Creative Strategies to Help You Improve Your Clearance Sale
January is a slow month for most retail stores. On top of the holiday bill hangover consumers are experiencing, bad weather or resolutions to stop spending money will often keep shoppers away.
But if those unsold products are gathering dust on your shelves or taking up space in your stockroom, they’re not bringing in profits for your business. It is time for a clearance sale!
The word “clearance” is overused these days when many retail chains seem to offer weekly clearance deals. However, when clearance is done sparingly, it can be a highly effective marketing strategy. Clearance can attract not only your regular customers but bargain-hunters who might not otherwise stop into your store.
Sale! Clearance! BOGO! Half off! These words are magical to the customer and should be to the retailer as well, as long as you plan everything outright.
Here is how to make your clearance sale a success.
1. Set the right time. Quarterly seasonal clearance makes sense for most retail businesses. You want to sell products at the tail end of the season, while they are more attractive to customers. (For example, it is much easier to move parkas in January than in April.) If your products are not particularly seasonal, a clearance every six months may work. Just do not let too much-unsold stock build-up.
2. the right wares. Using your point-of-sale/inventory management system, identify the products that are least profitable and slowest moving so you can pull them for clearance.
3. Create your clearance display. Do not hide your clearance in the back of the store. You can often tempt shoppers to come into your store by putting clearance items relatively close to the door. Limit the total space you devote to clearance. It is OK if the products are a little crowded. You do not want so much clearance that your retailer looks like a thrift store or as if you are going out of business. Try putting some small clearance items near the checkout line. You would be surprised how many people cannot resist this.
4. set the Right Price. Using actual prices rather than percentage-off signs typically attracts more bargain hunters. No math is required to see that “$10 each” is a good deal. Try sectioning products by price — a $10 display, a $20 display, a $5 and under the display, etc.
5. Kick it off with a loud bang. Have you ever walked in on a “clearance” sale that offers 25 percent off? That is not nearly enough to tempt true bargain hunters. Start with 50 percent off — possibly even deeper discounts depending on your industry.
6. Market online and off. Market your clearance through email, online advertising, social media, on your website and/or direct mail. Greet customers at your entrance and let them know about your clearance specials. Point out the sale racks or shelves and maybe even suggest an item. Giving shoppers a bag or basket to shop with can entice them to buy more, too.
7. Remember to Sweeten the deal. If your product does not sell on 50 percent clearance, do not hang on to it. Your primary goal is to move the items out of inventory, so increase the discount every day of the clearance — 50 percent the first day, 60 percent the second day, etc. — to motivate buyers.
8. Learn to let it go. What if at the end of your clearance, you still have stuff left to sell? Do not try to sell it next season. Know when to cut your losses.
9. Act Fast. If a product does not sell, have a plan for disposing of it at the end of the sale. You can try liquidators, remarketers or donating the items to charity for a tax write-off.
10. Don't Forget to connect with new customers. Make a special effort to get new customers on your mailing list. Ask them to sign up for your email newsletters or loyalty reward program. For those who are bargain oriented, asking, “Would you like to know about our next clearance sale in advance so you can get a better selection?” is generally all it takes to get them to sign up.
Finally yet importantly, do not forget to treat your discount buyers just as wonderfully as you treat your regular customers. Smile and have fun ringing up all those sales.