Business Articles

E-mail Article to a FriendPrint ArticleBookmark and Share

Ask the Experts: More key areas to manage in order to move merchandise



Read the article below or download the PDF


By Georganne Bender
By Rich Kizer
Published: November 8, 2016
Downloadable File(s)
Get Adobe Reader
PDF documents require Adobe Reader.
Question: How do I deal with the old merchandise on my store shelves that clogs up my displays?

Answer: Old merchandise is something too many retailers like to pretend doesn’t exist. But you can’t just straighten that old product one more time and hope for the best—you have     to take control, even if it hurts. In the second of two columns, we look at more     key areas you need to manage in order to move ‘em out.



When to take a markdown.
Markdowns are not your en-emy; in fact, it’s smart retailing to ditch the dogs. Stores do not close because they had to take markdowns; this happens when product is not sold fast enough to create the cash flow needed to cover store expenses.

When taken in time, the first markdown is always the cheapest markdown. Clearing out merchandise before the price/value relationship is destroyed is critical—you should mark down items as soon as sales start to slow down.
Let’s say you have an item that’s currently priced at $25 but isn’t selling. If you mark that item down to $19.99, its value goes up in the mind of the customer. If markdowns are not taken in time, it will take much larger discounts to create value. Just ask any apparel retailer who’s trying to sell prom dresses at full price in July. Keep this in mind: Markdowns allow you to maximize your invested dollars. When you get those dollars back, you can reinvest into newer items that will yield higher margins and better inventory turn.

One of your jobs is to be on the lookout for product that’s past its prime, taking markdowns as frequently as necessary to clear the merchandise. Sales on seasonal merchandise should start just before the season ends; waiting until after the season or holiday is over will severely hurt your return. Packing product away for the following year isn’t a good idea either; get the cash out of your investment and keep it working with new, fresh goods.


Where to display markdown merchandise. When you run a sale, run a sale. Display the product near the front of the store or in its     normal home. You can also use your speed-bump displays to house this merchandise during the sale. Highlight the displays with banners or signs created specifically for the sale.

We’ve seen too many clearance areas that look like disaster zones; that’s no way to create value. Clearance items should be merchandised with the same care as regularly priced product. If you’re running a clearance sale, you’ll want to display this product near the front of the store. After the sale, move it to a small, designated clearance area near the rear of the store so that shoppers have to pass through displays of new product to get to it. Clearly sign your clearance area so that shoppers will want to stop and check it out before heading to the cash wrap.


In-store signage.
Signs act as silent salespeople, helping customers when no one is available to help. Women read signs for information; men rely on them to make decisions. And since 70 percent of purchase decisions are made in-store, your signs actually entice shoppers to buy. Your signs must be three things:

1. Easy to read. Use at least a 30-point font so shoppers can see them even without their reading glasses. Use upper- and lowercase letters; all caps is hard for older eyes to read. And besides, some shoppers will think you’re screaming.

2. Easy to understand. Most books, newspapers and magazines use a serif font because this type of font is considered easier to read. (The font you’re reading now is Myriad Pro, a san-serif font.) Times New Roman, Palatino, Georgia, Courier, Bookman and Garamond are popular serif fonts. The offer or item description on the sign must be perfectly clear. Use small, simple words so the sign is easy to scan as shoppers walk by.

3. Professional. Print signs on your computer using neutral-colored paper. (Know what neon paper says to a shopper? It says “This stuff is awful and we can’t give it away.”). Use proper sign holders, not Scotch tape, to display your signs. And unless handwritten signing is part of your brand, don’t do it.


The bottom line? Look at every display in your store as if it’s a pile of cash—because that’s what it is. No matter how much you love it, if a product isn’t selling, it has to go to make room for something that will. Move ’em out!

Related Issues