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Markdown Planning and Clearance Strategies for Apparel Retail
- 1. ©Leigha Main 1
January 2016
Apparel Markdown and
Clearance Planning
Association of
Golf Merchandisers
Presented by: Leigha Main
AGM Education Team
- 2. ©Leigha Main 2
The Top 2 Questions Asked in Golf Retail, Perhaps all Retail are:
• What’s New?
• When Does It Go On Sale?
• Ensuring you have good, honest answers to these
2 questions could be the key to your retail
success not only in 2016 but beyond
- 3. ©Leigha Main 3
Disciplined Markdown and Clearance Planning Will Drive Up Your
Maintained Margin and Top Line Sales
Key Benefits Of Good Markdown Planning:
Improve Your Ending
Inventory Position
Improves trust with
customers
Elevates Profile of Retail
Business
Drive Up Top Line Sales
Improve Maintained
Margin
Markdown
Planning
- 4. ©Leigha Main 4
Markdown Planning Is Among the Most Important Retail
Disciplines For The Health Of Your Business
u Markdown planning is an important
part of ensuring your year end profit
will be in dollars not all in inventory
u Good markdown planning will help drive
up maintained margin in fashion, seasonal
based product
u Proper markdown planning will
help elevate the perception of your business
in the eyes of your customers
u Disciplined markdown planning will
mitigate the need for deep
discounting and
extreme clearance efforts
- 5. ©Leigha Main 5
If You’ve Used Any Of These Statements YOU Might In the Way
of Successful Markdown Planning for Your Shop
u “I think my members are going to love what
I bought this season – I don’t think I’ll need
to mark anything down this year”
u “We don’t do markdowns or have a sale
section at our club, it’s a very high profile
club, our members don’t care about price”
u “I’m going to wait and see how I do this
year and then decide how I’ll markdown or
clear if its necessary”
u “This collection was hardly touched I think
I’ll just box it up for next year – It will look
like new”
- 6. ©Leigha Main 6
Markdown Planning Should Be An Annual Task at the Beginning
of Your Season with Some Up Keep Monthly
u The most successful retailers know that planning your markdowns is as
important a part of a successful retail business as planning your arrivals
u I encourage you to plan the markdown trajectory of each delivery prior to it
arriving to your shop ~ the same way you plan where its going visually, and
your promotion to your members/staff you should plan its ‘life’ in its shop
u Put aside 2 hours to catalog the arrivals for your largest receiving season
(March, April, May for instance) and then add as you write additional orders
in season
u Example:
1. Use an X to indicate
arrival
2. Use a 1 with the date
1 (1/10) to indicate the
1st markdown
3. Use a 2 with the date
2 (2/10) to indicate the
2nd markdown
4. Use a C to plan the
clearance
- 7. ©Leigha Main 7
There are a Number of Factors To Consider When Planning Your
Markdown Schedule – Timing, Discount etc.
u Use your calendar, anticipated traffic etc. through the shop to determine the
amount of time a fashion group should stay at full price
u In this example we determined 60 Days was the right amount of
time ~ an average member played 3 times per week meaning in
60 days they had seen the collection 27 times
u Determine the number of markdowns you want your customers to see
through the lifecycle of product in your shop
u In this example we determined we would do 2 markdowns, the
first to 25% off, the 2nd to 50% off. Each level would be for 30
days
u Determine the ‘end of life’ plan for for each fashion group
u In this example we determined that ‘Clearance’ would move
every polo/short to $19.99 and it would remain there until
cleared
No Fashion Item Should Celebrate a
Birthday in Your Shop!
- 8. ©Leigha Main 8
Here is a Sample Markdown Plan – Built With In A Simple Excel
Workbook
u Here is a sample excel workbook used to plan out apparel and footwear
markdowns for a traditional private club
- 9. ©Leigha Main 9
Healthy Margins Can and Will Be Achieved With A Good
Markdown Plan
Ø One of the most common pieces of resistance I hear from a merchandiser, pro,
general manager etc. on their fears and concerns around markdown planning is that
it will drive down their maintained margin ~ I feel strongly good markdown planning
will do the opposite
Ø Sample Maintained Margin Calculation:
- 10. ©Leigha Main 10
Sell Through Tracker: A Tool To Help Isolate Good Selling Sizes,
Silhouettes etc.
Ø Consider using a sell through tracker to help isolate top selling sizes, silhouettes etc.
Ø This simple too can operate as a good companion piece to your POS reporting and/or
to augment any short comings you POS might have on sell through reports
- 11. ©Leigha Main 11
Visual Ideas to Drive Traffic and Move Through Product Quickly
Ø Mark each tag with the ‘new’ price vs. just a % off sign
Ø Ideally in red pen, a colored sticker to help make it easy for a customer to identify
value
Ø Do the math and be specific ~ there is great benefit to marking a tag with ‘ Was $80,
25% off now $37.50’ vs. simply hanging a sign that says ’25% off’ in the section
Ø Sign your markdown section to drive traffic – could include window markers for glass,
painted boxes and/or wood sale letters
- 12. ©Leigha Main 12
End of Season Clearance Is a Healthy, Necessary Step To Clear
Unsold Fashion Merchandise
Ø A ‘Clearance’ Sale should be an annual calendar event to liquidate any unsold
markdowns, merchandise
Ø This should be the last step prior to writing off/donating to charity
Ø It could include a member/customer and/or Friends & Family sale where all items,
regardless of cost are a blanket price $19.99
Ø It should include visual change similar to the hanger tags below to help drive the
visual message
Ø It should include as wide a net as you can cast ~ members, staff, family of staff,
community members etc.
- 13. ©Leigha Main 13
There are 4 Key Ways To Improve Margin In 2016
Ø Adding assortment in long margin categories such as junior
apparel
Ø Adding in long margin, season-less categories like t-shirts,
sweatshirts etc.
Ø Modifying the balance between fashion goods and core/
essential goods to more essential items you carry over year
to year vs. just for a season
Ø Augmenting you buy to earn better embroidery costing, off
invoice volume discounting, rebates
- 14. ©Leigha Main 14
Improving Margin in 2016 – Adding/Augmenting Your
Junior Assortment
Ø Junior golf apparel to include ‘playing age’ juniors (5 years old & up) as well as new
babies being born into the club are both significant sales and margin opportunities
Ø These items should all have long retail lifecycles in your shop (1+ years) simply
needing to be counted and filled in vs. in season markdowns
Ø The ‘season-less’ nature of these goods should enhance margin
Tavistock Country ClubCherry Hill ClubDeer Ridge Golf Club
- 15. ©Leigha Main 15
Consider Adding More Season-Less Product To Your Apparel
Assortment
Ø T-shirts, sweatshirts, casual cottons aren’t season specific so can be a part of your
full priced assortment all year long
Ø Items in this category, similar to things like hats and accessories bare more initial
mark-up than polo’s, shorts etc. and are hard to benchmark off course
- 16. ©Leigha Main 16
Modifying Your Assortment to Include More Essential
Items
Ø Most shops offer good essential polo options for men and often women, considering
augmenting that to include an ‘essential’ ¼ Zip for men, vest for women, bottoms
program for men & women etc.
Ø Key things to ask a vendor when choosing
Ø Expected length of time with that sku – aim for styles that will be in
the line 18+ months
Ø Low Cost/No Cost embroidery – Ideally you would earn n/c low cost
embroidery without any out of line embroidery levels to earn the n/c
embroidery
Ø Look for fashion and core colors – you’ll want an assortment that
include colors other than navy, black and white
Ø Look to choose styles/brands that will help you with a full size run S –
3 XL for men and XS/S – 2XL for women would be ideal
- 17. ©Leigha Main 17
Plan and Communicate Will Equal Success in 2016
Ø Build a Markdown and Clearance Plan With Your Team for 2016
Ø Similar to any change planning, early before the season starts, will
help ensure success
Ø Communicate your plan clearly to all staff members and management
Ø This will hold everyone accountable and help make sure everyone is
bought into the sample goal and process
Ø Consider a new tracking strategy to support your event
Ø Try using the sell through tracker for all women’s fashion in 2016 or
add in a Friends & Family event at the end of your season
Ø Remember no one cares what you paid for it but you
Ø Sometimes things sell better than we thought, sometimes they don’t
~ don’t ‘hold on’ to goods that are selling well or not
Ø Be transparent with your customers on markdown and clearance
activities
Ø Build and practice language for communicating your markdowns to
your customers the same way you do product knowledge buzz words
- 18. ©Leigha Main 18
Thank You To My Fellow AGM Members!
Thank you to all of you and special Thank You to
Desane Blaney who has been a friend and mentor to
me since joining the AGM 15 years ago. I’ve been
lucky to do a number of different thing in golf retail
in the last nearly 20 years – participating in the
AGM is the single most important thing I’ve done to
continue to grow and learn.
Email me: leigha.retail@gmail.com
Call me: 610-247-9809
Follow me @LeighaMain
- 19. ©Leigha Main 19
The Educational Voice in Golf Merchandising
Since 1989
Association of Golf Merchandisers
PO Box 7247 – Phoenix, AZ 85011-7247
www.agmgolf.org – info@agmgolf.org
Phone: 602-604-8250 – Fax: 602-604-8251