Samantha Lloyd, director of marketing, Clearco
As the weather gets warmer and shoppers spend more time outdoors, consumer spending tends to shift towards new experiences and the services that go with them, but for e-commerce brands, the summer slump might be a thing of the past.
While overall retail spending tends to cool in the warmer months, e-commerce seems resilient to retail’s seasonal slumps as online sales are expected to hit $6.3 trillion worldwide in 2024. And with consumer optimism the highest it’s been in two years, early reports predict a summer 2024 spending boom. Fashion is leading the charge: 78% of consumers say clothing is their top choice for summer spend.
When shoppers loosen their purse strings this summer, fashion brands are prepared to capture their spending by using landmark e-commerce sales. Although teasing limited stock benefits brands, the challenge for many fashion labels is funding their inventory before it’s sold.
How e-commerce fashion brands leverage flash deals
The fear of missing out existed long before it was known as FOMO. Splurges and impulse purchases peak in the warmer months, and 52% of Americans spend more in the summer. Many admit that summer is when they stray most from their financial plans. Impulse buys already make up 40–80% of purchases, and summer months are a great time to have fun with can’t-miss sales.
These sales work even better online. In one study, Kellogg School of Business researchers manipulated Amazon inventory during a flash deal. When it seemed like stock was dwindling, customers were more likely to pull the trigger and buy. However, the researchers discovered FOMO wasn’t as much about scarcity as it was about the perceived quality of the deal. If a product is selling out, and the product is on sale, then the would-be buyer assumes the sale is a good one. Essentially, more buyers equate to a better buy.
E-commerce merchants take advantage of the summer FOMO feeling by running flash discounts for high-demand items on marketplaces like Amazon and devoting a limited quantity of inventory to the sale. When buyers see a high portion of the total inventory flying off the shelves, they assume it’s a quality deal. The same is true for timed coupons or auctions with limited supply.
The only caveat? Don’t look for flash sale buyers on mobile. Another study from the Kellogg School suggests most mobile buyers only hit buy for repurchases or familiar goods. So, while it might be possible to capture a last-second rebuy, most mobile shoppers can’t be caught with a can’t-miss deal.
How apparel brand Cecil & Lou effectively forecasted inventory in advance of sales
Limited quantities can pay off for brands, especially when the goods are in high demand.
Maintaining stock and supporting a good supplier relationship is essential to avoid missing out on potential sales. E-commerce brands planning to run timed promotions or discount codes this summer should allocate some stock to the promotion beforehand. Flash sales end up lightning quick without inventory, and stock-outs can lead to disappointed customers going elsewhere for sales. E-commerce revenue is driven by inventory, which needs to be ordered, procured and paid for before it can be stored, and this holds particularly true for apparel and fashion brands.
This was the case for e-commerce brand Cecil & Lou. Founders Ashley and Blythe McCain started selling their customizable children’s wear auction-style via Facebook groups, where listings set off a frenzy with buyers. Limited stock drove the initial demand, but Cecil & Lou needed larger inventory stores when it was time to scale.
For Cecil & Lou, the shift from Facebook auctions to a major e-commerce player happened when its founders could buy their inventory in advance. Using Clearco’s Invoice Funding, Cecil & Lou expanded the business to include pre-sale orders (on-demand custom items similar to the original auctions) in addition to the premade inventory already kept in stock. This means Cecil & Lou’s customers can get a ready-made product in a matter of days while demand for custom orders from the pre-sale business continues to be strong.
Maximizing summer sales with strategic e-commerce moves
Economic indicators and consumer optimism suggest summer 2024 could be a high watermark for sales. For e-commerce merchants looking to capture increased revenue this season, the answer might be as simple as picking up fresh stock and running some unmissable summer deals. In any case, 2024 may be the best summer for shopping in years — especially for e-commerce fashion brands.
Sponsored by Clearco
