Planning For Holiday Markdowns
With the current state of the economy, many experts are recommending that all retailers should be planning for some sort of seasonal markdowns or permanent markdowns. Failing to plan this properly could possibly
have a negative impact on both your season and your bottom line.
Part of the reasoning behind this is that many consumers have been paying-down debt and/or holding on to their cash. Many plan to hold off on making major purchases, or will not buy anything that is not on sale or not discounted heavily this holiday season.
Marking down the slow selling items, especially if it’s seasonal, is good business practice. Waiting to mark something down that you already know wont sell doesn’t make good business sense. Doing this earlier in the season rather than waiting, makes more sense. You will most likely sell more than if you wait until the end of the shopping season, when consumers have completed shopping.
Some things that you can do to motivate buying.
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Proper signage – Make sure that you have signs that adequately highlight the markdowns.
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Clearance Item placement – Consider creating a smaller clearance section (with adequate signage) where it can seen from outside the store. Then place higher margin items and impulse items between the front door an the clearance items. This means that customers will have to walk past these items to get to the clearance table. In this clearance area, place smaller signs indicating that there is a larger clearance area at the back of the store. Again, as in the first example, customer will have to pass you other merchandise to get to the clearance section. This type of product placement gives all of your inventory more exposure and should increase your overall sales.
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Pick a percentage that motivates buying – A 20% or 30% markdown is more likely to stimulate buying especially if the item(s) are not fast movers, and as compared to something as low as 5%.
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Consider having a Price Point table – You could have something like "All table Items for $10", "Any 3 items for $15", "buy one, get one free".
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Training Sales Staff – Take time to thoroughly train your staff on selling behavior that encourages them to actively sell regular priced merchandise. This practice could also involve "bundling" of regular priced items with sale items (e.g. Sale price Jacket with Regular priced slacks, plus Sale priced shirt and Regular priced Tie).
If you need assistance with setting-up markdowns, and sale prices in your system, please contact CCS Retail Systems Support Department.