What's Happening to Flash Sale Sites?

When the Gilt Group took its first online orders for upscale apparel in 2007, the cofounders envisioned a kind of virtual sample sale rather than a retail website. Soon they realized that "the big and exciting change in our model was the feeling that you had to move and act really quickly on making a purchase because it was fleeting," cofounder Alexis Maybank told Adweek.

That's the appeal of the flash sale site: Quantities are limited, time is limited, so click to buy what you like when you see it, or you'll miss out on the item/size/color/price you want. Flash sale sites like Rue La La (apparel) and One Kings Lane (home furnishings and decor) specialize in marketing luxury products to members, consumers who've signed up to receive offers.

Now, with the economy poised for improvement and fewer status brands selling off excess  inventory, flash sale sites are taking a second and third look at how to attract and retain members as this type of marketing evolves. In addition to branching out beyond clothing, some sites are reevaluating local operations and pursuing global expansion.

Finer segmentation (such as on purchase occasion) is helping some flash sale sites grow. Fab.com, for example, creates limited-time pop-up shops on its site to focus on seasonal or holiday gifts and merchandise.

Will flash sale sites flourish or fizzle as competition intensifies?