sportstyle

sportstylemag.com • sportstyle May/June 2023 • 15 budget) with limitations for how much in aggregated markdowns can occur annually in order to meet the gross profit dollar goals of the business. • A retail business also has fixed and limited expenses and thinking about those in relation to gross profit goals in conjunction with the markdown budget helps the business manage goals, expectations and profits. Setting the Price for Profitability CLEARANCE PRICING should be set to produce the highest per item and aggregate margins on the goods in question. The question is "What is the maximum price you can price these goods at today to sell within a reasonable period of time?" CLEARANCE PRICING on individual items should not confuse customers! It should be straight-forward, easily understood and easily calculatable. People have debated this for years, but I simply don't care that much anymore (since I retired to the position of Grumpy Old Man) whether you use percentages or dollars. • I think dollars make more sense, but if you disagree with me (you shouldn't), march forth with your plan and execute your event. If you believe customers can calculate percentages (they can't!), move ahead cautiously. • If you still think it is better to use percentages, go ahead and do what you want. ey work some of the time, I agree... but it depends on the situation. Changing it up and moving back and forth between dollars and percentages probably works the best. Next week's event needs to entice this week's customer to make a return trip. • Whatever you do, make sure the customer understands what the "deal" really is. 2. MARKETING Marketing is an important aspect of the Clearance Strategy that is cultivated by trial and error. e process of developing a marketing plan to move clearance merchandise will include significant thought to who your clearance customer is, how to entice them, content and layout of advertising and execution of your marketing plan. • Your "offer" should be BIG AND BOLD and STAND OUT in order to effectively EXCITE the prospective customer. If you fail on this assignment, you now need to find replacement customers for those transactions you allow to slip through your fingers. Everyone in your organization, from your buyer to your manager to your stock clerk plays a critical role and anyone of them (including you) can mess up a good theme. • Your Director of Marketing (that might be you) needs to understand that marketing a sale is about creating BIG VALUE in the prospective customer's mind — enough to a) get them off of their couch and headed to your store, and b) get their wallet out and ready to be charging up A STORM! You want them leaving your store with the maximum transaction that they'll be happy with when they get home. And… you can't do that if you confuse them. 3. POINT OF SALE EXECUTION On the selling floor, you have these concerns to think about and execute proficiently: • Presentation (Signage, Display, Ticketing) • Salesmanship Presentation / Key points 1. Presentation/Display of Clearance Merchandise • Key components of Display • Clearance merchandise should be presented in a manner which: • Either stack shoes by brand or style (my preferred method) or by size (sometimes a big fat mess). • Plan for maximum shopping convenience for the customer to select and make a decision. If it is hard for the consumer but easy for you, rethink it! • Give consideration of how to set varying price points and thought to how that might confuse the customer or if it confuses the customer. • Reduces (if possible) creation of mis-mates. • Tidying up oen is a requirement – there is a rare customer who likes chaos. I suggest it is distracting and will reduce your sales and increase your mismates. 2. Proper ticketing • Proper Ticketing is comprised of this main component: CLARITY Our recent experience… My wife and I went out to dinner with friends in early February. Since the restaurant we were so looking forward to visiting wasn't open till 5 pm and we were early (a condition of getting old and being semi-retired is eating dinner early)… we occupied ourselves with a trip a retail store. My wife, Annette, aer 43 years, has finally become my regular dinner date and she is equally interested in good retailing (or she sometimes pretends to be just for my benefit) …or what passes for good retailing these days. So, we took the opportunity and visited REI next door to the restaurant. I am not sure the last time I was in an REI but it could have been 20 years ago on some vacation, looking for ski clothing I think in Colorado. We took a look around the so goods assortment upstairs. Your merchandising strategy should include planning for profitability. This will help your company maintain the highest gross profit margin ratios you can possibly achieve and in order to make that happen, you need to execute a plan with a focus on controlling markdowns.

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