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How Pinterest Is Helping Flash Sale Sites Stay Relevant

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Gilt's Pinterest page

Yesterday, the New York Times published an article analyzing the state of the flash sale retail niche. Basically, they say more and more of them are popping up (the paper estimates there are currently 90 accessible to US customers); they're doing a booming business (over the last five years, the flash-sales industry has had average revenue growth of almost 50% a year); and despite all that, customers are getting kind of bored with them.

The article quotes an industry analyst with IBISWorld who predicts a significant slowdown in flash sale growth. With the novelty and excitement of the concept wearing off for customers, she projected revenue growth will be cut in half next year, and says they sites "are going to have to appeal to customers with other products.”

Now, none of that is breaking news: Gilt has been pretty open about their shift in business model from flash-sale site to online luxury purveyor, for example. And Fab.com's success (which the article cites as an example of the importance of online curation) has already been well documented. But there were also a couple of interesting tidbits about how flash sale sites are using social media that caught our eye.

Apparently, sites like Pinterest and The Fancy are playing a big role in how customers discover designers. According to the Times, more than 50% of the five million or so members that Fab has attracted in the last year have come from “social sharing”.

Sale sites are then capitalizing on these referrals by offering users even better deals and bonuses when they use networking sites like Pinterest, Svpply, and Twitter. The Times cites a promotion Gilt did in which they offered extra savings to members willing to “re-pin” Gilt Kids products displayed on its Pinterest page.

In our opinion, that actually says more about Pinterest's power than it does about flash sales. If Pinterest is proving it has the power to convert an "inspiration" moment to a retail transaction, you can expect to see a lot more brand-Pinterest interaction in the future.
· Selling More Than a Flashy Deal [NYT]
· What This $1400 Brian Atwood Handbag Means for Gilt [Racked]
· Game On: The Fancy Trumps Pinterest With New "Buy Now" Button [Racked]