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Opinion: the danger of sales in online retail

Jonathan Easton
Opinion: the danger of sales in online retail

Life is tough for an up-and-coming online retailer.

When you're entering into a marketplace dominated by a choice few big names it's hard to get traction. At least in the world of the high street, independent stores have a fighting chance from a human angle. Sure, the new cafe run by that man in jeans that are far too tight and a moustache that went out of fashion in 1988 might be a bit more expensive and a bit smaller with patchy Wi-Fi, but prospective customers can at least physically see it and pop in for a coffee at little to no risk.

For a new online retailer the story isn't quite so simple. Along with the difficulty of actually managing to get people to visit the site through expensive marketing campaigns, online storefronts also have to contend with the average shopper's security concerns. Is this a scam site that's going to steal my credit card? Is the site secure enough to avoid the mass data leaks that have been plaguing the news for months? There's an inherent risk shopping online at any store, let alone an upstart with little-to-no reputation. 

So, oftentimes in order to entice in new customers, they will turn to making a big deal of big deals. Quick, we've got a flash sale on that hot new gadget that everyone wants and we're selling it for £100 less than anywhere else. Once the internet catches wind of potential savings, virality is almost assured. (Though, ironically, it's in the interest of the people sharing details of the deals to keep hushed about it in order to improve their own chances of capitalising.) However, the intense excitement surrounding an upcoming deal can quickly turn into fervorous anger from disgruntled customers should the occasion be poorly handled, as was my recent experience. 

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For the sake of the site in question I shall refrain from naming it explicitly, but let's just call it Bob.

Now, Bob has gained a bit of notoriety in the short amount of time that it's been around online, specifically charting back to the launch of a hotly anticipated new gadget that it was selling at about 30 per cent off the RRP. Bob was clearly making a loss on each unit sold, but it was seemingly helping to drive up its profile and make sales across the site. The site wasn't shy about boasting about this huge deal it had upcoming, and teased the start of pre-orders across its social platforms for close to a week. And the internet was eating it up. Twitter and Facebook users were at a fever pitch, eagerly awaiting the launch of pre-orders.

Understandably Bob was overwhelmed by the interest, so set up a system where users could sign up for what was in essence a raffle in order to win the opportunity to splash out. But then when it came to the point of those emails going out, the conversation online shifted from 'I can't wait to get a hold of this shiny new gadget', to 'I bet this is a publicity stunt and they only have a handful of stock that they are selling at that price', and eventually 'I knew it, I can't believe I wasted my time'. 

It's one of the oldest tricks in the book, one which is regularly employed on Black Friday each year. Here's a shop selling a 60-inch 4K HDR flat-panel TV with all the bells and whistles included for peanuts, but on 'selected stock only' – code words for we're only selling a couple at that price.

Several months later (bringing us up to the modern day) Bob announced that it would be doing a series of timed sales on a whole host of products, many of which were hotly anticipated pre-orders at 30-40 per cent off the RRP. On each of the products there was a countdown timer to when it was going to go on sale at the lower price listed, after which point it would become a free-for-all as to who gets it. Only, from my experience, that wasn't really the case.

On more than a handful of occasions over the space of one day I sat on pages watching a countdown timer tick down to zero, clicked add to basket at exactly the moment the sale kicked in and saw a message telling me that all the stock had been snapped up. In milliseconds. And I wasn't the only one aggravated by the experience. There were others who reached out to me on Twitter to express their displeasure, some calling the sales 'fake' and one even saying that they were abandoning the site for Amazon. Nobody told me that they had seen success with any of the high profile pre-orders.

While sales are a great opportunity to get in new customers, if handled poorly (or perceived to be handled poorly) they can do an irreversable amount of damage to turn those customers – and the people they know – away from ever shopping with you again and instead driving them back to the big names. Imagine if that fancy barista gave you a latte made with sour milk. You'd never go back, and you'd make sure everyone you knew didn't go back either, and chances are that you'd be wary of the next little coffee shop you came across. It's bad for everyone. 

That's not to say that deals shouldn't be employed by smaller online retailers, far from it. The amount of buzz that Bob got when that big pre-order deal was announced was probably bigger than it would have just ticking along as another website selling things. With the internet flooded with retailers, specifically tech retailers, it's very difficult for a new one to come along and stand out from the crowd. 

Sales are a powerful tool, but they must be handled smartly and tactfully in order to make sure they don't backfire. 

Tags: Retail, Opinion

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