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Even as we’re writing this, big brand names like Poney, SODA, Fella Design, Harvey Norman, Shoppers Hub and many more are having clearance sales to clear off unsold products from their warehouses. It frees up space in the inventory for new ones.
It’s an inevitable part of being in the retail business.
Here, we’ve outlined a few things to remember to run better clearance sales.
Benefits of Having a Clearance Sale
The more products you hold, the more you spend on warehousing and overheads. Some shoppers and loyal brand followers actually follow stores and brand names to patiently wait for the yearly clearance sales.
One big example in Malaysia would be the Big Bad Wolf book sales. It has helped their business reach the shores of major Southeast Asian countries like Indonesia, Thailand, Taiwan, Sri Lanka and others like UAE and South Korea.
To improve the result of your clearance sale, you need to time it right and make it to the right audiences with advertisements, content, announcements on social media, placement of banners, handing out of flyers and brochures, and emailing the news out to your database of loyal customers.
Although the words ‘clearance sale’ is seen often even as we linger around malls, retail chains see a more positive impact when they run consistent clearance sales.
These weekly or monthly deals work because customers know what and when to expect them. Once you get the marketing engine working, it helps the business regularly get stuff out of the warehouse and off the shelves!
Better clearance sales attract not just new customers from your website and social media accounts, but it shines a spotlight on your store with big, red, neon banners on your shop’s window.
Bargain hunters would otherwise not have given your retail outlet a chance.
For instance, if not for the signs outside their retail outlets or showrooms, people may not even consider dropping by branded outlets like Cellini, Monte, Rozel, or Zolano when they’re looking for quality sofas.
Customers patiently wait for the sales to roll along.
Running seasonal promotions and clearance sales are the few ways successful ways these brand names move their inventory. You should take a page from their marketing playbook.
"What differentiates sellers today is their ability to bring fresh ideas." - Jill Konrath
How Often Should You Run a Clearance Sale
Depending on the retail business, its brand, partnerships and affiliations, costs, and marketing strategies, many companies run clearance sales regularly, especially towards the tail-end of a season. Most of the time, that would be every quarter of the year.
If your products are not particularly seasonal, any time is a good time. Big brand names hold at least two major clearance sales every year and it works great to help them clear off space for new products.
Each time, they run a different clearance sale concept to appeal to different customers.
Choosing the Right Concept for the Clearance Sale
If your retail outlet sells mainly one type of product or fits into one category, there’s nothing much to worry about as far as clearance sale themes are concerned.
On the other hand, if you’re holding onto products from multiple categories, work with your product and marketing teams to come up with an inventory management system to identify products that need to get off the shelves as soon as possible.
Most of the time, retail outlets pick the slowest moving brands/products to pile them on together with other more popular brands to make the clearance sale more irresistible.
The slower moving products would then be riding the waves of the popular brand names. Savvy shoppers always look for ways to cut some corners when it comes to spending on their favourite (sometimes more expensive) brand names.
Creating the Right Displays for your Products
Feature the branded products in a prominent area during the clearance sale, flanked by other products you wish to push. Think like your customers.
Shoppers who prefer bargains are different from your regular shoppers - they consist of mostly penny pinchers and curious aunts who ask, ‘Are these really bargains?’ even when they see a sign offering them a 70% discount in front of them.
The bigger the brand, the better the clearance sale will perform. So, don’t hide the high-performance brands in the back of the store. Show them off at the display racks right in front of the event. Like right in front of the door, if it's possible.
If you’re holding a clearance sale in your retail outlet, avoid turning your store into a thrift store. These bargain hunters are serious about getting value for money, not spending on cheap thrills.
To improve the promotion, you can have a mobile wagon display in the middle of the store with all the clearance products in them, a rack showing off the best of them all, or deck them out near the checkout line.
You’ll be surprised at how important the placement of products is when it comes to clearance sales.
Display the Right Price and Not Discount Percentage
You can either display the price of the discounted products itself or choose to highlight the percentage of discount you’re offering your customers at the displays.
Data shows that customers actually prefer not to do the math while shopping, even when you have a chart to refer to. It is not a complete turn-off but it might deter them from piling more products onto their cart while shopping because they’re unsure.
That is why coming up with a pricing and pairing strategy is extremely important to the overall effectiveness of the promotion.
For those who are new to the business, consider the 5 most common ways to arrive at the right pricing for products.
Biggest Discounts at the Forefront of your Clearance Sale
You’re going to be slashing the prices off from some products more than the others. To attract your customers, feature the biggest promotions and discounts prominently. Promotions that’ll turn their heads, make them curious, and bring them around for a second look.
Shoppers often give modest 10% to 20% discounts a pass when they are familiar with the original pricing of the products. Especially when it's luxury items. Feature the more attractive discounts to tempt the true bargain hunters who know their stuff.
Here are some ideas to make your displays work for you, even if you're a small or medium-sized retail business.
Getting into the minds of your customers is an important aspect of marketing. Shopping for kitchen supplies and clothing require different tactics. Work with your marketing team to come up with irresistible offers for your retail outlet to make it stand out in a sea of offers.
Get the Word Out about Your Clearance Sale
We would argue that a large majority of your customers are constantly searching for deals online. Placing an ad in a local daily may have worked wonders ten years ago but this is no longer the case in the modern era of retail marketing.
To improve the clearance sale, you need to get the word out online as well as offline.
Platforms you can use to get the word out about your clearance sale are:
- Your website
- Social Media
- Apps
- Partnerships
- Content
- Online advertising
- Social media advertising
- Direct mail
- Placement of products on online marketplaces
To complement your online efforts, give your staff enough time to highlight the clearance sale to customers who are still walking into your store so that they can hand out flyers or cards before the event.
Give Your Customers Exclusive Incentives to Shop More
Businesses need to improve the concept of their clearance sales over time.
Let’s say the products are not moving as quickly as anticipated, on-the-spot reevaluation might be made to move the goalposts, like increasing the discounts by the week.
Retailers must not forget that the main objective of running the clearance sale is to reduce inventory.
So, if the 30% discounts aren’t working, try 50%. This motivates savvy shoppers to spread the word or to come back for more.
Get as Many People Talking as Possible
It doesn’t cost a lot of money if you make every ad dollar you spend working for you. You just need to know the right channel to use.
First of all, invest in some bright, colourful, attention-grabbing signs and hang them as loudly and proudly as possible around the vicinity of your retail outlet or where the clearance sale will be held. It just has to be something legible and attractive that can be clearly seen from afar, nothing fancy.
Save the money on online ads and invest in paid influencers to help you spread the word.
Use your website, blogs, or social media accounts to the best of your ability and offer your followers and fans an incentive to visit your retail store during the clearance sale. You can also use messages and emails to keep interested buyers in the loop with updates on pricing, schedule, and location by adding pictures, advertisements, and details.
In fact, if you have online or offline partners, ask them to help you hand out flyers in their stores or provide a writeup on their social media accounts. Offer to return the favour when the time comes.
Conclusion: Understanding the Job of Clearance Sales
Companies like Zara and H&M, in the United States, it would be Walmart, dominate the fast fashion market. They run on a five-week supply chain cycle. When the lines are not moving, actions are swiftly taken to move them.
For these brands, inventory is almost everything.
"After another week, donate it to charity or if you have to - write it off as a loss and throw it out. Do not let it stay in your store or backroom." - Retaildoc.com
Using the right displays and shelves during your clearance sale is as important as marketing and organizing it. The right shelving units and displays help your customers navigate their way around the venue or your store. It gives them the motivation to put more items into their cart before checking out.
Coupled with bright displays and attractive bargains, we’re sure you’ll be able to move some of your products out of the inventory, making space for new products and models.
Find out more about using the right shelving and displays at www.decowall.com.my and www.formedge.com.my. We’re one of Malaysia’s leading retail display companies and we’re always ready to help you find affordable and reliable retail display solutions.
Be sure to also follow us on Facebook, Twitter, Instagram, or our Blog for the latest information. If you'd like to see things in person or speak to someone professional about which shelving unit is best for your business, drop by our showroom and office in Kota Damansara, Petaling Jaya, Selangor, Malaysia! You can also reach us at enquiry@formedge.com.my.