For a retailer, selling off outdated or unwanted stock requires effort and imagination.
Nothing can be worse for a retailer than to purchase stock, display it for sale, and then find no one wants to buy. Not only has the purchase of this inventory cut into the cash flow, but it also takes up floor space that could be better used for merchandise customers actually want. Seeing the same merchandise day after day sends a subliminal message to regular customers that the store has nothing new to sell or that perhaps the store is having financial difficulties and can’t afford to restock with new goods. What can the owner do?
Product Placement
Most impulse purchases are made near the checkout counter. To benefit from this moment, place slow-moving items near the checkout with signage advertising them as this week’s specials. Ensure sales staff can talk about the benefits of these products. For example, if the item is a silk scarf, the benefits may be current style, quality, elegant-feeling texture, newest colours, etc.
Pricing
Old inventory must be priced to move. Since you probably do not know the elasticity of demand for every class of product, you should initially set prices as close to break-even as possible with the hope of avoiding a loss.
Bundle
If you are having trouble selling a particular product, you might be able to move it by bundling it with a complementary or related product. Bundling enables the consumer to see how the products can be used together. A customer may not buy a router by itself but, if the router is bundled with bits, the package becomes more desirable.
Relocate In-Store Products
If sunglasses are hidden in the corner, moving them closer to the suntan lotion or the swimwear might create sales.
Attractive window displays bring customers through the door.
Displays
Attractive window displays will entice even those who are not at the moment interested in purchasing. Change your displays regularly and place an attractive assortment of products inside the front door. This demonstrates the range of quality merchandise and will draw customers further into the store.
First Impressions
Place slow-moving items near the entrance, and keep the display attractive to avoid giving the impression of a clearance rack. Potential buyers will be enticed by the appeal of low prices before making any other purchase decisions.
Product Knowledge
Sales personnel with product knowledge create sales. When a consumer asks questions about a product, they expect a well-informed answer. Anyone can read a label, but often a consumer will want to know additional information. Encourage staff to become knowledgeable about all products, including the ones priced to move quickly.
Discounting Guidelines
Management can offer bonuses for moving items stalled on the floor. However, customers may resist spending if they feel pressure by overeager sales personnel. The commission percentage has to be structured to prevent erosion of the profit margin. Rather than paying commissions, you can provide guidelines for staff to negotiate a price if they see a sales opportunity. Permitting staff to offer a certain percentage discount will often encourage the purchase.
Websites, Email and Social Media
Perhaps the product is not moving because customers do not know it exists. Keep current and future customers informed with a business website, or by using email, Facebook and Twitter. The website should provide all necessary information about your product line and today’s deals. Also, consider investing in photos of merchandise and printable e-coupons that provide discounts on slow-moving merchandise.
Marketing vs. Selling
Every retailer must understand the difference between marketing and selling. Marketing is your strategy for bringing your product to the attention of the customer most likely to buy it. Selling, on the other hand, is the ability to persuade that customer to purchase the product or service that meets their needs. The interactivity between you and your customers facilitated by the Internet should enable you to keep closer tabs on what your customers want and leave you with fewer items lingering on your shelves and needing an imaginative effort to get them out the door.
* This article is reprinted from the newsletter Business Matters with the permission of the CPA Canada*
