It's the holiday shopping season—and for many businesses, that means researching trends, making sure you're selling what holiday shoppers are looking for, and being ready to fulfill customer orders right up to the end of the year.
While your marketing and sales teams might be speeding ahead to create festive campaigns and forecast demand for seasonal products, you also have to clean up your product logistics from all across 2023 to make sure you can start off next year on the right foot. That means creating a plan for the excess stock you've accumulated throughout the months.
Excess inventory is an important metric that analysts and investors look at when considering the strength of an eCommerce business, and ballooning inventory can be just as troublesome as shortages. Unsold products end up dogging your footsteps in the new year, especially considering the warehousing costs and missed opportunities they represent.
These two areas of focus aren't as dissimilar as they first appear. Savvy eCommerce businesses can use excess inventory to supplement sales and bring in new business, especially if they have the funds to build momentum and launch engaging campaigns.
By identifying your customers' motivations this holiday season and considering their pain points, you can use different campaigns, pricing strategies, and promotional tactics to unload excess stock and use it as a vehicle to sell more goods overall throughout the holiday season.
Do the Holiday Season Right By Offloading Excess Stock
Today's forecasts and AI-powered analytics models can help eCommerce businesses across myriad industries create tighter inventory orders. Eventually, all businesses will have a choice: try to order inventory that exactly aligns with forecasted demand and risk running out too soon (sending potential customers to competitors), or order a little extra to meet all of your demand and be stuck with excess inventory.
Both scenarios represent waste and potential missed opportunities, and you'll have to choose which course of action is right for your business. For many companies, it makes sense to err on the side of excess:
- Lead generation is expensive. If you pay for PPC ads or influencers to direct traffic to your pages only for the product to be unavailable, that's a high cost for no revenue.
- Positive customer attention is fleeting. Customers will also be disappointed that they can't make a purchase. They may like the product enough to seek it on other storefronts, and they may negatively remember your brand for years.
- Extra inventory storage is a fixed, predictable cost. While ordering too much inventory can be expensive, the price of doing so is a known quantity. Businesses can calculate the potential costs of overordering and account for them in their pricing strategies and budgets.
However, that doesn't mean holding onto extra inventory for long periods of time is advisable. Businesses with leftover goods need to consider different strategies for offloading the products as profitably as possible.
Online Shopping Has Taken Off, And It's Driven By Trends All Year Long
In many ways, excess stock is a more prevalent problem for today's eCommerce businesses than conventional brick-and-mortar stores of the past. First, consider the scale that online shopping has grown in the past several years. Over 80% of Americans shop online, and 56.6% of consumers prefer it. Online shopping is also more driven by trends than in physical stores: it's much easier for eCommerce sellers and dropshippers to offer a wider selection of products and quickly add popular products to their storefronts than big box stores and boutiques can.
This fast responsiveness means businesses can immediately extract value from fads—ranging from fidget spinners to seasonal cooking equipment—and then move on to the next trend. However, it also means that stores will build up a collection of goods that peaked in popularity months ago. By the time the holiday season approaches, your business may have excess inventory spanning the seasons. Many of the products might not be popular or simply not useful in the winter. So if you cautiously buy more stock than demand forecasts fully warrant, you'll have eclectic goods to hand off, and you'll need creative strategies to match.
Holiday Shoppers Are Looking for Deals, Trendy Buys, and Easy Wins
We've identified the problem many businesses face near the holidays: you have excess inventory that simply isn't moving off the shelves as-is. To be an effective seller, it's also important to identify the problem that's motivating many of your shoppers: they need to make their holiday shopping dollars stretch further.
Holiday shopping is expected to hold relatively steady from last year, increasing only $42 per shopper to $875. Amidst rising inflation and concerns of a recession, holiday spending levels simply aren't expected to grow much. However, shoppers still want to maximize their gift-giving ability and make plenty of online purchases for themselves, their holiday experiences, and their loved ones. So they'll be motivated by discounts, good deals, and stores that offer extremely competitive pricing. 89% of shoppers care primarily about price as they're shopping, and 74% of shoppers can be persuaded to consider a purchase more seriously when a discount is involved.
Impulse Purchases and Increased Cart Sizes Should Drive Your Business Strategy for the Holiday Season
At this point, you may already have the beginnings of a strategy in mind. You can offload your excess stock during the holiday season by offering your shoppers discounts and good deals. But how does this goal figure into your wider holiday shopping season strategy? Consider:
- For 73% of Americans, most of their shopping is done on impulse. Repositioning products within the impulse buy price range can significantly increase the volume of sales you're making, especially when people are already browsing for gift ideas.
- It's highly valuable if you can persuade shoppers who are already making a purchase on your website to buy an additional product. You've already paid for the advertising costs and marketing efforts to bring the shopper to your website. Increasing the number of items they're purchasing keeps your expenses relatively steady while increasing the revenue from the sale, proportionally increasing the profit.
- Keywords become much more expensive during the holidays, and competition becomes more fierce. Lead generation is hard during the holiday shopping season. Every lead you get will come at a higher cost. Increasing cart values through bundles and impulse buys can offset those costs and keep products moving.
6 Strategies for Selling Excess Stock Throughout the Holiday Season
When you're creating your playbook for holiday shopping sales, you have the opportunity to directly promote your excess inventory through multiple types of promotions and sales tactics. Consider these six strategies and use them all season long to empty your warehouse shelves and start 2024 with a blank slate.
1. Create a Calendar Full of Festive Promotions
Plan and launch holiday-themed promotions all throughout the shopping season. This can include:
- Kick-off promotions following Halloween
- Promotions during Black Friday and Cyber Monday
- Promotions designed for late holiday shoppers who want to finish their to-do list before the last reliable shipping date
- Spotlight promotions for different product categories or shoppers
These promotions can focus on specific types of excess stock, or they can draw customers to your product pages for different reasons. Not only do these changing themes and rapid-fire promotions increase the likelihood that shoppers will buy your products, but they also form the basis for social posts, promotional emails, and other outreach efforts. As a result, your brand will stay top of mind through the end of 2023.
2. Offer Discounts
Pricing is one of the most impactful factors that affect shopping decisions. When you lower the price, you make products more appealing. Do this by visibly marking your price reductions or giving customers digital coupons for different types of goods.
3. Create Tempting Product Bundles and Holiday Sets
Sometimes, price changes aren't enough to inspire more purchases. Bundle together similar products and sell them at a slightly elevated (but still lower than buying the two items separately) price.
You can bundle umbrellas with thick winter socks, put together bundles of trending art supply products from months past, or bundle gourmet food products and offer plush gift wrapping or boxes. Curate seemingly random products into bigger holiday gifts that appeal to your audience, and you may secure even more shoppers because you're offering something unique at a great price.
4. Reach Early and Late Shoppers With Flash Sales
Flash sales inspire a 'now or never' energy amongst shoppers. If you offer great deals but only for a very limited stretch of time, online shoppers will be much more motivated to buy products they might not have otherwise considered. Use marketing cues like displaying the original price and the discount percentage, having a clock on every product page, and multiple messages encouraging your target audience to not risk missing out.
5. Wow Shoppers With Surprise Gift Promos
Intrigue shoppers by offering surprise gifts with a purchase. With this tactic, you might not directly recoup the cost of the excess stock. However, you will persuade many buyers who were otherwise on the fence to make a purchase from you, and you may inspire customer loyalty by making their experience with your brand more joyful. After all, everyone loves a free gift.
6. Offer Deals for Bigger Cart Values
While the primary goal of these strategies is to offload excess stock as profitably as possible, a goal that aligns with that objective is increasing the average cart size. Offer your shoppers perks like free shipping, free rush shipping, or discounts that increase in proportion as the cart size increases. This motivates shoppers to browse your product pages and spend extra.
Combined with discounts that might put your excess stock straight into the impulse buy range, you can accomplish both goals at once. Even if shoppers don't buy excess stock with deals for bigger carts, they'll buy more products overall.
Surplus Inventory Can Be a Surprise Holiday Win for You and Your Customers With the Right Campaigns
By employing these strategic elements throughout the holiday season, you can access multiple benefits:
- Reducing your storage and warehousing costs
- Increasing holiday shopping revenue
- Increasing your customer base
These all promise more growth potential for your business. At Onramp, we help eCommerce business owners grow their businesses all year round by providing insights and growth capital. Fund the holiday shopping promotional campaigns you need to start selling excess stock with money from Onramp, and then pay it back at a pace that doesn't impede your business growth. Reach out today to see how much growth capital you can get to sell more this holiday season.