What to do with your excess stock
With retailers hit hard by the global pandemic, many are finding themselves sitting on a mountain of excess stock. Here are six ways to shift inventory and curb costs.
Discount, but do it well
Many retailers have already begun discounting products, and retail analysts expect this to continue over the next few months. However, Debra Templar of retail consultancy The Templar Group emphasises the importance of strategic discounting. First up: don’t call it a flash sale. “Name every sale, and make it specific, so it makes sense to your customers,” says Templar. “Make your sale specific and short and sharp – one day, two days … a week, absolute maximum.”
Think laterally about what will appeal to your customers and try to attach your excess stock to the current situation, making sure your sales have a hook. For example: “Bubble skirt sale: Get ready to resume your nightlife!”
Templar adds that although a lot of smaller retailers can’t ordinarily afford free shipping, “you could offer it for specific items, such as your excess stock”.
Show loyal customers love
Now is the time to reward your top customers, advises Templar. She recommends sending loyal shoppers a 20-per-cent-off link to your website or a voucher to encourage them to spend in-store.
For those running bricks-and-mortar stores, think about gift-wrapping overstock to give VIP customers. “Wrap it so it looks beautiful and keep it out the back. You could even email [top customers] to tell them you have a gift for them when they next come in.” This gesture will encourage loyalty – and hopefully translate to more sales down the track.
Turn to resellers
Elizabeth Renkert of the fashion label We Are Kindred is one of many retailers dealing with excess stock. “We haven’t been as badly affected as many other brands as we’re still quite small,” says Renkert, adding that the brand’s surplus stock is currently being housed in third-party warehouses and at the brand’s headquarters.
She plans to reach out to Chinese daigous – or personal shoppers – who resell to consumers in China and who have become an important part of the business. As China begins to reopen, Renkert expects that one-on-one appointments with daigou will become a key way to shift stock.
Shine a spotlight on seasonal products
As autumn rolls into winter, many retailers are watching merchandise slowly fall out of season. Whether you’re selling woollen jumpers or high-tech juicers, seasonal stock that won’t hold its value should be displayed front and centre – both in-store and online. As lockdown lifts, consider placing seasonal stock near the entrance to your store and near the checkout, and possibly discounted. Online, dedicated pop-up announcements will draw attention to marked-down seasonal merchandise.
Consider contra gifting
Turn excess stock into a social media win by gifting individual products to online influencers. Influencer platform, The Right Fit is currently offering retailers access to its 10,000 influencers for free in order to exchange products for exposure. “[Brands] can list on our marketplace, in the “contra collaboration” section, and then influencers who are interested in just being gifted the product or services receive the product and promote it to their followers. Everyone wins,” says director The Right Fit CEO Taryn Williams.
Paid search and social media campaigns can help shift sale stock, says Erin Morris, director of Young Folks Digital, who is working with a number of clients who have found themselves with excess stock after major retailers have cancelled orders. “It’s really tough, especially for young businesses.”
She recommends building Google Shopping and Facebook advertising campaigns that specifically promote sale stock. “You can group products together in Google Shopping ads to promote certain [sale] collections.” Meanwhile, Facebook ads allow retailers to identify and retarget shoppers who have browsed specific products in the past. “So, you can let them know that [products] are now on sale or down to the last few items so the urgency factor is there.”
Donate directly to charity
Although the ultimate goal when shifting excess stock is to extract as much value from it as possible, it’s also wise to consider whether discounting too heavily will damage your brand.
If this is a possibility, one option is to simply donate excess merchandise to charities, such as Thread Together, which delivers new clothing to Australia’s most disadvantaged communities. “We donate to Dress for Success and the Red Cross,” says Renkert. “There are [designer discount] sites.. but we don’t use them as the margin and discount expectations translate to us giving the stock away. I’d rather the clothes go to people in need.”
Whether you’re in fashion, fitness or homewares, Templar adds it’s vital to focus on your local community. “People knock on your door looking for donations for prizes all through the year, so go to them and offer them your spare stock.”
All references to any registered trademarks are the property of their respective owners. Afterpay does not endorse or recommend any one particular supplier and the information provided is for educational purposes only.