4 Ways to Rework a Failing Clearance Sale | Carol Schroeder

Retailer and retail analyst Carol Schroeder breaks down why a sale might not be working and how to get merchandise moving again.

We used to privately refer to the customers we only saw during clearance events as “sales vultures.” Although these rather ugly scavenger birds get a bad rap, they serve an important purpose by cleaning up the environment and preventing the spread of diseases. Similarly, sale shoppers help us get rid of slow-moving merchandise, cleaning up our inventory to make room for fresh purchases.

Recently our clearance sales have not been met with the enthusiasm we had come to expect. We can speculate about the reasons: perhaps too many promotions by big box stores have numbed shoppers to so-called-sales; or decluttering customers don’t want to purchase items just because they’re marked down; or leaner buying on our part has left us with less really desirable excess inventory. But the fact remains that we need to clear out some goods – it’s part of a healthy retail cycle.

One solution may be to get a jump on clearancing items by marking them down 20 percent to 25 percent while keeping them in a regular display. There is no denying that sale tables sometimes might as well have the word “loser” hanging over them. If no one else wants these items, perhaps they’re not a smart purchase. But to a customer is looking at mugs, for example, it won’t be obvious without picking one up that some have been marked down.

An effective way to move quantities of merchandise is to offer a BOGO special – buy one, get one free. In essence, you’re marking the items down 50 percent – but without the clearance stigma. If you don’t want to take that deep a cut, you could also do buy one, get a second one for half price promotion. Some stores use the grab bag idea to sell items “blind.” While the element of surprise can make for a fun gamble, it’s important that the retail value be considerably higher than what the customer pays.

Ultimately I think we’ll be giving away more items that we can’t sell even at clearance. We’ll remove price tags and donate some goods to local charities. The rest will go to the “free shelf” where we offer unsold items to our employees – a popular staff perk.

See more from Carol Schroeder, author of Specialty Shop Retailing and co-owner of Orange Tree Imports, in the Savvy Store Solutions tab.

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