If you’ve been paying attention to ecommerce trends over the last 12 months, there’s a good chance you’ve taken a look at websites such as Groupon. It’s the ecommerce organization that Forbes magazine dubbed “the fastest growing company ever” in the cover story of their August 2010 edition.
Similar sites have been cropping up across the globe. Another interesting model is that of Australian company, CatchOfTheDay.com. It sells certain discounted items for 24 hours, and replaces them daily with more deals.
SitePoint have even got in on the action with 24 daily deals leading up to Christmas in the SitePoint Christmas Countdown. Other ecommerce sellers have been doing the time-honored coupon code, which is valid for a relatively short time.
The reason these models work so well, is that ecommerce, unlike traditional bricks and mortar stores, has often suffered from an abundance of convenience. You can visit an online store and buy the product any time, so there’s no motivation to get in quick. There are no queues outside stores, nor mass media coverage of heavily discounted sales like the larger department stores.
These time-based sales change that landscape, giving consumers a limited time to place their orders. They create a sense of excitement and urgency, similar to leading auction websites such as eBay, which is why they do so well.
Another interesting catch with many of these sites is that a minimum amount of orders need to be placed before the sale will occur. This enables the product distributor or service provider to calculate the profits and costs of running the sale well before it actually starts.
It also promotes the social media element of telling your friends. If you’re keen on a bargain, but know that many others need to express an interest in it before the deal goes ahead, you’re motivated to hop onto Facebook or Twitter—or resort to emailing—to tell all your contacts about the deal.
Look at your own business model. Is there a way you could offer a discounted product or service if people buy within a certain time period? Make the period shorter, rather than longer, and encourage visitors to utilize social media to spread the word.
Good luck with it, and here’s hoping 2011 means more sales and profit for you and your business.
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As Director of Bam Creative, and Chairperson of the Australian Web Industry Association, Miles spends his time managing his business or speaking about managing businesses. Recently awarded as one of the top Western Australian entrepreneurs under 40 years old, Miles can also be found writing at Miles' Blog.