Online shoppers reap the benefits of flash sale and group deals

It’s no secret that everyone loves a good bargain, no matter who they are or what their income level is. This simple insight is the key to the flash sales and group deals which are becoming increasingly popular in South Africa. With discounts of up to 70% for those in the know, it’s no surprise that the sector is gaining traction.

SaleWine.co.za is one such site. It uses flash sales to sell its wines for up to 70% off the retail price and has attracted over 7 000 shoppers who eagerly await its new wine emails.

“Last week, I bought two cases of 1992 Cabernet Sauvignon for R145 per bottle, which is 42% cheaper than the retail price of R250. The fact that I only have 72 hours to buy the wine makes the prospect of purchasing that deal all the more exciting,” says asset manager Andrew Sawyer.

Flash sale sites sell selected products for a limited period. In this particular case, 72 hours or until the wine is sold out.

“We actually sold out of the 1992 Cabernet Sauvignon in less than 24 hours,” says AJ Ray, owner of SaleWine.co.za. “I think the success of a flash sale site is firmly based on how well you can read your consumers and your ability to find exclusive deals that are somewhat scarce. It takes time, and a lot of tasting to find wines that are good enough and special enough to offer our shoppers.”

The business model seems to be working for the wine e-tailer, whose sales have doubled every month since it launched in the third quarter of 2010. Its highest discount was 69% and its average is 49% off retail prices.

The phenomenon of collective consumer action has caught on in South Africa. Twangoo, a local group-selling website, was not even a year old when it was bought by global group-selling giant Groupon. This purchase came just months after Groupon declined a US$6-billion buyout bid from Google.

These sites are successful because they sell anything from spa treatments to luxury lodges for around 50% off the retail price.

These sites visit hotels, restaurants, spas, and other retailers and offer them a deal of 50 customers or more. The catch is that the retailer has to discount the price by around 50% or more.

The retailer wins because these sites bring consumer volume and the consumer wins because they get a once-off, spectacular deal.

Unlike in-store sales, deep online discounts for a limited time do not hurt the integrity or reputation of a brand because they are sold for such a small period. This sales strategy works well, especially in an economic downturn.

Flash sale and group deal sites work for well-known brands that want to introduce new clients to a brand, as well as lesser-known brands that need to introduce products and create a loyal following of customers.

What are flash sales?

Flash sales are exactly what their name suggests, sales in a flash. These sorts of sites sell a product at up to 70% off the retail price, but only for a very limited amount of hours or until a deal is sold out. These sites have become the darlings of retailers, because they introduce new people to a brand who will, hopefully visit a bricks and mortar retailer to buy the product at the regular price in the future.

What are group deals?

Customers find deals that they like on the sites, sign up, persuade others to do so, then get 50% or more discounts on restaurants, spas, hair dressers, gym, concerts and other products and services. The sites vary in their business models: Some require a certain number of takers for them to give the deal, while others reward shoppers based on how many others they lure. Businesses can get a short-term boost that can to lead to long-term customers.

Popular South African flash sale and group deal sites:

Twangoo.co.za

Category: Group deal

Discount: 50% and more

Twangoo.co.za and its sister site MyCityDeal.co.za offer half price (sometimes more) deals on spa visits, hotels, restaurants, dance classes, magazine subscriptions and pretty much everything else!

How will you know about deals? Enter your email at www.twangoo.co.za or www.mycitydeal.co.za – the site will send you a daily email to alert you to deals.

Today’s deal: Ageless tan treatment for R160 (53% off)

SaleWine.co.za

Category: Flash sales of wine

Discount: Up to 70%

Sells special South African wines at up to 70% off the retail price, but only for 72 hours or until the deal is sold out. Delivery in metropolitan areas of Johannesburg, Durban and Cape Town is free with a purchase of 12 bottles or more.

How will you know about deals? Sign up to receive emails at www.salewine.co.za

Today’s deal: Oak Valley Sauvignon Blanc at R56 per bottle (40% off)

Wicount.co.za

Category: Group deal

Discount: 50% and more

Wicount is similar to Twangoo and MyCityDeal, it also offers a wide variety of products and discounts on anything from concerts to meals.

How will you know about deals? Enter your email at www.wicount.co.za, the site will send you a daily email to alert you to deals.

Today’s deal: R60 for a meal at Deli Su Casa (40% off)

Onedayonly.co.za

Category: Flash sale

Discount: varies

One Day Only is owned by Ronnie Apteker, founder of Internet Solutions (IS) and online retailer Wantitall.co.za. The site offers one product every 24 hours and sometimes extends the sale period over weekends.

How will you know about deals? Sign up to receive daily emails at www.onedayonly.co.za

Today’s deal: R699 for a Weber charcoal braai (35% off).