use instant offers

The fear of missing out existed long before it became known as FOMO. Spending sprees and impulse purchases peak during the warmer months, with 52% of Americans spending more in the summer. Many people admit that summer is the period when they deviate the most from their financial plans. Impulse purchases already account for 40-80% of purchases, and the summer months are a great time to have fun with unmissable sales.

These sales work even better online. In one study, researchers from the Kellogg School of Business manipulated Amazon’s inventory during a lightning-fast transaction. When supplies seemed to be dwindling, customers were more likely to pull the trigger and buy. However, researchers found that FOMO was not so much about scarcity as it was about the perceived quality of the deal. If a product sells out and the product is on sale, the potential buyer assumes the sale is good. Basically, more buyers equals a better purchase.

E-commerce sellers are taking advantage of the summer FOMO feeling by providing lightning-fast discounts on high-demand products on marketplaces like Amazon and setting aside a limited amount of inventory for sale. When shoppers see a large portion of the total inventory flying off the shelves, they assume it is a high-quality offering. The same applies to timed coupons or auctions with limited supply.

The only caveat? Don’t search for flash sale buyers on mobile devices. Another study by the Kellogg School suggests that most mobile shoppers only click “buy” on repeat purchases or familiar items. So while it’s possible to make a last-second repeat purchase, most mobile shoppers won’t be snared on a can’t-miss deal.

How fashion brand Cecil & Lou effectively forecasted inventory before selling

Limited quantities can pay off for brands, especially when the product is in high demand.

Maintaining inventory and fostering good relationships with suppliers is essential to avoid losing potential sales. E-commerce brands that plan to launch time-limited promotions or discount codes this summer should allocate some of their inventory to the promotion in advance. Flash sales run out of stock quickly, and running out of stock can cause disappointed customers to go elsewhere in search of a sale. E-commerce revenues depend on inventory that must be ordered, purchased and paid for before it can be stored, which is especially true for clothing and fashion brands.

This was the case with the e-commerce brand Cecil & Lou. Founders Ashley and Blythe McCain began auctioning their personalized children’s clothing through Facebook groups, where the bids sparked a frenzy among buyers. Limited inventory fueled initial demand, but Cecil & Lou needed larger warehouse stores when it came time to scale up.
In Cecil & Lou’s case, the transition from Facebook auctions to becoming a major e-commerce player came when its founders were able to purchase their products in advance. Using Clearco invoice financing, Cecil & Lou expanded its business to include pre-orders (on-demand custom items similar to original listings), in addition to the finished inventory already in stock. This means Cecil & Lou customers can receive their finished product within days, while pre-order demand for custom orders remains strong.

Maximize summer sales with strategic e-commerce moves

Economic indicators and consumer optimism suggest that summer 2024 could be the hallmark of sales. For e-commerce retailers looking to increase revenue this season, the answer may be as simple as purchasing fresh produce and taking advantage of can’t-miss summer deals. Either way, 2024 could be the best summer for shopping in years – especially for e-commerce fashion brands.