Clearance sales are promotional events where retailers mark down prices on select products to clear out inventory quickly. These sales can occur in-store or online and often happen at the end of a season, or when retailers need to make room for new product lines.
The primary purpose of a clearance sale is to get rid of excess merchandise that is taking up space in stores or warehouses. This excess inventory may be items that did not sell as well as expected during regular selling seasons, overstocked goods from manufacturer purchases, or outdated styles and designs.
To increase traffic during clearance events, there are several promotion ideas businesses could implement:
During these events, it's essential to minimize stockouts while avoiding overstocks. Retailers must ensure they have enough merchandise available to meet customer demand but don't want leftovers when the sale ends. To help deal with this issue effectively:
There are various methods used in price markdown strategies to keep clearing-off stores’ leftover inventory efficiently while retaining profitability margins such as :
1) Fixed-Money Discount: A fixed monetary value taken off current item cost like $5 off its original price .
2) Percentage Discount: A percentage of original item price is removed from the top like a 50% discount.
3) Two-for-One Promotion: Here, retailers position deals such as "two for the price of one" to pair slow-moving items with fast movers or end up stocking obsolescent products in pairs
4) Progressive Markdowns :By starting with small discounts that increase until everything's gone - this aims to sell lower-value items while retaining higher-margin ones.
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