Are you carrying unsold merchandise in your store?
If those unsold products are collecting dust on shelves or taking up space in your stack room, they’re not bringing in profits for your business. It’s time for a clearance sale!
The word “clearance” is overused nowadays when many retail chains offer weekly clearance deals. It is basically something that is done in a limited manner and in small quantities.
However, when clearance is done sparingly, it tends to be a highly effective marketing strategy and helps in clearing the stock continuously.
It attracts not only your regular customers but bargain-hunters also who might not otherwise stop into your store. For instance, many people who don’t usually shop from the specific brand hit the discount store regularly for its seasonal clearance sales.
For retail businesses, it is important to have a balance between inventory prices and promotions to maintain profit levels.
Many companies use clearance sales as a promotional strategy, and as an inventory management tool that can help them in getting rid of excess inventory.
It also serves the interest of price-conscious customers. Clearance sales are mostly seen in the retail sector, but these sales can also be effective for events, activities and service-related offers.
The sales should be scheduled not only on a seasonal basis but also on major holidays and timely factors that may affect shoppers’ behaviour and attracts them to explore your store.
Retail pricing and clearance sales help you balance inventory by getting rid of laggards. It differs from just a sale. Want to know how and why? But let’s first understand…
What is a Clearance Sale?
A clearance sale is a marketing strategy where old products or merchandise that did not sell are sold with the help of attractive discounts and offers.
This sort of sale usually helps in giving you a fresh start in terms of acquiring a new set of products that are more suitable for your business and your customers.
In general, many business owners find the practice of clearance sales as a sign of weakness because it shows that they couldn’t sell products that had minimal demand.
However, the same business owners should consider this as a great opportunity to get back their investments instead of retaining and keeping their old inventory as it is.
Since many shoppers keep a close eye on brands that sell their products with huge sales and offers, such a sale is a golden opportunity for you to retain your current customers and attract potential customers to your store.
Here, we will discuss how you, as a business owner, can benefit from having a stock clearance sale, and how you can dispose of your inventory.
Importance of Stock Clearance Sale
There comes a time when the stock takes time to finish, and when this happens, according to experts, there is no room for new arrivals.
In such a scenario, the company should look for an alternative so, that they can get rid of the old stock.
Here are the guidelines for why stock clearance is important for the company.
Reduces Inventory
Stock Clearance sales help reduce excess inventory in a store or product fulfilment chain. Customer purchasing trends change quickly and result in excess inventory that clutters a store.
Maximizing self-space for in-demand items and fresh arrivals helps maintain sales levels and profits of the business.
Clearance sales help minimise the financial impact of products that were not popular or over-purchased without diluting the price levels of other merchandise.
Increases Sales
Clearance sales increase sales traffic and promote the brand indirectly, especially from value-based customers.
When the discount is offered, the lower-priced goods entice the customers and hence, increase the range of customers who can afford to purchase products from the company, or it offers an attractive purchasing option to existing customers.
By placing the sales section at the back of the store, customers are more inclined to purchase regular-priced items since they have to browse other sections en route to the clearance section.
Season Shifts
Clothing, accessories, decorations and other products often feature a seasonal component. Businesses offer these types of goods as it is the most trending products.
It is important to shift inventory as it reflects seasonal demand. Clearance sales can help move goods from a prior season to free up space for the next season’s merchandise.
Lower Price Point
Clearance sales also offer an opportunity for customers to access and evaluate a company’s products at a lower price. You might have observed that when there is any sale on products, like beauty supplies, it encourages customers to try new products.
Customers who like the product may become repeat customers at the regular price point. This strategic way of clearance sales can increase a company’s customer base.
Maximize Attendance
In order to maximize profits and attendance, service providers or event organizers can use clearance sales to sell tickets for date-sensitive events. You can sell seats, tickets or special upgrades at a discount near the date of the event.
You can see often, travel based or event companies use sale promotions for their services, shows, and concert but generally, they use an alternate name for promotional purposes.
Now, we understand the importance of Stock Clearance sales. You should also know the smart and creative ways to drive your stock clearance sale.
11 Creative Ways to drive your Stock Clearance Sale
Here, we are with the most creative ways that are definitely going to attract shoppers and hence, it will boost your sale, and you can retain the customers later.
1. Time the Sale Right
Having a clearance sale every quarter and especially during the festive season is an effective way of clearing out unwanted inventory.
You need to review the profit of all the products you have so that you can evaluate and identify which products are sold at a slow rate and what better price you can offer for the same product during the tail end of the season.
Seasonal clearance does make sense for most retail businesses. And, it attracts customers too. A clearance every six months may work if your products aren’t particularly seasonal.
Just don’t let too much-unsold stock build up.
2. Display your Clearance Items
Generally, many people love window shop first and then make a purchase decision regarding any product.
So, during any sale in general, make sure that your discounted products are displayed upfront, right in front of the eye of on-lookers, so that they shop, see, and think about their relevance to them.
You can often tempt shoppers to enter your store by putting clearance items close to the door or near the cash counters. Make sure you limit the amount of space you keep for clearance. If the products are crowded or messed up, it’s okay.
Do not go for so much clearance that your retail store starts looking like a thrift store, and it seems like you’re running out of business.
You might want to try putting some clearance items near the checkout line. You’d be surprised how many people can’t resist this.
3. Price it Right
Using actual prices rather than percentage-off signs generally attracts more bargain hunters. No math is required to see that “₹299 each” is a good deal. Try sectioning products by price- a ₹99 display, a ₹199 display, a ₹499 and under display etc.
It basically depends on the type of product.
4. Market Online and Offline
Promote your clearance sale through emailing, online advertising, social media marketing, on your website and/or direct mail so that you can give your customers the sense of “being wanted”.
Apart from online promotional activities, you can advertise your products through offline channels like billboards, and can also point out the item for sale through posters and other visual representations that showcase the same.
Greet your customers at your entrance and let them know about your clearance specials. Point out the sale racks or selves and maybe even pitch and suggest an item.
Giving shoppers a basket or a bag to shop for is another great way that may entice customers to buy more.
5. Sweeten the deal
If your product does not sell on 50% clearance, don’t hold on to it. Your primary goal should be to move the items out of inventory as fast as possible.
To motivate buyers, increase the discount every few days of the clearance, such as 40% on the first day, 50% on the third day, 60% on the 7th day, etc.
This may attract buyers, and they, wish to avail of the heavy discount.
6. Let it go
What if, at the end of the clearance, you’ve still got stuff left? Don’t think of selling it next season. Act smartly, and offer that product with some trend product. It will attract customers, and you will not be loaded with inventory. Know when to cut your losses.
7. Connect with New Customers
You can make a special effort to get new customers on your mailing list. It’s a great time to attract and pull customers towards your brand by offering them discounts and offers. Ask them to sign up for your email newsletters or loyalty reward program.
For those who are bargain-oriented, ask them whether they would like to know about our next clearance sale in advance so you can get a better selection. This is generally what it takes to get them to sign up.
8. Choose your wares
Determine which products are least profitable and slow-moving using your point-of-sale system or inventory management system. And you can pull your inventory this way.
9. Kick it off with a Bang
Ever been to a “clearance” sale that offers 15% off? It’s not nearly enough to tempt true bargain hunters. You can start with 50% off and later you can increase the percentage of discount that should be offered after evaluating the demand.
10. Fishbowl Discounts
You can create slips of paper with a variety of discounts on them. Let customers choose a slip of paper at the register, which will determine the discount they’ll receive. Punch up the excitement by putting one slip in the fishbowl with the word FREE on it.
11. Donate it
If a product doesn’t sell, at last, you can plan for disposing of the products at the end of the sale. You can try liquidators, re-marketers or donate the items to charity for a tax write-off.
Conclusion: Driving Stock Clearance Sale
For a business owner, the feeling of getting rid of old inventory and having the resources to acquire new products are among the best feelings they can have.
To grow your business, you have to ensure that you have to follow the given steps so that you can give a positive and fresh start to your store.
And if you are a brand to want to expand its retail stores, Contact Us or mail us at hello@91sqft.com.
