{holiday special}
The Price is Right W
Sure, it’s the most wonderful time of the year. But what to do with unsold product after all the merriment dies down? Here are some ideas to make merchandise move. Megy Karydes
hile the idea of cutting prices may make retailers cringe since it impacts their bottom line, the reality is that you’re wasting precious
retail fl oor space with products that aren’t moving and that can be costlier than the products themselves. Having a markdown strategy helps you avoid slashing prices at the end of a season in an effort to unload unsold products. If done right, markdowns also make you a better retailer. By taking a more proactive approach to the markdown process, you can better manage product lifecycles and stock levels. Here are four easy steps to make the markdowns painless, profi table and fun. Consider price elasticity. Before fi nalizing the retail
price of the item, consider the markdown price in case it will be necessary to implement. Knowing in advance what the markdown price may be can lessen the margin hit if a permanent discount is necessary. Schedule it on the calendar. Be proactive and know
when you’re going to do your markdowns. Some retailers will markdown items if they see they won’t be able to get full retail price on them. Others will only do markdowns during certain times of the year. Monitor your sales fi gures and cycles to determine which strategy works best for you.
“On seasonal merchandise we evaluate our stock
position three to fi ve days before Christmas (and Halloween and Easter) and in the past few years, we have taken 25 percent off all Christmas merchandise three days before Christmas,” says Sonia Sotire Malloy, owner of SPLURGE Unique Gifts, Home Décor and Jewelry in Greenwich, Conn. “This motivates customers to purchase a holiday- specifi c gift and is a less costly markdown for us vs. 50 percent off on December 26.”
190 GIFT SHOP n Fall 2013
Although markdowns are usually considered at the brick- and-mortar level, online retailers are not exempt from having a markdown strategy as they, too, have to manage their inventory shelf space and open-to-buy budget. Kate Harris, owner of Crossroads Trade, a Seattle-based e-commerce site that sells fair trade items both online and at special events, considers several factors when determining when to markdown her items including how many weeks there are between Thanksgiving and Christmas and on what day of the week Christmas falls and when Hannukah occurs. Just as important as deciding when to start the markdown is when to end it. “Choose a date to wrap up your after-holiday sales,”
says Gina Lempa, an independent sales representative for Melrose International and Vickerman Company. “Communicate that date through your signage and social media efforts. And, when that day comes, remove it from the shelves, pack it away and don’t bring it out again until next season or for your Christmas in July sales blowout!” Another benefi t about having an end date, Lempa says,
is that it will help to train your customers that if they want it, they best purchase it now, because it will likely be gone when they come back for it later. Determine the magic markdown fi gure. Sotire
Malloy was once given the following advice by somebody she highly respected: Your fi rst markdown is your best markdown. “This holds true for us at SPLURGE,” she
GiftShopMag.com
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