What's Your Clearance?


EARLY JANUARY IS TYPICALLY SLOW. But some believe that a second, smaller retail wave of purchasing exists, stemming from 1) people using gift cards they received, and 2) people who shop for what they wanted (and did not receive) as gifts. So take advantage of all customers that come through your door during January and February.

In retail, January is the month of the after-holiday sale. All stores post drastic price reductions starting the day after Christmas. Even if customers are coming in to return an item, they can be enticed to re-spend their store credits on other products — and possibly spend more than they planned on purchasing. The idea of saving money is a huge motivator to buy. So plan immediately to offer revolving specials and clearance sales for the month.


Access your post-holiday inventory and determine what you need to move and turn to make room for new products. Evaluate what products are core, and which are seasonal. If you have seasonal products and it's already halfway through the season, give them a push out the door. Establish the level of reduction on your core and seasonal products and mark them down accordingly.

If you have had items on a clearance rack or table for a period of time — six months or more — and they are still there, you need to get them out of your inventory. Take a hint from your customers: If they have seen these products over and over again for the last six months and they still haven't bitten, then these products won't sell. Take these obsolete products to your eBay or e-commerce person to try and move out as bulk salvage buys. As a last resort, check with your accountant for any write-off options.

Clearance sale products need to be separated from your full-price merchandise so that the discounted products don't devalue the new products. Move your sale products to a separate area of the store, and place them on different fixtures such as rounders and sales tables, and bins for smaller items. Tag these items with the sale percentage or price. The sales tag should show the regular price as well as the reduced price to show the savings for the customer. If you are using "percent off" reductions, include a header card on or near the fixture that can help the consumer estimate the amount saved — i.e., "Items 20% Off! Normally $59.99, now $49.99."

Market your clearance sales with less-expensive forms of advertising, to save costs. Make use of your on-hold phone system, your Web site, the local newspaper and your street-side banners. And e-mail your customers.


January is a time for reflection, so reflect on your leftover parts, accessories and apparel. They should teach you some things, so take notes.

Items that you purchased in 2007 and did not move can tell you several things:

  • The product selection was wrong for your customer's taste,
  • The price point of a product was too high,
  • A product may have been poorly placed or merchandised,
  • Or a product may have been something that customers knew little about.

If you reduce prices and reposition these items in your store and they begin to move quickly, then you know price and location were the issues. In marketing classes, people learn the five Rs — right product, right price, right time, right quantity, right size.

Evaluate your leftover sizes and colors — this will show you which sizes and colors went first and which ones are still sitting on the clearance table. From this you can determine the mean and average sizes and color preferences of your customer base. Do this exercise to help you make some better buying decisions come holiday season 2008. (Remember to keep notes so you can refer to them when fall purchasing time arrives.)

Remember that "sale" is not a dirty four-letter word, but one that shoppers love and look for. Celebrate "Sales Month" and move those products — get a return on your investment and free up valuable retail real estate. Each square foot of showroom is a money-making opportunity. If that square footage is loaded with dated, shopworn clearance items, then you're losing money.

Constantly working to move products through visual merchandising, helpful sales associates, and specials and incentives give you fewer clearance products to deal with at the end of the season. So clean house, reduce obsolescence and open up floor space for fresh, new products that will be arriving very soon. Make some good marketing resolutions for 2008.

Christy Michaud is a retail merchandising specialist at Tucker Rocky Distributing. E-mail questions and comments to Michaud via editors@dealernews.com.