After what many have described as the worst winter ever, signs of spring have finally arrived. While that may not mean lasting sunshine and balmy temperatures for a few more weeks, it certainly means that we are finally moving beyond hearing the words “polar vortex.”
Just as seasonal temperatures can easily influence our moods, they can also easily sway our spending habits. Retailers including Walmart and Kohls have reported soft 2014 Q1 figures and many are attributing the decline to Mother Nature. Inclement conditions obviously affect consumers’ willingness to travel but also decrease the desire to shop as mostly all revenue channels are down for Q1.
Now that the worst (hopefully) is behind us, retail marketers must find ways to drive traffic again to accommodate the waning winter numbers. Inventory levels are the highest concern specifically with seasonal merchandise.
It is essential to view short term merchandise strategies while keeping an eye on overall profitability. Before retailers move to liquidation, there are strategic methods to better maintain margin. Product-driven messaging, offers and media mix will be vital in the upcoming weeks to generate revenue.
Below are strategic marketing initiatives that can be utilized to move excess merchandise without moving directly to liquidation:
- Closely evaluate inventory trends and performance daily. With the change in the weather, deep discounts and giveaways may not be necessary as performance may significantly increase with warmer days.
- Add marketing events to provide additional exposure in early Q2.
- Evaluate those media programs that are more flexible in flight times and spend to offset slower Q1 curves.
- Utilize your customer data for high touch, customized messaging.
- Personalized emails provide agility to feature product based messaging and to cross sell complementary items (“if you like pillows, you may also like our selection of throws”) as well as increase overall units.
- Emphasize drive to web or drive to retail messaging to provide consumers quick and efficient ways to your store.
- Utilize alternative promotions, such as BOGO, tiered offers, $ or % off specific product lines. There will be a hit to the overall margin but these promotions tend to yield stronger margin than liquidation or close out prices.
- Create urgency to shop now (i.e. “Today Only”).
- J. Crew recently utilized the urgency in their messaging and applied discounts on selected merchandise as well.
- Build incremental keyword campaigns with different budgetary thresholds for those product lines with high inventory levels.
- Evaluate and test additional media that provides scale and agility like display, affiliates and remarketing where messaging and creative can be customized and product based.
- And last but not least, utilize customized landing pages that directly are tied to the product pages with excess inventory.
These are a few tactics to aid with the declines that Mother Nature has generated for retailers this spring. These short term solutions yield stronger margins than close outs or liquidation. Let’s say farewell to winter and welcome spring new “short term” opportunities.