4 Ways to Get Rid of Excess Inventory
Out-of-date inventory is holding many retailers back. This issue can strike at any time of the year and keeps warehouses full of the wrong products. Inventory costs can account for up to 90 percent of business expenses, and no retailer wants that. So what's the best way to get those products moving at a price that's appealing to customers, but still makes enough margin for retailers? There are four main ways to address this:
1. Pricing: When an item is out of season, the best way to get it moving is to discount it. But by how much? The only way to know optimal pricing is to test. Why sell 25 products at 40 percent off when you could potentially sell the same amount at just 30 percent off? One way to optimize your discounts is to benchmark against top competitors that are also selling those products. Competitive analysis makes it possible to see how they're pricing those products, and then you can implement it into your own pricing strategy. Consumers are looking for these discounts. Case in point: 64 percent of shoppers want to see more of them in 2015, according to RetailMeNot.
2. Flash sales: Most of us have probably gotten emails from flash-deal sites before. They're excellent at creating a sense of urgency, and 73 percent of shoppers are influenced by discounts. Flash sales are so effective because they include a firm cutoff date to get recipients to click through to their site. Monetate found that flash-sale email click to open rates are 56 percent higher than other email campaigns. When retailers partner with flash-sale sites (e.g., Rue La La, Zulily), they also get access to a vast list of subscribers, significantly expanding their prospects. Why not give consumers a reason to click through to your site for a great deal that only lasts a short while? Your conversion rate and revenue sure won't complain about trying this one out.