Flash sales seem to be a recent retail e-commerce innovation, but the essential concept is nothing new.

Take Kmart’s old “Blue Light Special." The retailer would set off its blue police light in stores and announce with fanfare: “Attention, Kmart shoppers!” followed by the aisle and specifics of a deal lasting just 15 minutes. You could call it the grandpapa of flash sales. 

Today’s e-commerce version was pioneered by Jacques-Antoine Granjon, who co-founded Cofotex, an apparel closeout business in France that ran short-term “flash” sales offline. As e-commerce grew, Granjon in 2001 adapted the flash-sale concept to the web, calling it “Vente-Privée.” Business boomed.

It helps that in France retailers are limited to holding sales to just twice a year, leaving an opening for Vente-Privée to succeed by selling high-quality designer merchandise at significant discounts throughout the year. 

Today, Vente-Privée is huge and profitable, registering $1.5 billion in sales in 2012 and selling food, wine, and concert tickets in addition to the core business of discount clothing to 2.5 million visitors a day. The idea caught on the U.S., with startups like Amazon’s MyHabit, Gilt Groupe, Groupon’s Ideeli, fab.com, and others. 

But many flash-sale sites in the U.S. are seeing sluggish sales and have moved away from the model. Vente-Privée, which partnered with American Express in 2012 to enter the U.S., announced last month that it was winding down here by the end of the year. 

What happened?

Discounts are everywhere

One of the main problems with flash-sale sites is that the deals they offer in those breathless short amount of time are not necessarily the best deals to be found, even on the designer goods that are often the main attraction. 

While the membership-only model and the ticking-down clock create feelings of exclusivity and urgency, those are often like shiny objects distracting consumers from the fact that similar prices can be found elsewhere — at regular sales from traditional retailers — both online and in store. But consumers are wising up to that. 

Customer service and fulfillment policies are often better at other retailers

Seeing fewer hot deals on decidedly less desirable merchandise, consumers have started to realize that other aspects of dealing with flash sale sites can be annoying, expensive, or both. Free shipping policies these days are increasingly easy to come by at run-of-the-mill retailers, and many e-commerce sites, like Zappos, also offer free returns. 

Flash-sale sites tend to have small return windows, higher shipping rates, slower shipping speeds, and sometimes even restocking fees. 

The goods are not as — good

In 2006 when flash sale site Ideeli was founded, and in 2007 when Gilt Groupe and Rue La La were founded, luxury retailers and designers had copious amounts of inventory they were anxious to unload. By 2011, though, that inventory had dwindled, leaving less for shoppers to choose from. And, desperation abated, less attractive pricing. 

Social media — a lost opportunity?

While most flash-sale sites require membership (though free) to even peek at their wares, the sites are not the social whirlwinds that, say, Pinterest is. The membership means the site can email customers, based on preferences or past purchases. But the sites may have missed an opportunity to create buzz and loyalty by having customers post images or curate pages. 

Many of these companies, meanwhile, are getting negative reviews on social, public places like Facebook. 

What’s the future of flash?

It’s hard to know whether the flash-sales idea has simply had its day or whether there needs to be a certain amount of consolidation in the space. Rue La La this summer said it might soon be for sale, perhaps to Gilt, and many experts expect more such news. And while Gilt is often cited as one flash site that will stick around, it’s allowed chatter of going public for years now without pulling the trigger. 

Even Zulily, which had an impressive IPO and healthy post-IPO reports, recently reported a larger-than-expected net loss. The retailer, which has hit the magical $1 billion sales mark, is not discounting its merchandise to lure shoppers the way many retailers do (and already are) ahead of the holidays, and observers say its sales will suffer as a result. Yet discounts are the raison d'être​ of flash-sale sites.

Vanessa Friedman, writing in the “On the Runway” blog at the New York Times, says that consolidation is indeed inevitable, but that in the end, flash sales may not be the ideal model for e-commerce.

“First, despite the excitement initially generated by the combination of bargain and limited access found on flash-sale sites...consumers actually gravitate toward e-tail because of its flexibility.” she writes.

“Second, the online universe is actually like one giant street, where you only actually need one of each store," she continues. "This is why, despite the many competitors, Net-a-Porter and Yoox still hold such commanding leads in the higher end, and why I think we will see a weeding out of the flash-sale names.”