How retailers make the best out of EOSS
How retailers make the best out of EOSS

High inflation has forced the tight pocket customers to wait for end of season sale (EOSS) to grab their favorite shoes and accessories. Well, it is a golden opportunity for retailers as well to clear up the old stock and make the room for new arrivals. In one place it helps the customers in fetching their desired on discounted rates, on other hand it helps the retailers in increasing their footfall in short span.

Once again July season is round the corner and retailers are gearing up for their traditional End of Season Sales (EOSS) in all major Indian cities to cash back the occasion.  Though, it is well tried and tested activity, still not every retailer is able to get leverage from it.

Where some retailers offer discount more steeply or for longer periods than necessary, essentially conditioning consumers to wait for their sales and doing irrevocable damage to their brands. Others will fail to convert new customers.

In fact, some retailers lose loyal customers during their end of season sales because they fail to treat them differently and/or subject their most loyal customers to shopping experiences that are not up to brand standards.

This  article throws light upon the best practices for EOSS that will not only help retailers to avoid big mistakes in the coming season, but also to maximize EOSS footfalls, revenues and inventory-liquidation rates, while gaining (versus losing) brand currency in the process.

Myth: EOSS acts as a magnet for the stores to attract more customers but eventually the major chunk of customers erode the margin and end up purchasing discounted products.

Reality: Retailers typically offer 30 percent to 60 percent discount during EOSS, however our study shows the buyers obtain only 5% to 15% discounts on average. While this positively affects retailer’s revenues, it implies that sale stock will take more effort to move at desired rates.

Two key challenges remain for even top performing EOSS

 Using targeted marketing to map the right promotional schemes to the correct customer segments

 Ensuring that buyers attracted by discounts, purchase non-discounted or premium product categories and that one-time customers make repeat visits to lower costs of  customer acquisition via EOSS The solutions to these challenges are hidden in the customer data that retailers typically capture and other hints that customers leave along their journeys across  different retail channels.


Myths: Customer footfall and revenue during EOSS contribute a higher percentage to your overall revenue.

Reality: While EOSS-related revenue has been increasing, contributions from this  seasonal sale to overall revenues has been dropping consistently, while average levels of discounting have grown substantially. The graphic below depicts the trend  for some of the major apparel brands with over 100 stores in India.

Myth : To make customers spend more, offer higher discounts.

Reality: Retail sales in the western world currently approach 31-33% markdowns overall. In India, markdown rates are much lower at 14-20%. To increase discounting, retailers must also increase base (non-discounted) pricing, which can make products unaffordable, driving more customers to the habit of seeking discounts. This poses a key concern for retailers as offering higher discounts does not seem to be the right path. Trying different and unique concepts becomes the need of the hour.

Myth: Big seasonal sales compensate for the declines in sales and customer volumes that typically precede EOSS.

Reality: The months leading up to the July on-sale period are the most dreaded in the retail business. Revenue numbers plunge by double-digit rates as customers wait for discounts. The reality is that retailers should work more aggressively to mitigate pre- and post-EOSS sales declines. ‘Mitigating pre- and post-EOSS dip does not compromise EOSS footfall. Customers have higher tendencies to comeback within 30 days of purchase, hence the probability of EOSS visits increases for customers who are also encouraged to shop in the pre-EOSS season.


Myth: Customer volume creates EOSS success.

Reality: We conducted a survey to find out why customers appear to be buying less during EOSS. The results reveal issues on which marketers tend to focus less. For example, customers are discouraged by long queues and feeble customer experience during huge sales. Most high-spending customers feel that EOSS offer deep discounts on mostly outdated stock and that store staff is not focused on their needs and choices.

Well, now the question arises what retailers should do so they can generate maximum revenue from this season.  Following  mentioned are few best practices to get maximum benefit from this discount season for retailers:


Treat different customer segments differently

Brands often fail to treat their loyal customers and new customers differently. The most important factor to determine EOSS preview success is the right audience. Based on loyalty scores or revenue, 8-10 % of customer base should be given the first piece of cake. They are the ones who should be rewarded and treated as royalty before anyone else.


Reward the customers responsible for majority of total sales

The below chart depicts a classic sales contribution chart where 50% of sales are generated by 10% of customers, reiterating the need to reward and pursue customers falling into the top 10 segment.

Identify the local market

Loyal customers are the most treasured assets of a business, and must be made to feel they are top priority. Acquiring new customers costs about 5-10 times more than advertising and offering the right incentives for existing customers to buy more.

Retaining and selling more to existing customers assures higher profitability for the retailer.

• Decrease communication costs

Our study finds that, on average for most brands, customers acquired during EOSS are 30% less loyal and spend 20% less in the subsequent year compared to customers acquired during non-EOSS periods. This suggests that EOSS communications should be targeted to customers already showing greatest interest in the brand.

• Segment customers

Our research across different retail clients establishes that, the below category of customers constitute 20-30% of total customer base and 70%-80% of total responders to EOSS campaigns. We learned that these segments have higher propensities to respond for EOSS promotions and hence should be key targets.

1. EOSS Buyers ‘Low hanging fruit’: Customers who shop only during EOSS

2, Deal Seekers: Responders to any promotional campaigns

3. Bulk Buyers: Shop in bulk during sales

4. Referrals: Acquire customers through referral of loyal customers

Choose the right product to stock

While most retailers look to liquidate outdated stock during season sales, it is important to offer customers what they like to buy. Different retail stores experience customers with different styles, the key to winning customer royalty is wisely rotating stock in various stores and offering the right products to the right customers. This assures profitability for the retailer and customers’ interest in products being offered. It might also be useful to place fresh stock for customers who are attracted by sales, yet indulge in buying fresh stock.

• Understand customers to offer in vogue products Before the sale, it is essential to rotate stock based on its movement in each store location. If a Tier-1 store sells more formal apparel and Tier-2 and Tier-3 stores dominate in casual sales, it can be a good idea to align stock appropriately at each location. Remove the stocks in new arrival of which regular sizes are sold out as this might push your full price buyers to buy discounted products. Also, once the customer likes a product, nothing turns him/her off more than unavailability of sizes.

Focus on creating better store experience

Long-term success still pivots on your brand’s ability to delight customers every time even during EOSS where you are managing heavy customer traffic. Often, you are seeing first-time shoppers, making it that much more critical to find ways to transform them to regulars. Plan to woo both first-time shoppers and loyal customers to get the most from the season sale.

• Be prepared to manage high customer footfall Set up an express counter for loyal customers and customers purchasing only 1-2 items. Setup extra trial rooms to accommodate more customers and maintain superior customer experience even during EOSS. Make sure the staff is well trained to acknowledge well-informed customers or risk osing valuable customers.

• Capture feedback and demographics while customers are in queue. You don’t know what you don’t know - Often, during the holiday retail sales, compromises are made to customer experience, hence it becomes critically important to record feedback , deliver ideal customer service and offer relevant recommendations at all times.

• Get store managers out of the back room “37% of survey respondents indicate that store managers spend up to 50% of their time printing and reading reports”. A crucial best practice for brick-and-mortar retailers is to make sure that store managers get onto the selling floor.

Avoiding pre- and post-EOSS sales dips

The months before the July EOSS period are the most dreaded in the retail business. Revenue numbers plunge in double digits as customers wait for stores to begin discounting. But retailers have tradionally been shy of marketing to customers in pre-and-post sale months lest they over-do overall discounting or impact EOSS performance.

But mitigating EOSS dip doesn’t compromise EOSS footfall. In fact, customers have higher tendencies to return to stores within 30 days of purchase; hence active promotion of pre-sale visits actually increase EOSS footfalls.

In one recent example, leading menswear brand Peter England set out to reduce its dependence on EOSS for meeting annual revenue goals.

Working with Capillary Technologies, Peter England structured and deployed a Campaign Carnival aimed at reactivating lapsed loyal customers and driving new loyalty registrations during the month of June, just prior to its traditional EOSS. The campaign yielded positive revenue growth in a traditionally negative month. It also encouraged 12,000 customers who had not visited Peter England stores in the last six months to shop in stores during the month of June, with many also continuing to return repeatedly during the July and August sale months.

• Avoid pre-EOSS dip

Retailer should target existing customer segments with personalized rewards. New customers should be targeted with more aggressive offers to increase impulse buys and their chances of converting to long-term brand loyalists. Run good offers (carnivals) to major portions of customers to clear stocks at a minimal discount before EOSS.

• Mitigate post-EOSS dip

In addition, retailers should target loyal, premium customers and full-price buyers with communications about new arrivals. If you have an ongoing loyalty program, encourage customers to redeem their points and award bonus points on purchases.

Click here to read complete report

( Source: Capillary Technologies ) 

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