Episode 506
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[00:00:00] Boxing Day, the day after Christmas, and in many countries, the first day of the post-Christmas sales. Now, even if you don't call it Boxing Day, most of you listening will know that as soon as Christmas is over, the next round of promotions and sales and discounts starts. So, Christmas is done, the wrapping paper is in the bin, the leftovers are in the fridge, and you, my friend, as a business owner are thinking about your stock room.

Probably thinking, okay, Christmas is done. Time to get everything out. Time to discount everything and get rid of that stock. But wait, because what I'm about to tell you in this episode could be the difference between starting the new year with really healthy margins and starting to wonder where all of your December profits went.

Welcome back to the Bringing Business to Retail show. I'm Selena and I, and my mission is to give you the strategies and the solutions to make you more money in your retail or e-commerce business. The biggest mistake that I [00:01:00] see retailers make year after year after year is treating Boxing Day or those sales after Christmas.

Just bear with me here. Call it Boxing Day, because that's what we call it here in Australia. I know that you have it in Canada. Just go with me. When I say Boxing Day, I mean post Christmas sales. So one of the biggest mistakes I see retailers make is treating those Boxing Day sales like a fire sale and everything must go 50, 70, 90% off storewide.

And look, I get it because I am constantly harping on about making sure that your stock is gone, making sure that your sell through rate is less than 90 days, and every day that it sits on your shelf, it costs you money. You've got stock to move. You've been listening to me, it has to go. You've got cash flow that you need to think about and you want to start January fresh.

But here's the thing. Desperate discounting on Boxing Day can really undo all of the hard work that you've done in December. You can [00:02:00] literally end up giving back all of your profits in those post-Christmas sales if you are not careful. So today I am gonna show you how to discount smart. Is that an oxymoron?

Can those two words go together? Discount and smart had a discount. Smart on Boxing Day instead of discounting desperately because there is a massive difference between the two. Are you ready? All righty. Let's dive in. Let's talk about what usually happens. December 26 rolls around. You have been flat out for weeks, if not months, and you are exhausted and rightfully so, but you look around your store, you look around your hair house, and you see stock everywhere.

Maybe it's those leftovers from Christmas. Maybe it's the stuff that didn't sell as well as you hoped, and all too quickly the panic can start to creep in. I've literally had people say to me, Sal, you are in the back of my head saying that stock has to go. That stock has to move, which is fantastic that this message is getting through.[00:03:00]

But we don't panic here. Okay, my friends, yes, we're going to move the stock, but we are going to do it with strategy. So I'm gonna give you a framework for your Boxing Day slash post Christmas sales. You ready? Alrighty. Step one. The biggest thing I want you to do is look at your stock. We're going to segment these into three different buckets because I don't want you doing a 30% off storewide sale.

No, no, no, no, no. We're not gonna do that because not all stock is created equal. You do not have to treat inventory, all the inventory the same. So we're going to have three buckets, bucket a. That is the dead stock. That is the holiday stuck. That is the stuff that has been sitting for months or it has a used by date.

Christmas has been and gone. It has to go. None of this putting it back in the stock room for next year. No, no, no. We are getting that gone. It might be stuff that you've tried to sell. Hmm. Didn't [00:04:00] move so well. It is taking up space. It is tying up your cash. Now this is what you discount heavily. I call it the kill price.

What is the price we need to have to get it gone? That could be 50%, 60%, even 70%. I know sales don't normally say this. But we need that stock gone. This is the dead stock and the holiday stock. The goal here is to get it out the door to free up cash and to free up space. Okay? That's bucket A. Bucket B. These are your more slow moving products.

Products that sold okay, but maybe not as well as you'd hoped. Maybe not as quickly as you'd hoped. They've still got value. They're just not flying off the shelves. You don't want to replace them. But you also don't wanna discount them really heavily. So for those, I would go in with a moderate discount, maybe in the like 15 to 30%.

It really depends on your margins. You want to move them, [00:05:00] but you don't need to give them away. Okay, so bucket A, the stuff we're discounting heavily, dead stock, holiday stock, bucket B, those things that are moving slower than we like. And then bucket C is your hero products and your new stock. These are your bestsellers.

These are high margin products. These are products that bring people in the door. Anything that you've recently brought in, we're not discounting those. I would either not discount them at all, or if you do maybe a really teeny, tidy discount, but personally, if this stuff is already moving, I'm not discounting it when it comes to postseason because these products don't need a discount to sell.

We could try some different product. Variations. We could try some gifts with purchase or some bundling, but if we already know they're selling them, let's just leave them in bucket C. People are coming in and buy them anyway. Okay? Bucket A is our holiday and our dead stock. Bucket B is our slow moving stock.

And then bucket C, the stuff we're not discounting. That's our [00:06:00] hero products and our new stock. So when you segment like this, you protect your margin on the products that don't need aggressive discounting. And you clear up their dead weight without tanking your overall profitability. Okay, step one, segment products.

Step two, use. This is a little bit sneaky. My friends use post-holiday sales to get people to cash in their gift vouchers. Now, here is something that most people miss Boxing Day and those post-Christmas sales isn't just about clearing stock. It is also a massive customer acquisition opportunity. Think about it.

There are people with gift cards that are burning a hole in their pocket. There are people who got cash for Christmas and they want to spend it. There are people who are in shopping mode, and best of all, if we can get those gift cards that were bought as Christmas presents back and redeemed, they're no longer a liability on your line sheet, my friend.

We can write them off fast. I do [00:07:00] not want gift cards being on your liability on your profit and loss for very long. I want those redeemed as quick as possible, so I would. Pick a handful of entry level products. So these are products with really good margins that represent what it is your store does well or what it is your brand does well, and I would position those specifically to gift card holders to spend.

These are your acquisition products. So then once they're in the door, or once they're on your website, we can upsell them. We can show them the hero products at full price, or we can show them a bundle. We can create different offers for them, but we gotta get them back in the door. So do you have a campaign that gets people to redeem their gift cards?

This is so super sneaky and not enough retailers do it. You know, I always use candles as my examples, so you might have a specific range of candles at [00:08:00] 30% off for gift card holders. Now those candles are your entry product, something that has a decent margin and high turnover. People come for the candles, but then you sell 'em the cushions or the throws or the tableware at full price.

So the candles get them in the door and the other products drive the profit. This is a campaign strategy that I do not know why more retailers don't use, but it is smart. It gets those gift cards off your liability sheet. It gets people back in the door. It gets you to move your stock, and it protects your margins.

So step one, we're segmenting step two. I want you to think about whether you can use some kind of campaign to get those gift card holders, or if you haven't done gift cards before Christmas, how can you get people who are cashed up or those, you know, people who got cash for Christmas? How can we get them to come in and buy?

And step three I, you know what we're talking about, these people who are cashed up. I don't see enough [00:09:00] Treat yourself campaigns. So there is a mindset shift when it comes to post Christmas and Boxing Day. It doesn't have to be about clearances. I know the big box stores do it, but it could be for your brand about self gifting.

Think about it, people have just spent the last few weeks or maybe even couple of months buying for everybody else. Now, I don't know about you, but it's really easy to not get what you want for Christmas. Now, maybe they had something on their wishlist, maybe they got some cash, or maybe they're just like, you know what?

I really wanted it and no one gave it to me, so I'm gonna buy it for myself. Maybe instead of shouting, clearance and everything must go and heavily discounted, which you know, could be. It could feel a little bit desperate. Maybe you could position it as you know what, you've done the giving. Now it is time to treat yourself.

We actually ran this campaign once, which was like something along the lines of, didn't get what you wanted for Christmas. Come in and get it yourself. And so [00:10:00] we had a wishlist function on our website. So if it was on your wishlist, we gave a small discount. It was a little bit of a faf to kind of work around.

But it's the kind of thing that gets people back in the door. If you run a campaign around self-care or self reward or starting the new route year, right? You could offer a discount. You could offer a gift with purchase, or if you have those gift card, oh, let's tie these two together. This just came to me.

We could tie this with the gift card holders and offer them. Like a 110% trade-in value. So for example, if they have a hundred dollars gift card, they can redeem $110. Now that is what a 9% discount for you. But the value that the customer perceives is far more than that, and that's what we want. We want high perceived value.

More money in our pockets make this about the customer treating themselves. Not about you clearing old stock. Now, this works especially well if you sell things like [00:11:00] beauty or fashion or wellness or lifestyle products. Frame it as an investment in themselves for the new year. So that's all the things we are going to do.

Let's talk about what we're not going to do on Boxing Day and the post-Christmas sales, because these are the mistakes that I do see coming up. So mistake number one is discounting those hero products just because everybody else is discounting your best. Sellers do not need a massive discount if they sell well at full price.

Leave them that way. Don't give away your margin if you don't have to, just because you feel like you need to compete with somebody else. Mistake number two, not having a plan. If you wake up post Christmas and you are still deciding on what to discount, what to get rid of. What kind of campaign you should be running, then you've already lost.

You need to plan this in advance. You need to plan this now. Decide what is going into each bucket. Get your signage ready, brief your team. Make sure you've got all of the campaign assets ready. [00:12:00] Know your strategy before you get to this point in the retail year. Okay? Mistake number three, looking at what your competitors are doing and then thinking that you should be doing it.

I cannot tell you how many times I have people come to me and say, we are doing 60% off because our competitors are doing it. Just because the store down the road is doing 60% off doesn't mean that you have to. You are not them. Your customers aren't necessarily their customers. Your margins aren't their margins, so please stick to your strategy for your business.

Mistake number four, if you're a bricks and mortar store, forgetting about online. If you've got an e-commerce store, your Boxing Day sale needs to work just as well online as it does in store. Make sure that your website can handle the traffic. Make sure your offers are really clear. Make sure that all the pricing has been updated, and make sure that you are promoting it well.[00:13:00]

Alrighty, let's recap your action steps before the Boxing Day slash post-Christmas sales hits. Number one, segment your stock into three stock buckets. I want dead and holiday stock, slow movers and hero products. Then you're going to assign a discount level or a promotion strategy for each bucket. You know what?

You may not even promote the best sellers. You might just promote the stuff you're trying to move. Step number two, pick your customer acquisition products. So what are you going to use to bring in new customers or to get those gift card holders to redeem fast? Make sure they are good margin products that represent your brand and your store well.

Step number three, decide on your positioning. Are you going clearance? Are you going treat yourself? Are you gonna do all of the things as long as you have the resources to do it? Whatever you choose, commit to it. Step number four, get your marketing strategy ready. Your emails, your social posts, your window displays, your in-store [00:14:00] signage.

Make sure that people will know what you are offering and why it's worth showing up. And here's the most important thing. Take a deep breath. You gotta know your numbers. Know what discount you can afford to give and still make a profit or what that discount is going to do to your bottom line. Don't just pick a percentage because it sounds good.

If you need help with the math, you know that I've got you. When it comes to discounting, you can grab my free calculator, which will show you just how low you can afford to go. When it comes to discounting, grab it for free over at selena knight.com/discount. Look, boxing Day and post-Christmas can be an absolute goldmine or it could be a money pit.

The difference comes down to strategy. If you discount smart, if you segment your stock, if you protect those hero products, and if you use an acquisition strategy and maybe bundle your products or make sure that you have offers, that you are really [00:15:00] clear on what you're going to promote and why you are promoting it and what your outcome is, then you've got a much better chance of making a profit or clearing that stock out.

So no panicking. Don't copy what everyone else is doing. Stick to your strategy and make Boxing Day and post-Christmas work for you, not against you. All righty. That's it for today. Now go and plan your Boxing Day strategy and grab your free discount calculator over at selena knight.com/discount, and I will see you on the next episode.

So that's a wrap. I'd love to hear what insight you've gotten from this episode and how you're going to put it into action. If you're a social kind of person, follow me at the Selena Knight and make sure to leave a comment and let me know. And if this episode made you think a little bit differently or gave you some inspiration.

Or perhaps gave you the kick that you needed to take action, then please take a couple of [00:16:00] minutes to leave me a review on your platform of choice, because the more reviews the show gets, the more independent retail and e-commerce stores just like yours, that we can help to scale. And when that happens, it's a win for you, a win for your community, and a win for your customers.

I'll see you on the next episode.