Tuesday, 8 July 2014

Can you survive without promotions or sales?

  As retailers, we work on tight margins for large parts of the year.

The time to refresh and clear out old stock comes in the sales. Traditionally an annual event, this had been pushed into 2,3 or 4 times a year, mainly by fashion retakes that want to cleanse their stockrooms of the last season's unsold items.

An alternative method, pushed by the supermarkets and beauty stores is the promotional period. Thick is where particular lines will be on a particular promotion, often BOGOF or 3 for 2.

The other, less used, method is to create a clearance section or stand in your store to rid yourself of lines that haven't sold, are short of date or you no longer stick.

Can you survive as a retailer without moving to sale, promotion or clearance?

I think that the ideal scenario would be to never have to end up with any of these situations, as your pricing strategy will determine the sales levels of your products.  Say you have a line available in 5 different colours, and 1 colour is being left behind. Well, a price drop would perhaps be a better way of selling that line through than clearance, or editing for the sales.

Some retailers rarely have a sale, some never use promotional periods, so what would be the way forward to become a retailer that stands on your own merits? Would being respected enough to have your products bought at full price all year round be desirable?

I say "yes."

And I point to independent local retailers as both the answer and the solution to this. A strong local retailer that satisfies a local demand by producing or sourcing products that people need at an attainable price should have no need for promotions of sales, but could strike deals with individual customers.

"I'll buy 2 if you knock £10 off the price"

This is a better way for an independent retailer to do business than to sale or promotion their way through stock.

There is another solution that I have mentioned regularly in my blogs - Click & Collect, where you open up your range to internet buyers and have the item ready to collect in your store.  This opens up the potential buyers, and can be used to sell nationally or overseas if the shipping costs are not too burdensome. This increases sales and allows you to clear your range more quickly.

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