To all brand owners, do you have outdated stock gathering dust in your warehouse? Are you letting dollars slip out between your fingers with inventory management? This, as you know, is especially important for small and medium businesses as brands often overlook this aspect in the short run, focusing more on expanding their businesses. Brands often overlook this aspect in the short run, focusing more on expanding their businesses.
We understand that holding inventory is important to reduce the risks of stock-outs (exhausted inventory) and potential loss of sales. However, clearing inventory fast is equally, if not, more important. Here’s our guide to clearing out your inventory fast to lower risk and work the sunken costs to your advantage.
Managing Short-term Losses
Instead of allowing your products to gather dust, slow-moving and out-of-season stock should be cleared out quickly to make room for fast-moving and new season stock. Although you make a loss in the short run, you actually stand to gain long-term. What we forget is that holding onto old stock actually outweighs its costs in the long run. With old stock, they are more susceptible to damage and deterioration. The longer you hold, the less sellable it is. Eventually, it even gets discarded. It is important to keep in mind that money is already invested and spent on these stocks, so aim to sell it at or below cost to recover at least a portion of the initial investment. A friendly reminder that these are already sunken costs. So to help clear out your inventory faster, here are some of the best ways you can go about doing so.
1. Offer a Discount
We’re sure you’re no stranger to offering discounts. Discounts are an easy way to attract customers, especially in Singapore. In fact, we dare say that Singaporeans’ love for sales is so great that discounts can make loyal customers abandon their favourite store – and go to you.
An example would be during last year’s Great Singapore Sale (GSS). Even though it was held online due to the pandemic, the response was overwhelming. Singapore Retailers Association (SRA), reported that its GoSpree platform had more than 200,000 page views during the month-long event – more than 20,000 discount coupons were downloaded, and at least 4,000 redemptions have been made, showing its success in the local scene.
Flash Sales
Sales can come in many forms, such as flash sales, seasonal sales, and even free shipping. This really depends on what type of customers you are attracting. Flash sales target both new and existing shoppers. When flash sales are rare, one-time events, they give customers that extra jolt to act fast and buy now, increasing urgency in customers. The best example would be Shopee in which they has daily and hourly flash deals. It is one of Shopee’s most popular features, garnering tens and thousands of views and clicks on the app. Some of Shopee’s fashion brands that are doing well include Moving Peach, Closet Archive, and Stylehouse. As an existing customer, you would also be one of the firsts to get notified of such a sale via their in-app notifications.
Flash sales allows us to pay it forward to our best customers, while creating the Fear Of Missing Out (FOMO). With a limited time frame and stock, shoppers feel the innate need for your product even more. Hence, they will definitely want to sign up for our email list so that they will not miss future promotions. Flash sales are also a low-stake way for new shoppers to try out products. If they are satisfied, you might have just gotten your next new loyal customer!
Free Shipping
Free shipping can easily sway a shopper’s purchase decision. The reason is straightforward – people appreciate simple pricing structures. This gives you a competitive advantage, especially online. Nowadays, shoppers even expect free shipping. According to recent data from Accent, 88 percent of consumers would be more likely to shop at a site online if they were promised free shipping. It also gives shoppers an incentive to increase their order size if brands impose a minimum spend. At Shopform, we’re launching a free delivery with minimum $50 spend on your first order, app-wide!
Bundling Products
One of the most popular pricing methods used by retailers, it is when you take a group of products and sell them as a bundle for a slightly lower price than if they were sold separately. While you are discounting inventory, this allows you to maintain your margins and profit on a sale. Bundling fast moving items with slow items is a timeless ‘trick’ to clearing inventory fast.
The Paper bunny shows an example of bundling by selling mystery bags full of goodies that are slightly damaged. They are sold at around $30-50 even though the items within are worth up to $100+. On the first day of launch, the bags were instantly sold out, showing its success.
They also do bundling in terms of themes, such as ‘reusable starter bundle’, ‘festive bundle’ or ‘go-getter notebook bundle’. The convenience (they don’t have to search and add items individually into the cart) and cost savings tend to draw their target audience in.
2. Reward Loyal Customers
Point System
We feel that this is one of the best, most long-term ways of clearing inventory fast. The key is targeting long-term customers who are loyal to your brand. Reward customers through a point reward system or through giveaways. A point reward system allows you to reward users with points for various actions they take on your website or app. These include making purchases, writing product reviews, or referring friends. Reward points are exchanged for special deals or discounts on the following purchases.
At Shopform, we use a similar reward system in the form of Shopform coins. When Shopform community members purchase through the app, they get to earn Shopform coins. At the same time, when content creators post on the app, they can tag a specific product that they are wearing. These tags go directly to the item’s checkout page, allowing shoppers to purchase seamlessly within the app. If shoppers buy directly through these content creators’ posts, the content creators earn a commission through the Shopform coins. Once accumulated, Shopform coins can be used to offset future purchases!
Exclusive Membership Perks
These perks can be in the form of exclusive discounts, or exclusive pre-launches. It could even be a free birthday gift or offer! H&M is one of the few fashion brands that does this well. Other than just points, their members get exclusive perks too. They enjoy free online returns, ‘shop now pay later’, birthday offers, and shopping events just for members.
3. Get More Aggressive with Marketing
Involve Content creators
Content creators, or influencers, can help to increase brand exposure on other platforms, such as Instagram or Tik Tok. Did you know that 70% of millennials are highly influenced by micro influencers? Consider using nano influencers if your brand is looking to be more cost effective. Influencer marketing in Singapore can definitely provide a high return on investment (ROI). Influencer marketing with Instagram generates, on average, a revenue of $6.85 per dollar spent on marketing. This enables you to stand out from the crowd and raise greater brand awareness. Check out our two blog posts above for a deeper understanding on just how effective influencer marketing is.
Live Streams
Live streaming has become an increasingly popular feature on social media platforms like Instagram and Facebook. As a medium of shopping, it is more social and interactive which translates to better understanding of product attributes by the consumer. Live streaming allows shoppers to get closer to products and hear someone describe what a product feels, looks or smells like. It’s also a fun and entertaining form of shopping where customers can see people talking about their experience while demonstrating the product. This immediately creates an interest and confidence in the product to purchase.
Local fashion stores like Young Hungry Free (YHF) and Her Velvet Vase (HVV) do live streams on Instagram. Each session, they can garner hundreds of viewers. Shopee, Lazada, Taobao, and Tmall are some of the big merchants that do live streams as well. The chat section of these live streams is filled with supportive comments and interest in the items. Shopform has also picked up this idea and will be starting our own live streams on our Instagram page. We will work with influencers to showcase and style the clothes of our partner brands. Brands can also live stream on the Shopform app to garner interest and users can purchase directly from the app too!
To Sum It Up
Take time to think about an inventory management system that best suits your brand. Offering discounts, rewarding loyal customers, and more aggressive marketing are within our guide to the best ways to clear your inventory fast!
The benefits of clearing inventory fast are faster turnover rates, increased brand loyalty, awareness, and higher profit in the long run. Shopform is one platform that is able to fulfill these for up and coming digital native brands to gain greater exposure in the local market. Drop us an email if you are interested in hopping onboard to try us out!