Builders’ merchants: five tips for setting promotions

Retail and point-of-sale software can help make your promotions and sales far more effective.

26th February 2015

We all know that sales shift stock. Well-timed, well-crafted discounts can boost your revenue, clear out space in your shops and warehouses and help you through quiet patches. As consumers, we’re all tempted by discounts and offers, often buying items we don’t really need simply because of the bargain in front of us. However, merchants will lose out on revenue if you don’t plan promotions carefully. Integrity’s builders’ merchant software comes packed with plenty of retail and point-of-sale features, including a promotions module. Using software can improve the effectiveness of your promotions. Take a look at some of our tips for making the most of your offers, sales and discounts.

#1: Choose targets carefully
A blanket discount across all of your products may seem like a marketing move that’ll turn heads, but it is unlikely to increase your profits. All the biggest retailers use vast banks of data to determine which products would benefit most from discounts, taking into account margins, stock volume and the frequency of sales. These firms are also able to anticipate and react to sudden changes in demand. If you have retail and point-of-sale software, you can carry out a similar process. Choose to discount products with high margins to ensure that you’ll still make a decent profit on the discounted items.

#2: Avoid large discounts, encourage multiple purchases
Builders’ merchants often have to struggle with tight profit margins. You may be tempted to apply a huge discount to certain items in order to significantly boost your sales, but the revenue boost will only help your cashflow in the short-term, and you will lose significant amounts of potential profit. Additionally, if you come to rely on discounts (and apply them frequently), customers will delay buying products until they see them on sale. Instead, make use of multi-product promotions or discounts that only apply over certain spending thresholds, such as £50 off when you spend £500. This will encourage your customers to spend more while still allowing them to get some great deals.

#3: Time-bound promotions
If cashflow is a real problem for your firm, you can ensure your promotions have a near-immediate effect by setting time limits on them. You may not be able to implement the flash deals that are commonplace online, but setting promotions so that they only apply for a limited time period (say 48 hours or 7 days) will tempt your customers to purchase quickly. This is particularly useful in merchant businesses where you have regular trade customers. Remember – if you use retail software, you can use it to set time limits on promotions.

#4: Learn from past sales
Retail software allows you to quickly draw up figures showing the sales performances of individual products. Therefore, you can easily find out how effective your promotions have been. Track the performance of previous discounts – what worked and what didn’t? Determine the type and scale of promotions that achieved the most profit in the shortest timeframe, and look to apply similar promotions in the future. 

#5: Know your stock levels
This may seem an obvious point, but too often merchants spend a great deal of time planning their sales, only for products to sell out within a day or even a few hours. Ensure that you know exactly how much stock there is in your warehouse, and if and when additional deliveries will arrive. This will help you manage your marketing resources more carefully, so you don’t spend time and money promoting sales on products that sell out almost instantly.

Point-of-sale software for builders’ merchants gives you complete control over the promotion process, automatically applying set promotions and discounts at the point-of-sale. Learn more about the many other features of our software for builders’ merchants here.

Tagged under: Builders’ merchant software, software for builders’ merchants, retail and point-of-sale software

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