The arrival of fall brings with it a lot of baggage. Many are saddened by the end of summer, tormented by back to school madness, or elated by finally getting to break out their fall wardrobe with the arrival of #sweaterweather. Ecommerce retailers, however, may have an entirely different thought come to mind – fall brings with it the need to sell through summer markdowns to make room for new fall inventory (i.e. the end of #tanktopweather). This may be a particularly salient situation for apparel retailers, which make up for about 1/5th of online sales, or an estimated $103 billion in sales in 2018.
To deal with this changing of the seasons and the need to make room for new items, many retailers are forced to mark down a summer collection with coupons or special prices. Unfortunately, just adding a markdown price to a product will not magically drive sales and clear your shelves. Through our 15 years of ecommerce experience, DMi Partners has amassed the following strategies to assist our ecommerce clients with selling through aging inventory:
- Make your clearance section easy to find. Don’t take away from your primary high margin revenue drivers such a new releases, but don’t bury your markdowns if you want them to sell. Make your markdowns a single click away by adding them to your main site navigation.
- Make the original price and the markdown price clear on the product grid and the product page, so users know how much they’re saving. And to save them from doing the mental math, show the percentage markdown as well. So if a product was $50 and is now $40, make sure the user knows it was $50, it’s now a great deal at $40, and they’d be saving 20% – see J.Crew for a good example.
- Make it clear that these are past season items and you’re making room for new releases, and that there are no defects. You don’t want to send the message that these items are unpopular in any way. A great example for justifying your markdowns is Lululemon’s messaging of “We Made Too Much” for their sale section.
- Get creative with coupons to allow an additional markdown, as you get more and more desperate to sell through your markdowns:
- Utilize cart abandonment technology to offer a coupon in an email for an extra percentage off clearance items that are left in a cart.
- Send an email to your subscribers giving them an exclusive ”secret” coupon for your clearance section.
- Encourage bulk purchases of multiple markdown items. Consider giving free shipping or an additional 20% off the already reduced price when 3 or more markdown items are purchased.
- Group your markdowns into collections that will appeal to the varying types of bargain shoppers – “Recently Reduced” or “New to Sale” items will attract those that are concerned about missing out on what may sell out quickly; “Over 50% off” will attract your deep discount hunters; and some brands with very loyal customers, such as Ohio-based Homage.com, may be able to group multiple clearance items into “Mystery Packs” where the user gets a set number of items in their size but does not pick the specific styles.
As online shoppers become more and more expecting of promotions and savvy at planning their purchases to get the best deal, ecommerce retailers must continue to think creatively about how to maximize their sales. And while pushing markdown products may not drive the largest margin, it cannot be overlooked as a critical cog in the ecommerce wheel.
To learn more about DMi Partners’ ecommerce management services, please contact us today.