The Right Way to Run a Store Promotion

Retailers big and small are looking for ways to move this season’s inventory to generate cash to survive. But its still important to design retail deals that will help, not hurt, your business. 

The Dance Bag’s pointe shoe decorating contest is a popular annual store event that’s part of its spring sale. Owner Holly Bertucci was able to adapt it to work remotely this year. Photo courtesy of The Dance Bag

You may be tempted now more than ever to offer steep discounts or added value to purchases to drive sales while your store is closed and stay-at-home orders are in place. Even luxury apparel retailers that rarely discount are resorting to markdowns to clear their unsold spring inventory. And consumers’ inboxes are flooded with messages for free shipping, percentages or dollars off, rewards for frequent purchase, BOGO (buy one, get one free), contests, coupons and multi-buys (two for the price of one).

Sales promotions like these can help clear away merchandise that’s getting staler by the day as it sits on the shelves in your closed store. But even now, promotional events that are not run wisely can have a negative impact on your store’s reputation and your bottom line. It remains true that when smaller retailers overuse discounting, there is a danger that customers will become accustomed to paying a discounted price and be hard to convince to buy anything from you at full price—even when discretionary spending picks back up. Instead, The Business of Fashion recommends “a strategic approach to discounting, where fire-sale reactions are traded for a disciplined attitude [that] could help brands fare the crisis.” 

Secrets of Successful Promotions

That’s why the foundational elements of a successful promotion hold true even during these challenging times—with one main caveat, says retail strategist Georganne Bender, of Kizer & Bender. “A lot depends on people coming into your store, and right now people can’t come to your store.”  Still, by planning ahead, thinking creatively, properly tracking results, and offering promotional sales and virtual events that target the correct clients, you can mimic some of the benefits of in-store promotions and avoid doing damage to your business. Stay true to these principles, but remain flexible and open to adapt and you will survive.

Learn to adapt.

Holly Bertucci, owner of The Dance Bag in Modesto, CA, runs a spring sale each April. It’s one of the annual events that her customers look forward to—and a source of revenue she depends on. Bertucci says that once she realized she would be forced to close her store, she reached out to her POS system, Lightspeed, and signed up for an e-commerce site. “Quickly—in four days—I set up our online selling,” she says. “We’ve been wanting to do that for a long time and just hadn’t bit the bullet.” She was able to use images and product descriptions from vendors’ websites for almost every product in stock. “I went to their websites and got approval to use what they use,” she says. And certain manufacturers who don’t usually allow online sales of their products made an exception because of the stay-at-home order.

With The Dance Bag’s new site in place, Bertucci was able to hold her annual spring sale, which features 20 percent off dancewear, shoes and accessories. While this year’s event was not as successful as those in past years, Bertucci says she was able to bring in money to cover the rent and other bills.

Even before her big spring sale, Bertucci ran a quick promotion to boost revenues. “We offered a code for 15 percent off when we first launched the new website,” she adds. “I just needed to get some revenue in. Starting in the first week of March, we were already pretty slow and I needed to be able to get an April rent payment made. Our location didn’t allow any type of break for us, so it was a little stressful making sure we had enough for rent.” 

If you do need cash, Bender suggests marking down seasonal items, like new fashion arrivals and spring-themed gift items that you can’t sell once your store reopens. Hold off on discounting basics, like dress-code items and tights. If you have any “evergreen” holiday or seasonal merchandise you’re pretty sure you can sell at full price next year, you might consider packing that merchandise away.  

Make a plan and track results.

Think through your promotions now the same way you would any other time. “If you’re going to be successful, you need to have a plan,” says Bender. Create a content calendar for social media and map out weekly Facebook Live sessions and e-mail blasts, which are the best ways to connect with your customer base. 

Being able to reproduce all the elements of a successful promotion is important—if you want to duplicate that success in the future. Take detailed notes on how well each promotion or post works. Whether on paper or through your point-of-sale (POS) system, Bender says, all retailers should be describing each promotion, how much revenue and profit each one generated, how many new or returning customers shopped and what they bought. “Keep notes on what you did so you can look back on it,” she adds. “If you are just going off memory, you will have no idea what happened.” With these notes, you can build a stronger calendar of events for the next month, and they can also be used to help you shape the next year of promotions as well. Bender also suggests taking photos of all your displays and any signage or social-media graphics that you use for a promotion so you can re-create the ones that do best. 

Promotions used to happen in-store at Dance Depot. Now owner Ashley Kelly has adapted, reaching her customers on Facebook. Photo courtesy of Dance Depot

Ashley Kelly, owner of Dance Depot in South Daytona, FL, can attest to the importance of tracking the results of individual promotions. Two years ago, she started running a gift-card-matching promotion—$10 gift certificates were doubled to $20. The promotion was offered up through $50 for a $100 gift card, and the cards were only redeemable between January 2 and March 31. “It sounds crazy to do,” says Kelly, “but I’m banking on them coming in and spending more than the amount on their cards.”

The first year she ran this promotion, Kelly says that she didn’t keep good records, so she didn’t have a good sense of the results. She decided to run it again this year, and she used her POS system to track when customers came back to redeem their cards, what they bought and how much their sale totaled. Although the redemption period was disrupted by the shutdown, “everyone is spending more than the amount on their cards,” Kelly says. She tweaked her redemption policy to better accommodate everyone. “For those who are unable to come in to use it, I will extend their expiration date for the amount of time we are closed,” she says. The promotion has made a 25 percent profit thus far.

Don’t become too predictable.

Spontaneity is a large component of running successful sales promotions, and now is the perfect time to test this out. If you rely too much on a pattern, customers will learn it and will be trained to wait for the next sale to come around. “If you do a random coupon or a random flash sale on your Facebook page, it will keep them guessing and keep them checking your social media all the time,” Bender says. She adds that filming Facebook Live sessions, where you highlight and discuss the various features of a leotard or dance skirt, say, or how a technique tool works, will help give customers the experience of shopping in your store. You can set up a Shopify account easily or instruct customers to claim items in Comments and send them an invoice. “Facebook is more important than any other social-media site right now, because that’s where the majority of the customers are,” says Bender. 

Kelly, who now uses Facebook to make sales, recently started offering a monthly coupon, but on rotating items. “I promote things, like new yoga tools, that I want to let customers know we carry,” she says. This strategy has helped her continue to move product during the shutdown. Over Easter she highlighted goodies for baskets, leotards and other wellness products. Customers were able to claim items posted on Facebook through Comments, and Kelly packed up orders for curbside pickup or shipping. 

Changing up your inventory to respond to your customers will also help you stay relevant during their time of need. “When Eurotard released its masks, I promoted them through social media right away and sold about 65 masks in the first couple days,” says Kelly. “I am also working with another company that provides masks with really cute prints. I have sold a lot of those.”

Decide on frequency.

Under normal circumstances, Bender suggests holding one major and two minor promotions per month. She defines a major event as one that builds traffic and packs your store with customers. A minor event could be as simple as drawing in customers with bun-making demos, which can be done virtually or on the sales floor once stores are permitted to open again. In light of store closures, she says it is best to get in front of your customers multiple times per week through social media. Plan for weekly videos and weekly e-mail blasts. 

Get creative so you don’t always have to tempt with price cuts.

That frequency may sound like a lot, but consider running promotions that don’t offer a monetary discount. While in-store events like trunk shows and in-store crafts or classes are still the best ways to build buzz, you can offer variations on these events while your physical location remains closed. In fact, going the extra mile to connect with your customers will help build morale during a time when people need it the most. 

This year’s winners of The Dance Bag’s pointe shoe decorating contest—on a Disney theme. Photo courtesy of The Dance Bag

Bertucci runs a pointe shoe decorating contest that coincides with her spring sale each year. This year she made some adjustments to be able to offer customers the same opportunity. “I advertised specific times when we would be available for shoe pickups,” Bertucci says. “They had to e-mail us ahead of time with their name, age and phone number. Then we packed the shoes up and got them ready to hand out.” To help lift customers’ spirits, Bertucci selected Disney as the theme for this year’s contest. “A lot of kids get excited about that and are very familiar with it,” she says. “Most people had stickers or something Disney-related at home already, which I thought would make it a good choice considering our shelter-in-place orders.”

Kelly is taking steps to connect with customers, as well as studios and other local businesses. She partnered with a local store to design a social-distancing T-shirt. “We are doing pre-orders of the shirt and donating $5 back to the dancer’s studio when she buys a shirt,” Kelly says. “This is a way to partner and collaborate with other local businesses to ensure everyone is still standing on the other side of this.”

Libby Basile is a former editor in chief of Dance Retailer News who writes frequently about retail designs, displays and marketing.