As we approach the end of financial year, you may be considering running a clearance sale or flash sale (affectionately known as an EOFYS).
There’s the temptation to reduce how much you need to count during your stock-take.
Or to get a few quick sales over the line before having to pay the tax man.
There are many benefits to running an end of financial year sale:
- You can sell off end of season or last season’s stock.
- Clear slow-selling lines or odd or less popular sizes.
- Encourage new customers to trial your products for the first time by retargeting people who have visited specific product pages in your online store.
- Or you can reward existing loyal customers or re-engage lapsed customers who haven’t bought from you in a while.
Read on for the common pitfalls and mistakes, as well as best practices for running an EOFYS.
Pitfalls:
The number one pitfall I see with eCommerce store owners running flash sales is that they run them too frequently.
The outcome of this is that you train customers not to shop with you at full price. They learn to wait because they know another discount will be just around the corner.
The other outcome of this is you lower your profitability. Your profit margins are much lower on sale items, and if you’re offering frequent discounts this will impact your bottom line.
Additionally, by running a clearance sale you also run the risk of attracting people who are discount-hungry and not necessarily your ‘ideal customer’.
This is a consideration many people don’t think about, so you always need to make sure you’re targeting the right audience and build in a plan to on-sell full-priced products to these customers.
Common mistakes
There are three very common mistakes I see with clearance sales, so make sure you’re prepared for these.
1. Slow or delayed shipping. Do not sell ‘pre-orders’ with a long lead-time during a flash sale or end of financial year clearance sale.
2. Not enough stock. Don’t promote your most popular products as the incentive for your clearance sale, if you know you only have a couple of items left.
3. Site crash. If you’re expecting a large influx of website traffic during your sale, make sure you have the bandwidth to cope with it!
Best practices:
So, after all the pitfalls and mistakes, should you still run an end of financial year sale? YES! If you do it well, you’ll gain new revenue and customers in the short and long-term.
Here’s how…
1. Decide on your objective.
Are you targeting existing customers or attracting new customers?
If you’re targeting existing customers, you want to promote the sale to your email list and retarget your email list using Facebook ads.
Ideally, you would segment your email list into lapsed customers (those who haven’t bought in a while), loyal customers (your besties!), and those on your list who have never bought before. Then, tailor the messaging of your sale to suit each of those groups.
If you’re targeting a new audience, you don’t really want to promote the sale to your existing list. Unless you can segment those on your list who have not yet bought yet.
Then you’d promote the sale to a cold audience via your Facebook lookalike audiences, excluding those who’ve purchased from you before.
2. What products are you selling in the sale?
You don’t have to put everything on sale. You may choose to sell off end of season stock, or last season’s stock, or odd sizes you have in popular lines. Or, you may choose to put your entire range on sale.
BUT, I don’t advise launching a new range or putting brand new products on sale during a clearance. This results in cheapening your brand and training your customers to wait for a sale before they buy anything.
3. When, where and how will you sell it?
This sort of promotion should not be run in a “fly by the seat of your pants” fashion!
So make sure you set your clearance sale start and end dates before you begin.
If you’re only offering the sale to an exclusive audience (such as your email list), you may need to set up coupon codes required to redeem the offer on your website.
If you’re promoting the sale to everyone, then just use the ‘sale pricing’ function on your website. (It can be a great conversion tactic to show your full RRP crossed out and then a nice red discount price next to it!)
Lastly, schedule your emails and Facebook ads to run. I always like to include 3 emails in a promotion like this, spread across the promotion period. The follow-up emails tend to convert additional orders than a stand-alone email can produce.
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