Post holiday sales will get rid of excess inventory
The holiday season is the biggest time of the year for most online retailers. However, even after the most successful holiday season, it's quite likely that retailers will have excess inventory. Perhaps they ordered too much inventory just to be safe, or they misjudged demand for some items. Either way, this excess inventory essentially freezes capital, and the value of this stock will only depreciate over time, so retailers should look to get rid of it in a timely fashion.
For many online retailers, this leads to post holiday sales.
These promotions can be an effective means of targeting customers who may have received gift cards as presents over the holidays or budget-conscious shoppers who are always looking for deals. Well-executed post holiday sales can help retailers effectively offload their inventory, drive revenue and bolster their relationships with customers (particularly among ones just acquired during the holiday rush).
However, as Practical eCommerce noted, these sales can also go horribly wrong. Offering poor post holiday sales won't generate any interest, while slashing costs too much can result in short (or even negative) profit margins. This is why online retailers need to carefully consider which items they bundle, they way they present their products and how much they discount goods.
Planning the perfect post holiday sales
The first step to creating attractive post holiday sales is by creating unique offers that will pique the interest of consumers. Many online retailers are under the false perception that this can only be done by offering deep discounts, when in reality, there are a number of ways that they can create compelling sales experiences.
For example, a department store could offer a free winter hat with every purchase. This gets rid of inventory that is losing seasonal relevance while also encouraging customers to come in and shop. It could also donate stock of the hat to a homeless shelter, which would still encourage customers to shop and also provide them with some feel-good holiday cheer.
Retailers should also be creating unique offers specific to their customer bases. Thanks to new eCommerce software, it's incredibly easy for merchants to collect and consolidate all sorts of relevant information about their target audiences. Everything from purchase history to page views can be used to color a more accurate picture of where customers' interests and desires lie.
Online retailers should use this data to create truly relevant sales and discounts.
Don't offer everyone the same thing. Instead, offer them discounts on what they actually want to buy.
Finally, retailers should be aware of deep discounts. Sometimes, deep discounts are necessary.
Items that may be candidates for deep discounts could include anything that takes a lot of space in the warehouse, that is likely to go out of style soon, or that is being replaced with a newer model," Practical eCommerce added. "Any of these types of items may be 'troubled,' and it is often best to get rid of troubled items even at a loss."
At the same time, deep discounts got many retailers into financial trouble last holiday season, with several blaming aggressive 2012 sales for their failure to meet fourth-quarter expectations. Deep discounts can and should be used to create excitement for post-holiday sales, but it's crucial that retailers carefully consider what they're discounting so they don't end up suffering losses.
As is the case when it comes to any sale, retailers need real-time information to help guide their strategies. This means using eCommerce software solutions to help consolidate inventory and order information across channels, which can provide merchants with the necessary transparency to avoid losses and create a compelling shopping experience for customers.