Residential Lighting: What is the main impetus to hold a sales event?
Chris Lynch: About 60 percent of our work is
for retailers remaining in business, who want to remerchandise, remodel, relocate or reduce inventory. The other 40 percent is for
those who want to close stores, consolidate merchandise or go out of business and retire.
RL: Is there a best time?
CL: We find consumers are more likely to spend a higher percentage of their disposable income in the fourth quarter.
RL: What’s involved in the preparation?
CL: We need one month’s time. We contact newspapers and radio and TV stations and get their rates. Then we create an advertising budget. We take a percentage of the projected gross sales—from 5 to 7 percent of what we feel the sale can generate—and allocate that for the sale period. We send a sales coordinator to the store a week ahead of time to get everything up and running.
You want to make sure you have the time and the inclination to run the event. If you and your staff can’t devote 100 percent of your time, it’s probably not going to create the results that you want. Also be sure to target designers and decorators. Include them in private sale days—two or three days at the start for mailing-list customers, professionals and other preferred shoppers who get a first crack at everything.
RL: What are some key strategies?
CL: The most important thing is to offer legitimate bargains. You can’t raise your prices in
order to lower them for this type of sale. Just change the look of the advertising to pique people’s interest and have a drawing for a shopping spree. That allows you to get publicity in your local paper when, say, Mrs. Smith wins a $1,000 shopping spree from ABC Lighting.
As far as advertising goes, even though electronic media have come into play, we still do the bulk of our advertising in print media—newspaper and direct mail—to kick off the event. Direct mail is very important because it’s cost-effective.
|Keys to Sales Event Success
• Time it for the fourth quarter.
RL: What’s the optimal duration?
CL: A store that does $1 million worth of business in a year should go five weeks or 30 days. A store that does less than $1 million a year should run a three-week sale. We don’t recommend any shorter durations, since you put so much time and effort into tagging the inventory, closing the store to gear up and running all of the ads.
RL: Any final tips?
CL: You don’t want to hold them too frequently; I’d say once every 18 months is believable. With sales like this, have signs in all the windows custom-designed for the event. Have a title for your sale—not just “Clearance Sale.” Give the actual reason, which may involve a remodeling or inventory-reduction campaign. Then dress up the store inside and out, and you’ll get plenty of eager buyers.
Chris Lynch is co-CEO of Daniel Lynch Sales Co. Inc., a Grand Rapids, MI-based firm that manages sales promotions for mid- to high-end retailers in North America and the U.K. Lynch runs the company’s Miami media planning office.