November 07, 2007

Move That Merch!

If your business is struggling, you're thinking ahead to January, that glorious month of off-price bliss.

You can move excess merchandise when everybody else is moving it.

You can also use the Christmas shopping season as a proxy-clearance season.

Sit down with a finance representative, and somebody from your inventory management team, and run some numbers.

For instance, how much of a lift do you get on free shipping with a hurdle? How much additional lift do you get on free shipping with no hurdle? Expedited shipping? You name it, run the numbers, and see if it is more cost-effective to move merchandise with incentives now, or if it is better to recover pennies on the dollar in January.

This is another place where Multichannel Forensics come into play. You can run a three channel simulation, where your channels are "Christmas/Promo", "Post-Holiday-Sale", and all other time periods. If the long-term value of a Christmas shopper using a promo is greater than a post-holiday-sale customer, use promotions now to clear excess merchandise.