More to marketing. Welcome to More to marketing, the podcast on marketing, product and Everything business. I’m your host, Susan, and today we’re going to be diving into the topic of why do advertisers and marketers go all in when they’re doing end of year sales or even new year sales? And we won’t actually go in and think about if there are any benefits or drawbacks. These type of campaigns and we’ll see if there’s some examples that we might. Be able to. Share as well. So why do companies do end of year and end of financial year sales? Well, most of the time it does come down. To being a very lucrative. Period of time because of financial reasons, so you might have end of financial years all of those. But there are three key elements to think about and one of them is consumer psychology. During a lot of the holiday periods, people do have a shopping mindset, so they’re wanting to go out and purchase so they can be buying gifts or preparing for the new year. That could be for school or whatever. It is so for those there is a mindset there that I want to buy. I need something I need to fulfil, a need for myself or a friend, for a family member. But I’m actually open and receptive. Now, in particular, January represents a new start, a fresh start. So many people and consumers often. Line deals that they want to do with that fresh start, so that’s why New Year’s resolutions can be quite big when it comes to certain services or products. So that could include fitness gear, organising tools or even just self improvement products or services. You’ll find that a lot of gyms. Will go out with New Year, new year campaigns. They’ll definitely get a lot of take up doesn’t mean it’s going to stay that way after January it might fall off into February and March.
But.
With that mindset of that fresh start, the consumer psychology there is, I want to improve myself. What products or services can I purchase? And that’s where the advertising kicks in. Now the second type. Of motivation when it comes to end of year sales is the retailers motivation. A lot of the time, companies actually want to clear out unsold inventory to make room for new stock. For the year. Think of calendars are a perfect example, and probably one of the easiest ones to come to mind where when you have a 2024 calendar or 2025 calendar, you’re really going to want to move those stocks because they’re numbered and they’re limited. There’s also the aim by the retailer to capitalise on end of year budgets and consumer bonuses, so in a lot of different countries, bonuses will be given in December. I just remember the movie, the Christmas 1 Christmas family lampoons and he’s waiting for his Christmas bonus to pay. For that pool. That again shows that in that particular market in America. Bonuses can can possibly be for December, so that will also help retailers wanna motivate particular types of sales as well. For some of these. Bigger ticket items. The third area to also consider is the marketing cycles themselves sales periods. There’s a whole pile of different cycles that come. Through the ear. So you’ve got. Sales Valentine’s Day. Mother’s Day, Father’s Day and the financial. Yeah, the list goes on. And when sales periods tie into a natural lull, post holidays keeping momentum alive during quite a retail month like January can sometimes be pivotal. A lot of the times you’ll find that they go out with the Big Pre Christmas sales and the Boxing Day sales are now earlier than Boxing Day. But what do they do in January? Because usually the January sale starts on Boxing Day. They now have to keep that momentum going throughout all of January now to keep that sales spike higher. But there are whole different benefits and drawbacks of doing these type of campaigns, so some benefits definitely can boost your revenue. These sales drive significant consumer spending, so if you’ve got the right product at the right price at that right time, of course you’re gonna have that spike. Helps some brands meet their annual revenue goals as well, because they might be seasonal products. Inventory clearance is always an important benefit because clearing out old stock to make financial money to then bring in new stock is very important. And then the brand visibility, sometimes some well timed sales can reinforce a brand’s presence during a competitive period of time and get that cut. Through it needs. Drawbacks. So of course you can have margin erosion, heavy discounts or giving away GWP’s as gifts with purchase. They can all really eat into your profits, so you really need to make sure that when you first set your pricing for your product or service, that it can take any discount you’re going to do in the future and how that would weather and look over a year. Another drawback is the customer expectations frequency or deep discounts may actually train customers to wait, and that will mean they’re waiting for sales, which will impact the people that we’re going to potentially buy for full price. You’re now training them to expect a discount and. They’ll hold off. And then you’ve got. The operational streams higher demand as we’ve seen with during Christmas time with even going to the post. Having too much volume and demand will impact and create time delays and customer dissatisfaction in the supply chain. So you got to be very careful about the balancing act there and expectations to those consumers are purchasing. Where they purchased it before a sale period, it might have taken 2 days to get to them, but because of a high demand period where there’s a lot of items going through the mail or career service, it’s going to take two weeks. Make sure you share that with them. Now there are all different types of campaigns out there during sale times that work well and don’t necessarily work well. So I’ve. Got a few little examples. Team. So some good promotions. Is when you focus, say you’re a sporting goods store and it’s a new year sale, you focus on those resolutions that people will make and offer discounts or goods. That can have some kind of value add added to them let. Me. Gift with purchase. Or some other couponing or vouchers. And it could be for outdoors and fitness. Gear. Tapping into that mindset of people wanting to get out and about to get their fitness together, it might be better for a physical good over a gym, but who knows. Apple gift cards have also been one that’s worked really well during sales periods, so they don’t do discounting that often. But when they do, that’s a value add to the consumer. It’s a very prestigious brand as well. So I guess that cut through for a. Lot of different reasons. Now bad examples. Complicating the offering, don’t overcomplicate your discounts. If you’re saying things like 40% of this spend additional 20% for that and if you join up another 5%, that’s just gonna confuse the. **** out of everybody. So don’t frustrate your consumers. Having 50% off, but only on specific items with certain conditions. Can be confusing, so try and find offerings that are simple. Clean and have minimum confusion behind it. And one I’ve already touched on, another bad example is that poor planning, so over promising and under delivering. So it could be things like running out of stock early. They that can really have a brand reputation to it. If they’ve expected you to have that stock or they’ve ordered it and then they find out a day before Christmas, it’s not coming. That is not a good way to do business and will definitely impact your brand. Reputation. So some key takeaways for about if end of year and year sales can be successful. Well, if you understand your audience and you tailor some promotions for the seasonal motivations, you’re more likely to get that good positive cut through in those additional sales and those sales periods. So think about self improvement, holiday gift. They’ll help you with those audience needs. Focus on simplicity. Make sure your offer is easy and clear to understand. Don’t over complicate it. If you can get away with not complicating it. Plan ahead. Work with all of your team and sure there is inventory logistics. Make sure they’re prepared for that demand spike that will happen. Where you can add value, not just discounting. It could be bulk. Offering it could be offering exclusive experiences. It could be that GWP. Think about how you can get away with not eroding your margins. By doing discounts and see if there’s some other value you. Can do. And of course, measure and optimise. It is essential that you capture data from previous campaigns and current ones that you’re going to do and refine it as you go. See what works well and always test back to the right audience that you gain the right things out of these campaigns that you’re supposed to from whatever the KPIs you’ve put. I hope you’ve. Gotten something out of this particular episode on a sales period is worth it or not for advertisers and also their consumers. Don’t forget to like more than marketing to be able to listen to more podcasts in the future. More to marketing.
