Sales and promotions will get your customers buying more, raise your store’s profile, and get your customers to try different products. While having a sale may seem like it’s hurting your profits, in the long run, it’ll be beneficial to you and your customers.
In this article, I will discuss strategies behind putting an item on sale in your store, and how to make the best of your markdowns.
Why You Should Have a Sale
There are two good reasons to run a sale: it drives sales and makes you look good
It Drives Sales
Sales are all about customer psychology.
Most customers know the market and are aware that stores will run a sale eventually. Most consumers will wait for that sale to shop. In fact, a recent study suggests that 45% of women won’t even enter a store that isn’t having some sort of sale. 28% of sales of impulse purchases happen because of something on the shelf, and 90% of people impulse buy!
A sale will make a customer more likely to try a new product, as they feel like there is less risk involved when the item is less money. If they like the product, they may decide to buy it again even when it is not on sale.
Sales increase the probability of impulse purchasing. If, let’s say, you put cereal on sale, your milk purchases will also rise. So not only did you sell more cereal, the accompanying products will also move.
In the same vein as above, if the customer was only going to buy one cereal box, but sees if they buy two they will save more money on the two boxes together, they will likely buy the TWO boxes. So now, instead of selling one, you’ve sold two.
Lastly, when you have a dead product, aka a product that isn’t moving, you are actively losing money. Some quick math:
If you bought 6 cereal boxes for 1 dollars each, you have spent a total amount of $6 dollars.
You mark up the price for a profit to $2, but you only sell three of them, so now you’ve made back your six dollars. After you’ve made back your initial investment, you don’t LOSE any money. Putting the other three on sale will make them move, and get you profit. If they are sitting there, you’ve made nothing – you only broke even.
2. It looks good for you
If those above reasons aren’t good enough reasons to have a sale at your store, you have one more really good reason. Customers trust stores that have sales. They build a relationship with you and think of you in a positive light. This will keep them coming back.
Picking a Sale Item:
Here’s a quick checklist for picking the right product:
- Have you already broken even on this product?
- Is this a quality product?
- Will your customer see the benefit of the product and sale quickly?
- Do you have enough of the product to sell?
- Can you effectively display this item and the sale itself?
If the answers are all yes, you can put it on sale.
Go Big or Go Home
Signs and promotional posters are the number one reason people buy impulse items. It is CRUCIAL to advertise your sale effectively.
To run a sale, you will need signs and posters, and clearly mark the products and their discounts. Half the battle of selling is getting them in the door, and advertising is a draw for your current and potential customers to shop by you.
Running a sale can seem like too big a job and too big a risk. The easiest way to cut out that risk is using a third-party, like the BR Club, to run the sale for you.
BR Club can and does take a lot of the burden from you. It reimburses you within 24
hours, so you don’t lose money on the sale, they give you window posters so your customer is aware of the sale before walking into the store, and shelf talkers so your customer can easily find the products on sale. What’s the catch? You have to promote what BR Club choses and the customers do need to opt-in to the BR Club (using their phone number).
Track your Success
Data can help us prove if a campaign was successful or not. How do you know if you’ve broken even on the product? How do you know if you’re moving more product with the sale?
Being able to track your sales is a really crucial part of the sale process. It can give you incredible insight into your customer and your store. It can help you decide how to order inventory in the future.
There are many ways to track data, the best way is through automation. If your POS doesn’t have the ability to track and analyze store statistics for you, it’s time to change.
Sales at your store will make you happy, especially when you see the positive results.