Chances are you’ve purchased extra merchandise for the holiday time period.
Chances are that you’re also aware that nearly every retailer is on sale to a degree that’s never been seen before. For a consumer, you can’t afford not to shop.
I was in San Francisco last weekend and was surprised to come across a few small, independent stores that hadn’t gone on sale. Perhaps it was that they didn’t need to go on sale. But judging from the lack of customers in the stores, my guess is that they could have used the extra traffic and sales.
I’ve long advocated not going on sale for the sake of going on sale. There’s no way you’ll ever compete with the big guys from a pricing and discouting perspective.
But during these tough times, consumers expect a deal, no matter where they’re shopping. And the fact that you’re not offering discounts at all or deep enough discounts is going to hurt sales right now. There’s not much out there that’s so unique that customers can’t go elsewhere. And that’s exactly what they’re going to do if they walk in and don’t find anything on sale.
THE REAL WORLD RETAILING TAKEAWAY
Go on sale now to make the most of the last week of Holiday Shopping.
The sales are so dramatic in most major retail chains and department stores that it’s tough to compete. Customers aren’t expecting you to mark a chunk of your merchandise to 40% off, then give a coupon for another 20% off that sale merchandise, as Bloomindales did last week.
But they are expecting you to give them something. Here’s how to figure out the hows and whys of discounting.
1. Determine why you’re discounting. If you just want to move excess inventory, then discount at lower levels. If you’re in need of cash, then discount at higher levels to move more merchandise. Just make sure you aren’t discounting so deeply that you run out of product.
2. Determine which items to discount. Size up your merchandise and inventory. Determine specific products or product lines that you are high in inventory on. That’s a good place to start with markdowns. At this point, anything less than 25% is going to pale to the discounts most others are offering. The level to which you discount needs to be based on your goals.
3. Tell your customers. Create signs for you windows and send an email out to your database. You want to drive as much traffic as possible to clear merchandise.
You also should be thinking about your strategy for the day after Christmas as it relates to discounts if you haven’t done so already.
How is discounting helping drive traffic and sales to your store?