Meeting the annual sales target is the goal of every business – but it doesn’t always pan out as planned. Continuous adjustments are almost a guarantee throughout the year, particularly between seasonal consumer shifts.
The key to overcoming these hurdles and still hitting your sales target is your assortment and how you optimise it to drive sales.
In order to ensure you’re on the right track, there are three retail sales strategies that you need to implement now.
#1 Reach Sales Target through Inventory Management
Deep dive into your inventory and identify the volume of products left by ageing – for each category and subcategory. Devising a plan to liquidate aged stock is necessary, especially if those stock are highly-seasonal.
The above chart is an ageing analysis of Zara’s assortment. While the brand maintains healthy inventory levels across most categories, there are risk signals in others.
Stock aged over 120 days make up a sizable portion of Zara’s assortment. If left unmanaged, they could potentially cause overstocking problems in the future.
Even if your inventory is relatively healthy, it is still wise to re-look into current numbers to trim off excess load as Fall approaches. Start by analysing products that have never been discounted and identify slow-sellers to markdown.
Products that have never been discounted are typically top-performers that don’t need to be aided by discounts. However, it’s worth reviewing these aged stock to be aware of any risks.
The Zara dress in the chart above was launched nearly three months ago and has not been replenished or gone out of stock. This performance pales in comparison to other dresses that have never been discounted, which sold out several times.
In this case, Zara should consider discounting the product to prevent overstocking.
#2 Evaluate Newness Levels
While newness is key throughout, it isn’t as prominent at the tail-end of the season. New launches should be kept to a minimum as we edge closer to the fall/winter season. Any new collections should be purposeful and align with the fashion calendar, but not before reviewing the existing assortment.
There are two scenarios that brands and retailers could find themselves in.
Scenario A: You Have an Overstocking Issue
The above chart depicts Fashion Nova’s trade movement. An increase in the new-in count with poor sell-out performance signals an overstocking issue for the fast fashion retailer.
Avoid new launches and look into optimising the existing assortment. Plan for promotions on seasonal products to quickly clear them out before demand subsides.
Drive marketing or PR activations to promote newness. A key event to capitalise on is the upcoming back-to-school period. August also marks the height of summer – the perfect time to push summer edits.
For items with high volumes, it’s best to lower the prices to counter stiff competition. Markdowns are also an option for poor-performing SKUs.
Scenario B: You Have Low or Stable Inventory Levels
From the chart above, it’s clear that Zara’s inventory levels are steady. The fast fashion giant is able to maintain newness while amassing a strong sell-out rate.
In a similar situation, you should still review your internal process and determine next steps to maximise the current assortment – this way you’ll never miss out on an opportunity.
Analyse your assortment to identify the top-performing SKUs. Instead of bringing in entirely new products, negotiate with your vendors for quick replenishments on top-performing pieces.
To boost profits, look for places of opportunities to increase prices on sought-after items. Limited editions or premium-perceived value editions are some possible avenues to explore.
With a stable inventory, there is room for new launches. However, keep collections tight and demand-driven. Refer to your bestsellers as the benchmark when designing new pieces.
#3 Improve Visual Merchandising
The power of visual merchandising should not be underestimated, especially on e-commerce sites. The boom in online shopping recently offers an opportunity for retailers to experiment with visual merchandising.
By displaying each product image according to well-planned themes, it encourages consumers to stay longer, leading to higher chances of conversion.
Take advantage of key social events or holiday seasons to capture consumers’ attention. Missguided curated a ‘Heatwave Edition’ for its Playboy collection, to entice consumers with style inspiration as the UK prepares for an upcoming heatwave.
Marks & Spencer went in a different direction by tying a sales promotion to charity – benefiting the UK’s National Health Service. The British retailer pledged 10% of all purchases from the ‘Rainbow Sale’ toward the nation’s frontliners in the pandemic.
The three tips above are sales strategies that you can implement now, which allow you to hit your sales target indefinitely.
With that said, what else can you do to ensure the process is smoother next year?
Your Sales Strategy Plan for the Future
Yes, it’s never too early to start planning. Setting a sales target review now, as well as steps to achieve them, helps tremendously. Here are a further two steps to consider.
#4 Set New Sales Target
While it may seem like an obvious point, many companies often forego this step. Setting a sales target ensures the team is on the right track. While you should focus on hitting (or exceeding) your goals, it’s equally important to plan for the future. If you don’t have a sales strategy set for next year, it’s time to start now.
When planning for your next sales target, ensure they are realistic, timely and specific. This way, you’ll be able to gauge the current situation and define the next steps. The common factors to consider are:
- Historical sales data: how did your brand perform over the years?
- Product promotions or marketing activations: what were the best (or worst) performing promotions?
- Assortment mix: should you bring in more premium lines or venture into other collaborations?
Utilise data to uncover not only your own strengths and weaknesses but broader fashion market insights on your competitors’ position to outline opportunities.
#5 Review Lessons Learnt
A great way to learn and grow is to review past performances, especially in the second half of the year. Your spring/summer performance is an indicator of your brand’s most current standing.
Has your speed to sell-out improved? Did you stock up too much? What are consumers buying from me – and what are they not?
Past lessons may be painful to re-live, especially if the numbers aren’t growing, but it’s important to discuss it openly and find areas to improve.
With these handy tips and tricks, you’ll be on your way to achieving the sales target that you’ve set out for.