Books, music, software, and consumer electronics have been the mainstay of ecommerce transactions since online sales began. Apparel is now the fastest-growing segment — by growth percentage — in ecommerce thanks to the greater sophistication of shopping tools, free shipping, and more flexible return policies. Shoppers are now more confident about getting the right color and the correct fit, and if they don't, returns are easy, if not free.
Research firm eMarketer estimates that apparel and accessories will grow by 20 percent, to $40.9 billion this year, up from $34.2 billion in 2011. In comparison, computers and consumer electronics will increase by 16 percent, to $48.6 billion in 2012.
The flash sale phenomenon has certainly created a good deal of excitement in the apparel category and contributed to an increase in purchasing. Online impulse buying is particularly attractive when discounts reach to 50 percent, as they often do. Plus you can watch the clock count down as shoppers compete for the limited number of items available. Flash sales are much more popular among women than men. Females often arrange their day around flash sale starting times.
Flash sale specialist Gilt Groupe, a purveyor of luxury goods for men, women, and children, is expected to file an IPO later this year or early in 2013. It may garner as much attention as Facebook's IPO. It has more than 5 million members and ships more than 10,000 items a day. Its daily flash sales for women are legendary and its market value is pegged at more than $1 billion, second only to Amazon among ecommerce companies that stock inventory.
Even Amazon has entered the luxury apparel fray. Its MyHabit site, established in May 2011, is a curated designer flash sale venue that competes directly with Gilt Groupe. MyHabit features models wearing clothes in impressively lifelike animated videos. While Gilt charges for shipping to the customer and for returns, MyHabit ships for free within the United States. Returned items incur a $4.95 restocking fee.
With the economy improving, some luxury apparel sites are augmenting their flash sales with full-priced clothing, because fewer designer clothes are available at discounts. But flash sales are not limited to high-end clothing. Forever 21 caters to teenage girls and young women with clothes and shoes that range in price from $5 to $30. And Make Me Chic does not offer flash sales but has a constantly changing array of items for young women, most under $40. Those who sign up as members receive codes for sale items via email.