To ensure you dominate the first quarter of retail trading, we give our tips on what to look for when analysing sale performance, taking further discounts and adding new lines to sale.
Here we are already half way through the first season of the year and in the midst of Mid Season Sale (MSS) mayhem. Your markdown SKUs are live, but how are they tracking? Selling like hotcakes or still turning on 20 weeks of cover?
Now is the time to check how your markdown performance is tracking against your retail markdown strategy keeping inventory management top of mind. We want to avoid having funds tied in last season’s slow movers.
Below are a couple of points to review, to ascertain what action to take during the MSS period to ensure your success.
Review what’s working and what’s not
I like to think of retail analysis as a better way to understand your customer. Sale analysis will provide you with insights regarding your pricing architecture and what products resonate with your customer.
1. Full price vs markdown mix
Review performance of current markdown clearance stock. During sale periods, we expect to see a shift in the percentage of sales that are coming from markdown, after all the aim of the game is to clear underperforming stock. However, if your data is telling you otherwise it may indicate underperformance.
2. Markdown cover
Consider how quickly your sale stock is turning. You want to ensure you have enough stock to continue strong sales for the remainder of the sale period. On the flip side, if you have too much cover you risk being overstocked.
3. Sell-through rate of markdown stock
Your sell-through rate will tell you what percentage of markdown stock you have sold through.
Pairing these metrics together will identify the levers to pull to drive certain outcomes.
For example, if you have an SKU with high weeks of cover and low ST percentage the levers to pull would be applying a further discount paired with marketing support.
Take Action ASAP
Now you have an understanding of what’s happening, it’s time to implement actions and pull identified levers to impact your business results.
1. Apply a deeper discount
When taking a further discount, the usual business practice aims to protect profit and margin and ensure you never offer discounts deeper than the cost of the price of the stock you paid.
Next, decide how you will execute the further offer you have decided to apply. We suggest looking back on previous promos & sale messaging to identify the type of offers that resonate best with your customer. For example, did the promotion “3 for $25” do better than “Take a Further 25 per cent off”? Don’t be afraid to test the water with different promotions, test and test again until you find your magic formula.
2. Identify new lines to add
If your mid-season sale is overperforming and you have sold out of a high number of SKUs, you might decide to add additional lines to your sale. Adding new items keeps your offering exciting, and can entice the customer to return to see what else is on offer. Given markdown sale messaging generally drives more traffic to your website, you want to ensure there is a wide enough assortment of products to increase the chance of conversion once landed.
3. Remove all sold-out lines
Don’t forget to remove items that have sold through. Landing on a sale page that is housing sold out items is not a great experience for your customer.
The results of having out of stock items within your e-commerce store can have a greater impact on your business than you might think. Conversion rate, customer acquisition cost, and repurchase rate can all take a hit if out of stock items are left live on your site.
4. Engage in marketing
Finally, don’t forget to let your customer know the changes you have made. After all, there’s no show without punch or in retail terms marketing support.
Sale messaging should be consistent across your marketing channels. Consider the amount of stock you have to clear and whether it warrants some paid advertising to really drive the sales home.
Get on the front foot of your season, by analysing the points above and taking action now to achieve MSS success.