Sales and discounts have become so common that some retailers fall into the trap of feeling they have to offering some sort of sale or discount at all times. That can become a vicious cycle of spikes of top-line sales during promotions, long dry spells of very slow business when the store is at regular price, and bottom-line profits that fall way short of expectations. But there is a solution. Follow these tips for how to effectively run an in-store sale without killing profit margins.
- Define Your Goals – Start with defining your objective. What are you trying to achieve? Are you trying to re-engage with past customers? Attracting new customers? Get rid of aging inventory? Increase unit sales? Increase sales volume? Get clear on your reason for offering the sale or discount so you can tailor the event to achieve the desired results.
- Choose Retail Promotions Wisely – Be aware of your margins. It takes more time but determining the best retail promotions for each product or product category will result in an effective sale without killing profit margins. Use a variety of discounts to create interest, sense of urgency, a compelling reason to buy, and encourage purchases of multiple items. BOGO’s, bundled promotions, conditional discounts, bounce-backs, $’s off vs. %’s off, limited time sales, etc. are all examples of different retail promotions you can select from to build an in-store sales event.
- Segment Your Customers – Many retailers find that 80% of their sales come from 20% of their customers. Offering a special discount, gift, promotion, or perk to your very best customers is a win-win for both your store and your customers. Offering a discount to a select customer group such as active or retired military, teachers, students, or whatever group makes the most sense for your type of business can also be effective. Be careful about “new customer” offers though. These often cause existing customers to have bad feelings about a brand.
- Train Your Sales Team – Your sales team has a huge potential to influence your customers. Providing your team with training on how to positively influence customers to bring attention to regular priced items, purchasing multiple items that enhance and complete their selections, and adding on to a sale by making suggestions that complement a customer’s preferences are all powerful tools to help protect and increase your overall profit margins.
- Timing of Your Sale – Seasonality may be an important factor in your business. Plan out month, quarter, and year
by identifying the natural sales peaks and valleys your business has experienced historically. During peak sales periods, discounts may not need to be as deep or as widespread. During slower periods, running a promotion or sales event could give business a boost by bringing in additional traffic and/or encouraging multiple units sales.
By having a strategic approach to planning discounts and promotions, your store can attract new customers, reward your best customers, and move significant amounts of inventory, all while achieving your sales and profit goals. Follow these tips and you can run in-store retail promotions without killing your profits. Long live brick-and-mortar!
Retail Level Up provides the training, resources, guidance, coaching, and expertise to help retailers survive and thrive in this new age of technology. Visit our website www.retaillevelup.com to learn more. Contact us at firstname.lastname@example.org to request a call or meeting.