Board retailers, even more so than other specialty stores, tend to have extremely loyal client bases. It’s a blessing, with a small spritz of a curse: the more often they come in, the more “same old” they see. So with your best customers visiting multiple times a season, engaging them with fresh and stimulating products and experiences carries a lot of weight. High sales are great, sure, but high sell-through and margin are two inventory performance metrics that are most telling of the health of your business—and the satisfaction of your customers.
Let’s back up: What is sell-through?
Sell‐through = units sold / initial units received x 100
Or, a percentage that compares the amount of inventory a retailer receives against what is actually sold within a specific time period.
If your reports are showing a low sell‐through—say, less than 30% over 3-4 weeks*—on certain items, brands or even full categories, then it’s time to take action to move the merchandise before it becomes even less fresh.
When product is slow, retailers often resort to markdowns as the default mechanism, but doing so means your margin will take a hit. Yet when your point of sale doubles as your inventory management system, its reporting can provide intel that will allow you to push under‐performing products through other techniques. We’d wager there isn’t a single retailer out there who hasn’t made a handful of poor buying decisions, so here are a few tactics that the savvy ones use when such happens.
*You may have different optimal selling periods for different categories or even store locations—more on determining these benchmarks later!
Request a Swap
Historically, retailers would engage in “set it and forget it” seasonal assortment planning, and vendors would dictate buying terms. Today the retailer is in control. Armed with sales data, you can share it with vendors to negotiate better terms and pricing up front, then swaps or returns when the brand or particular items aren’t moving. After all, they want to see high performance as much as you do.
Don’t be afraid to mix things up mid-season—keeping an eye on trends in your sales data and being able to pivot quickly when things aren’t selling (or are selling quicker than your initial buy can keep up with!) will prevent you from leaving dollars on the table.
Markdowns
Discounting isn’t completely off limits, but while they are a quick way to improve inventory turnover, create cash, keep fresh goods flowing and correct buying mistakes, markdowns should solve problems—not create new ones. So before you start doing mass discounting at a percentage that sounds attractive to you, calculate just how much of a hit your margin is going to take once it’s stickered with a sale number.
That being said, make it simple for customers by stickering items with the new price, even if it’s a temporary promotion (would you really want to do math while shopping?). While this adds an extra layer of manual work, it’s proven to increase conversion. Don’t bother re-stickering with a new barcode; your POS should be the source of truth and once the item is scanned at checkout, the discount will be applied automatically.
In‐Store Events
As social distancing regulations are lifted, we’re likely to see a grand return to one of retail’s favorite marketing tactics: events. Engaging your vendors for things like trunk shows is one strategy for highlighting a brand that could use a little love. In exchange for the extra exposure you’ll be giving them, they should be willing to offer your customers a free gift with purchase or additional perk to incentivize sales.
Store too small to be hosting in-person events any time soon? Digital trunks shows can be just as effective. Temporarily dedicate a chunk of homepage real estate to the brand and hold the vendor to a certain amount of promotion through their own social media accounts to drive additional traffic.
Keep a few things in mind as you watch your sell-through data and make pivots when necessary: Every business is unique, and it’s normal for different inventory categories to have different shelf lives. When you need a product, particularly hardgoods, to last you through a season, you don’t want to see a high sell-through too quickly! Having comparison metrics to benchmark against, including optimal selling period and time of year, is essential to agility, and the more data you collect over time, the better understanding of your inventory demand and shelf life you will have.
Heartland Retail is a powerful cloud POS and retail management platform designed for retailers, by retailers. With robust inventory, order, promotions, tax, reporting and customer management tools, the software is easy to use, easy to deploy and delivers actionable real-time data across the entire enterprise. Watch a demo or schedule a consultation to learn how our platform addresses the unique needs of board specialty retailers.
BRA note: We are very pleased to mention that Heartland Retail is a BRA Supporting Vendor Partner who is currently offering an exclusive promotion for all BRA Distinguished Retail Members. Be sure to mention BRA when connecting with Jonathan and the good people behind this outstanding resource.
– Doug Works, Executive Director BRA
If you are not yet a BRA Retail Member, you can easily opt in to either Regular (no cost) or Distinguished ($99/yr.) Membership via this super simple join form