The original version of this piece appeared as a Chain Store Age post.
When retailers find themselves stuck with excess inventory after a holiday, the go-to solution is widespread, dramatic markdowns. But this technique can quickly eat into profit margins, and customers may even be hesitant to buy from the brand full-price.
To solve this problem, brands need to be more strategic with their promotional pricing strategies. Here are three ways to do so:
First, consider how you can emotionally connect with customers in a way that will encourage loyalty after the post-holiday sale ends. Use messaging that appeals to customers’ emotions, recognize the identities of the people shopping the sale, and think about telling a story. When customers feel seen and appreciated, they are more likely to make a full-price purchase or even recommend your brand to family and friends.
Second, consider bundling those hard to sell items with more popular ones for a lower price than the items would cost individually. This allows customers to enjoy price reductions without getting the impression that your brand sells inexpensive, low-quality products.
Finally, try identity marketing, a technique where a brand builds gated offers for specific consumer communities, such as the military or healthcare workers. While a general discount lacks meaning, a gated offer that honors a particular identity makes customers feel recognized. Brands can also tailor gated offers to the target audience. For example, you might offer students and teachers deals on back-to-school items.
The beauty of identity marketing is that it generates a sense of goodwill, thus encouraging customers to not only make that initial purchase but remain loyal. It turns a discount into something much more meaningful and personal.
We can help your retail brand build gated offers that bring in results. SheerID’s Identity Marketing Platform protects your offers from fraud and ensures your customers are getting the best possible experience.