Managing 50% off sales as part of a promotional mix

From a recent RetailWire panel discussion about those ubiquitous half-off sales all over the retail landscape:

50% off sales have evolved from “once in a blue moon” events to a routine part of most retailers’ promotional arsenal. So the challenge is to use these promotions effectively. Here are some metrics to consider:

1. Do they “traffic” the store?

2. Do they represent a credible value?

3. Can the store successfully “margin out” on 50% off items by sourcing them aggressively with the intention of half-off sales?

The last point is critical: Retailers need to be much more disciplined than in the past about planning and buying 50% off items not as loss-leaders or margin-busters, but as marginally profitable parts of the assortment. It’s a big reason why so many stores have migrated from national brands to private label, in order to drive the “half-off” machine more profitably.

 

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