End of Season Sale Prep Part 2: The Fashion Merchandising Guide

Didn’t think we’d leave all the fun of End of Season Sale to the eCommerce team, did you? With the busiest retail period fast approaching, here’s the second installment of Style Arcade’s expert-led guide to getting EOS sale done right.  In Part 2, we cover how to prep yourselves and your business for success this Silly Season from a merchie’s perspective.

The holiday sales period is upon us! Or is it? Hasn’t it been for a while now? Regardless, if you are already amongst it or about to enter into your own version of the crazy season, having a robust plan for the year-end holiday period should be top of mind. Not just for sales but also for everyone’s professional and personal sanity. That goes for your store teams, warehouse and all of you in the back at HQ.

These are some of our tips and considerations we feel will help to ensure a productive and smoother process to set things up for success this holiday period.

Set your Sales

Fail to plan, plan to fail – an oldie but a goodie and super relevant given the dynamic nature of retail.  You should already have some idea of your sales targets from your budgets, but a regular and formalized re-forecasting process should also be in place to react to the here and now, as well as forecast your business’ future outlook for the next few months ahead.

Rethink your planning cadence

If you are used to planning sales by month, consider slicing this and planning by week. This will be more effective at this time of year, as it will give you opportunities to shift gears and pull levers should trade be softer than planned.  

Planning by week will also support inventory flow for your brick-and-mortar retailers during a time when sales volume is spiked, and managing your labor resource in-store will be heightened to ensure stock makes it on the floor.

Keep it, real people. Make sure the sales targets you set are achievable and within reason.

So wrangle together your team of decision makers and get aligned on what your sales targets will be.  Use the benefit of hindsight by:

1. Checking your plans against last year’s results

2. Then validate your forecasts so they make sense compared to the trends you are seeing right now

3. Look not just at the results, but also at what the strategy was at the time, and

4. Note if there are any learnings you can take away to make this year even more successful

Use sales to inform your stock

Planning sales at the various levels - by channel, category and by item, will form the basis from which you plan out your stocks to support the sales targets you set as a team.  Based on your assumptions and sales plans, you will then be in a position to identify any stock issues that may affect you hitting said targets.

Along with top-line sales revenue, you should also consider profit margin targets and cash flow.  Your stock profile and markdown strategy will have an impact on both which we will cover in the next few sections.

Planning Inventory

Once you have your sales plans in place, make time to ensure that you have the stock to achieve these targets and flag any risks upfront.  Crack those knuckles and put your planning specs on – we’re going hunting!  (For stock that is.)

When assessing your product, you want to look at your stock profile in a few different ways to ensure you have the appropriate product available to fuel the planned sales.  Here are a few key areas to check:

1. Category / Item

For every retailer, a handful of categories/products will drive the majority of sales.  This is why sales planning on Category/Item level is important particularly during peak trade periods.  

When you know what is fuelling sales and have the stock of these key sales drivers, you will be protecting a significant portion of your sales plan.

If not, you run the risk of missing sales due to crucial stock outs.  Unless you have the ability to bring in additional stock of key products quick smart, you will need to adjust your promotional strategy.  Such as find other products that can compensate for those missed sales which may mean taking additional markdowns to move less desirable products, in turn reducing overall profit margin.

2. Channel

If you are planning sales by channel, you should also be planning your inventory by channel.  

Whether you are pureplay online, brick-and-mortar or an omni-channel retailer, best practice is to segment stock by channel.  We go into more depth on the importance of, as well as provide quick tips on inventory management here.Quite often customers are different across channels and so are their tastes, driving the demand for your product in different ways.  Planning by channel will allow you to track performance more effectively and highlight potential stock decisions you may need to make.  (Trust me, it will happen and you will need to decide which channels or stores will get those last few units of a best seller.)

Planning by channel will arm you with the right level of detail to set up your stock allocations appropriately.  

3. Depth and width

Do you have enough of a product offering to advertise your promotion?  You do not want to be accused of misleading customers because your signage and advertising said one thing and it ended up being a different, less compelling offer in-store or online.When coming up with your promotional strategy and designing what your key callouts will be for sale, you first need to understand if you have enough options and volume in those options to be able to make the callouts.

Example: If one of your call outs is ‘Up to 40% off T-shirts’, you need to make sure that the offering at that 40% off is:

1) visible, and

2) lasts an ‘appropriate amount of time’ for the duration of the promo

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There are no clear cut percentages or figures of what this needs to be but a good rule of thumb is at least 10% of your optionality and/or stock volume that is visible to the customer. This is a quick and manageable way to ensure you are covering your business.

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4. Full price and markdown

Are your offers going to be storewide or sitewide? Only selected products and categories? Do you feel the offer is going to be competitive amongst all the other promotions that will be out there?

Be mindful of other retailers particularly if you also have a wholesale channel as some may be inclined to go deeper on deals.  It becomes a race to the bottom with discounting as retailers fight for those price sensitive consumers and keep market share.
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Full price in the form of new products during a sale period is an opportunity and should be used as a margin maximiser during a high traffic period.

Shoppers love a deal but injecting some newness supported with merchandising and marketing can move customers to full price rather than sale, which can help increase your margin.It depends on your markdown strategy for this period and if your sales and inventory goals can support.  After all, balancing markdowns and margin is part of the game.  But don't forget there will also be that full price customer that is looking for something new, not just what a deal on something they have seen for the last few months.

Get your markdown lists done EARLY

Let’s face it, the approval process can take some time.

Time is already at a premium let alone in the last quarter of the calendar year so apply some urgency and get this done in a timely manner.

Get on top of your markdown strategy and check out our top actions for sale. Getting all your ‘ducks’ in a row – retail, digital, brand and marketing teams need to be aligned, aware and able to action to ensure a timely and effective sale preparation process.  Where you can plan ahead, do, as last minute can cause stress and frustration for all those involved.

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Loading pricing – if your systems allow you load pricing early, WINNING. Do yourselves a favor, load and check your holiday pricing nice and early.  Many a merchies’ Christmas has been ruined due to late-night or on-the-day freakouts where pricing hasn’t been pushed to stores or onto websites for Christmas/Boxing Day promos. DO NOT BECOME A STATISTIC.

Warehouse – allocations and online orders

If you are a multi-channel retailer, peak trade means scheduling an increase of stock to stores to support sales.  And from what we have learnt since the world has reopened up post-pandemic, in-person shopping is ramping up.

Getting this right requires understanding the sales volumes in the lead up to sale and what store capacities are to phase stock deliveries properly.  Coordination between retail operations, planning and warehouse/logistics will be important to ensure stock arrives in time and not just sit in a box because it was too close to sale and the retail team is busy serving customers.

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Make sure your warehouse and logistics teams are across the expected increase in volume in store deliveries and online orders.  This isn’t the time for undesired surprises so providing your unit forecasts to support stores and what you expect in the form of online orders will help them prepare.  This will provide an opportunity for the team to flag any risks to fulfilling the volume you are planning to support sales.

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Learn how easy Style Arcade makes it to find the actions you need to take to achieve your sales targets. Get in touch and we'll show you how.