Online channels provide consumers with 24/7 access to a vast array of products and services that can be ordered at any time at the leisure of the online shopper. But online channels can also be used to create a sense of urgency for customers to buy immediately or lose out on wonderful bargains they will never see again. This “buy now or lose out” sense of urgency is the concept behind online “flash sales” where merchandise is offered at heavy discounts but is available only for a very short time. Flash sales seem to be especially potent for selling luxury and high fashion merchandise online that is virtually never discounted in conventional retail stores. Such online flash sales are the mainstay of online fashion retailers such as HauteLook Inc., Gilt Groupe, and RueLaLa, but this model is also spreading to the online divisions of such fashionable and famous luxury retailers as Saks Inc., Neiman Marcus Group, and Nordstrom, which recently bought Haute Look. Do you think flash sales channels are a “flash in the pan” or a viable long-term electronic channel? Why or why not?
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