Five Minute Friday: Holiday Retail Tip: Promotions vs Sales

Foreign. Business can be a lonely game, but it doesn't have to be. Welcome to Boutique Chat where we explore community over competition and how to scale your company with the balance and the happiness that we all seek. We'll hear from product based businesses of all types, retailers, E commerce and wholesale brands, along with industry experts shaping the future of our industry. I'm your host Ashley Alderson from the Boutique Hub and and I can't wait to chat. Okay. Can I save you a huge amount of stress this holiday season? I hope I can. I want to talk about how you are planning promotions versus sales this holiday season. Now this is why this topic is so important to me. For years and years I have watched retailers completely stress out over what promotions, sales, whatever they're going to run during the holiday season. And ultimately when I ask them, well, how are you deciding, like, what's the goal that you're really chasing? And they'll tell me, well, the goal that I'm chasing is to sell more than I did last year, to have a greater sales number than I did over the holiday season last year. And the danger in that for me when we have this conversation is you can sell as much as you want, but if you've had to sell everything at a discount, are you really left with money in the bank at the end of the season? The goal we should be chasing is not do I sell more than last season? It's do I have more money in the bank than last season? Because I've seen retailers absolutely bust their butts and miss family dinners and miss precious time that they wish they could have back, you know, personally with friends, with family, whatever, over the holiday season because they're busy hustling and working and trying to beat the sales number. And then when they get to, you know, the end of the month, they get to the beginning of January and it comes time to look in the bank and pay that in January, January 15, quarterly tax estimate and they're like, where'd my money go? I worked so hard, I beat my sales goal, but there's literally no money left over for my tax estimate or to order new inventory. And it's a trap that a lot of people fall into. So I really want to invite you this holiday season. And frankly, this is why we have a program at the Boutique Hub. It's a course, it's just a standalone, very quick. It's our shortest, easiest to implement course that we offer. And it's called the Holiday Marketing Masterclass. And the reason we started it was I wanted to Help people with get past this issue and really analyze how are they setting up promotions versus sales and what could they do to set themselves up for success over the holiday season. All the things from marketing to landing pages to sales funnels, to training their staff to sales versus promotions. So I want you just to simply think about it like this. What is going to make me the most profitable at the end of the day? My heart gets so filled when I hear feedback from retailers in January and they say, you know what, Ashley? I sold less than I did last season, but I made more money. And I'm like, hallelujah, Amen. And I didn't have as much leftover inventory that had Santas on it. I mean, we all want to burn Santa at the end of the season because we can't stand seeing the colors any longer or having the Christmas music any longer. So I want to help you get past that. So you're ready to go in January and set the new year up for success. So again, going back to this, I want to set up what is the difference in your mind between a sale and a promotion? So, so I want you to think about sales in two ways. There's an opportunity for an inventory reduction sale, right? I'm overstocked in this certain area. I know I need to move things out in order to create more cash. So I'm putting a certain department on sale and that's fine. That happens from time to time. The other time that we use sales quote, unquote, is markdowns. If I am truly tracking my, my inventory aging report, and I know I have, you know, a certain turn, and let's say for apparel, it's typically about six weeks. I get to this point in six weeks and I haven't sold through two thirds of whatever this inventory is. I need to slash it and put it on sale. So those are the two times that I would really use a sale. Now, the difference in the holiday season is I see some retailers feeling like they have to be freaking Walmart or name that big box store and put the whole site and the whole store 20% off store wide, 40% off store wide. Right. And what happens when we do that is we sell the diamonds with the dirt. We have inventory to sell. We have inventory that needs to move, but we also have new, fresh inventory that really someone would buy at full price. So they come into the store wide sale and they buy the diamonds, the new inventory, and you're still left with the dirt. So that strategy is really tricky. If you were going to do some kind of store wide blanket sale which I highly advise you against. If you were going to do it. The only way to be successful doing it is if you actually pull all the diamonds out of the store but you've lost opportunity, right? You've given them the dirt to shop at a discount but you still have the diamonds and they don't even know you have the diamonds, right? So I want you to be more strategic this season with how you're setting up again, a sale versus the alternative which is a promotion. So when I think about promotions, I think about things like free shipping over a certain amount, a free gift with purchase over a certain amount, swag bags to the first x number of purchases on Black Friday, spin the wheel at checkout, pop the balloon at checkout, the pick the ornament off the tree at checkout, whatever it is, bogo in certain categories or simply hosting events in your space or doing collaborations with others in their space. It is customer acquisition season. Everybody is buying this time of year and so don't get lost in the story that we tell ourselves that people only want to buy when it's on sale because they aren't going to Walmart and Target and Ulta and Sephora, all these other places and only buying what's on sale. They're not begging them for a discount. So don't tell yourself the story that you have to have a discount in order to acquire those customers. So give them a reason to come and shop with you. Make it memorable, make it an experience, make it some kind of January bonus bucks or opportunity to give them a promotion or a perk. But keep your margin longer this season. Don't sell the diamonds with the dirt. Sales versus promotions. And ultimately I want you to have more money in the bank at the end of the season. Not just some arbitrary sales number that you had to take a whole bunch of massive discounts in order to achieve. That's it. Cheers for a more profitable and peaceful holiday season. And if you want more information, you guys, I linked up the holiday marketing masterclass in the show Notes if you want a deep dive on this topic. Otherwise I'll be back with more 5 Minute Friday holiday tip editions. Thanks for tuning in you guys. Thanks for listening guys. I hope you took away all kinds of nuggets and new ideas from this week's episode. Don't forget to subscribe and leave a rating and review. 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