As states start to ease COVID restrictions and the flow of retail traffic slowly resumes, many retailers will need to determine what to do with excess inventory. If you’re like most, you may have ample supply of Winter and early Spring products that have not moved much since the pandemic. And, if you’re like seasonal retailers, selling these products may be hard to do with consumers looking forward to Summer and Fall items. So, the natural question becomes… “Should you put your inventory on clearance?”
The answer may depend heavily on how cases rise (or fall) over the next few months. If the downward trend that is anticipated does come to fruition, selling the overstocked items at a discount could help you recoup some lost revenue from months during the lockdown. However, if the second wave of the virus is truly upon us, your excess inventory may be worth holding on to, and selling at full price in a few months, as consumers’ focuses inevitably shift to next Winter as the return to the “new normal”.
However, there are a few key sales and promotion pivots you can make now to help you at least drive sales in the short term.
- Create bundle offers. The uncertainty of the coronavirus has left the world reeling, trying to anticipate what to do next. Doing buy one, get one free campaigns or bundling overstocked items with new items that are selling can be an effective way to move inventory without having to heavily discount it or put it on clearance (and still not have it sell).
- Leverage national promotions. Rumor has it that mega e-commerce retailers like Amazon and Walmart may offer a “Cyber Monday” type virtual event in August to drive traffic to their sites to sell off excess Winter and Spring items. If this does come to fruition, you may see a massive influx of ready-to-buy online consumers that you can tap into to push your own promotions and sales events.
- Donate items to a cause. In the midst of the pandemic, retailers saw a noticeable rise in philanthropic buying, as we call it. Companies that advertised giving products away for free, generally saw an uptick in consumer sales, as consumers were “returning the favor” for the retailer’s generous donation to a cause. Whether you have items that can be donated to those providing COVID relief, to first responders, or to communities in need, this is a way for you to do social good with what you have and promote your efforts to your existing customers.
The key is… you have options. Retailers don’t have to be stuck with excess inventory, especially if you create an agile retargeting plan that will help you tap into the evolving consumer preferences and sentiment through the next few months.