Consumer spending is down and inventory levels are up. In the past year, Nike’s inventory levels increased by 44%. The retail giant isn’t alone, as brands big and small are dealing with excess stock across their product lines. The holiday season brings with it the potential to reduce overstock inventory and make room for new products.
Retailers typically use the performance of previous years to plan their future inventory needs. However, this strategy is less effective this holiday season as predicting demand has become increasingly difficult. The level of uncertainty has created a disconnect between the amount of inventory that brands currently have in stock and the number of products that shoppers are looking to purchase.
With the holiday shopping season coming up, the opportunity is here to move older items. This strategic guide to selling your overstock products will help you get the most out of your excess inventory.
The challenges of overstock
Overstock products can be a major problem for businesses of all sizes. When you have too much inventory, it ties up cash flow and takes up valuable storage space. Additionally, overstock products can become outdated — or even obsolete — which means you may have to sell them at a loss.
At an investor day, Walmart’s U.S. CEO, John Furner, acknowledged that the company would like to “just wish away” most of its excess inventory.
During the holiday season, overstock products can be particularly challenging. Consumers are inundated with marketing messages so getting them to your store requires standing out from the crowd.
Analyzing overstock inventory
To sell overstock during the holiday season, you need to have a clear understanding of what you have on hand. Start by taking an inventory of your overstock products. This will give you a clear picture of what you have to work with.
Next, analyze the data you have on those products. Look at their velocity, as well as their sales history. You may also want to consider factors such as seasonality and consumer trends. This information can help you determine which products are most likely to sell during the holiday season.
Identify the best selling channels
Once you’ve analyzed your overstock inventory, it’s time to identify the best selling channels for those products. There are a variety of channels you can use to sell excess inventory, including:
- Online marketplaces
- Your own website
- Social media platforms
- Email marketing
- Influencer and affiliate marketing
Each of these channels has its own pros and cons. For example, online marketplaces may be more competitive, but they also have a larger audience. On the other hand, your own website may give you more control over the sales process, but it may be more difficult to drive traffic to your site.
Pricing strategies for overstock products
Pricing is a critical factor in selling overstock products. You need to find the right balance between pricing your products competitively and ensuring that you’re making a profit.
Here are some pricing strategies to consider:
- Discounting: This involves offering a percentage off the regular price of your products. Discounts can be a good way to entice customers to buy, but they can also eat into your profit margins.
- Bundling: This involves grouping several products together and selling them as a package deal. Bundling can be a good way to move multiple products at once while also offering customers a discount.
- Clearance sales: This involves selling your products at a deep discount to clear out inventory. Clearance sales can be effective, but they can also be costly if you’re not careful.
Create compelling marketing campaigns
To sell overstock products during the holiday season, you need to get the word out to potential customers. This means creating compelling marketing campaigns that grab their attention.
Here are some marketing strategies to consider:
- Highlight the savings: If you’re offering discounts on your overstock, make sure you’re highlighting those savings in your marketing materials.
- Create urgency: Use language that creates a sense of urgency, such as “limited time only” or “while supplies last.”
- Use eye-catching visuals: Use high-quality images and videos to showcase your products in the best possible light.
- Tell a story: Use storytelling to create an emotional connection with your customers and make your products more memorable.
Leverage social media and email marketing
Social media and email marketing can be powerful tools for promoting your overstock products.
Here are some tips for getting the most out of these channels:
- Use targeted ads: Social media platforms allow you to target your ads to specific demographics, which can help you reach the right audience for your overstock products.
- Create engaging content: Use social media and email to create engaging content that highlights the value of the products you need to move.
- Offer incentives: Use social media and email to offer exclusive discounts or promotions for overstock products to your followers and subscribers.
- Use retargeting: Retargeting ads can be a good way to reach people who have visited your website or shown an interest in your overstock products.
Offer special promotions and discounts
Special promotions and discounts can be a powerful way to entice customers to buy your overstock products.
Here are some ideas to consider:
- Buy one, get one free: This promotion can be a good way to reduce excess inventory by selling multiple of the same products at once.
- Free shipping: 53% of consumers say they shop online because of free shipping, so providing it on overstock products is a good way to move them.
- Limited time offers: Specific discount codes with time-bound exclusions allows online retailers to slash the cost of excess inventory while also creating a sense of urgency around the product.
- Loyalty rewards: Loyalty programs incentivize customers by rewarding them for their purchases. Boost the likelihood of moving overstock inventory by increasing the bonus points given for purchasing that item.
In-session marketing is the fusion of real-time analytics, consumer micro-behaviors, artificial intelligence (AI), and machine learning. The outcome of this data cocktail runs on clickstream data — so no PII required — and leverages every site interaction to understand and act on customer intent.
What’s customer intent? It’s the three segments of purchase propensity that encapsulate every site visit.
- Likely to purchase: This segment is likely to buy from you regardless of being offered a discount.
- Unlikely to purchase: This segment most likely won’t make a purchase even if a discount is presented.
- On-the-fence: This segment is highly influenceable, meaning give them an offer and they’re likely to purchase.
Knowing the intent of every visitor unlocks new opportunities for brands to reduce excess inventory by connecting the customer to the product — without it feeling forced or irrelevant to their journey.
Being able to act on the visit in real-time allows brands to increase the likelihood of selling overstock inventory by highlighting the products that they need to move this holiday season to those who are most likely to be interested.
Monitor and adjust your strategy
As you sell your overstock products, it’s important to monitor your results and make adjustments as needed. This means tracking your sales data, analyzing your marketing campaigns, and making changes to your pricing and promotions.
By monitoring your results and making adjustments, you can optimize your strategy for maximum results. This may involve trying new marketing channels, adjusting your pricing, or tweaking your promotions to better align with your customers’ needs.
Making the most out of overstock inventory is the reality for many brands and retailers today. As the market continues to be in a state of flux, consumer habits will shift in a way that makes it hard to accurately predict demand and manage the supply chain.
Selling overstock products during the holiday season can be challenging, but it’s not impossible. By understanding the challenges of overstock products, analyzing your inventory, and identifying the best selling channels, you can develop a strategy that helps you move those products and make room for new inventory.