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Discounts can be a double edged sword. On one hand, it allows you to clear your goods and spike sales, on the other, it may end up harming your business reputation (click here to read more on our article on 3 Reasons Why Discounts May be Harming Your Business). But in almost any business, there will come a time when offering a sale may be inevitable, so how do we go about offering it without harming the integrity of your retail business? Here are a few pointers for you to take away.
1. A clear goal or purpose behind the sales
Holding a sale for the sole purpose of clearing stocks or trying to meet a sales target may not be a strong enough reason as you think. If you are constantly lowering your prices without much reasoning, customers may come to doubt the original value of your products. Instead, you can actually view your sales as a form of investment to generate more profits for the future. For instance, use your sales to gain attention from the public, promoting your brand along the way to create brand awareness and also to lure more customers to your business. This way, your sale will serve as a leader to generate more sales and profits for your business in the future.
2. Make it clear to customers that it is not a regular gig
Offering sales too often will result in customers being trained to wait out for a sale to purchase your items. To prevent that, hold sales only when it is really necessary and make it clear to customers that the sale is a temporary event or seasonal promotion. An example would be to hold out your sale for special events or festivities as it is a great way to drum up hype without making your sale seems like a constant affair. Alternatively, you can also offer occasional sale that appear to offer customers more value such as member’s sale as a form of gratitude for their continuous support. However, always ensure that the message it conveyed effectively to the customers if not they may think otherwise.
3. Minimize losses or at least break even
Sometimes you might have a bunch of stocks that you just had to get rid of, so you offer it at ridiculously low prices for the sake of clearing them off. If you make a habit of doing so, it may end up becoming your go-to method every time and will result in huge losses for your business eventually. Instead of doing so, why not use it as a leader to get customers to make more purchases? For instance, you can run a promotion whereby customers get to purchase their second item at a discounted price if they were to purchase this product, or alternatively, you can also offer it as an add-on when customers purchase other items, or perhaps give it out for free if they were to purchase above a certain amount from your store. This way, you can both generate profits while clearing stocks at the same time. With all that being said, one important factor that you should note is that if you are constantly finding your business in need of a sale, it is perhaps time for you to re-evaluate your business and stock purchases. Are you purchasing too many orders which leads to over stocking? Or perhaps certain items that are low in demand which you can reduce in quantity? It is advisable for sales to only be offered when there is an absolute need, if not you might be in danger of constantly turning to sales as an easy solution.
At Visata Creative, we work together with our clients to Design Profitable Spaces. To us, a bigger space is not always better, what matters most is the profitability of the space. What matters to us is “helping our clients to achieve the highest profitability possible within their retail businesses”. #Viscreative #DesignProfitableSpaces #VisRetailTipsIf you have any burning questions on retail, email us at email@example.com