Effective selling: what works and what doesn’t?

HIGHLIGHT — With 553 Conn’s HomePlus and Badcock Home Furniture &more stores liquidating inventory and up to 315 Big Lots stores also holding clearance sales, it could be difficult for other retailers to be seen or heard in these markets.

In other markets, many retailers are still struggling to clear excess inventory they accumulated when supply chains were at their shortest and they were willing to take whatever their suppliers had in stock. When supplies returned to normal levels, many were left with goods that were either too expensive or did not fit their usual assortment.

To make matters worse, sales have been declining across the industry since late 2022/early 2023. For retail, these are the most difficult times since the Great Recession.

In such cases, some might consider an effective sale facilitated by a sales promotion company. Experts from these companies offered mixed messages – some promising, some discouraging – about the success of these sales and what they mean for participating retailers in the short and long term.

Achieve impact

Clay Wahlquist, founder and CEO of Wahlquist Promotions, said the wave of liquidations will flood markets with leftover stock, but it could also pique consumer interest, and that’s where retailers can capitalize if they’re careful.

“If Conn’s, Badcock and Big Lots close, they’re going to take away three months or a year’s worth of volume in no time,” Wahlquist told Furniture Today. “That takes away a lot of current and future business from the dealers. That’s going to have a devastating effect on them, so my advice to them is to get ahead of the game, jump into the fray and jump on the bandwagon with them.”

“Closing these stores will boost business,” he added. “Consumers respond to the best story. If we come up with stories with horsepower, they’ll be happy to come into the store.”

Chris Dickason, sales manager at Lynch Sales Co., said a well-executed sale can generate short-term excitement and, in some cases, level the playing field. He said Lynch has been conducting these sales for three decades and has achieved many high-profile results.

“If you talk to marketing experts, they’ll say that if you don’t do the same thing over and over again, but try something new and do it with a bang, people will remember it longer,” Dickason said. “That’s what it does: it gets your business talked about.”

He said sales can also foster relationships, citing the example of a client who hired Lynch for 12 different events. After the owner died, the family trusted Lynch to close the business.

Patrick Harrison, president of Hoyt Highfill & Associates, said building those relationships starts with a conversation, and that initial conversation can serve as a guide to whether certain sales models might work.

“You have to look at the business cycles and where you are in the business cycle. Where you are and whether a move would make a good change. If that’s not an option, would a liquidation get you through a slowdown?” he said. “Often the dealer will know or we’ll let them know they’re not doing badly, they’re just a little over-inventory.”

Harrison said that while high inventory levels can occur, the prices of some of the items retailers carry today can vary widely due to the timing of the purchase of parts and shipping costs.

“There are bad buys, but there are good buys too. We’re in the unique situation now where you have furniture in your store that costs less than it did a year ago,” he said. “If you’re in a high inventory, low cash situation, working with a company like ours is a great option. It varies on a case-by-case basis, but typically a promotion with staff is a good alternative to convert inventory into dollars.

“We have been around since 1960 and we would rather help this or that customer this time and then the next time rather than drive them out of business completely.”

Dickason said these sales can sometimes give in-store sales associates additional tools, even when the specialists are long gone.

“With a lot of furniture, especially the more expensive design types, they’re not as good at closing sales,” Dickason said. “The normal sales process is long and slow. If you don’t buy it at these events, someone else will. It helps to train their staff to close sales a little faster.”

Wahlquist said he and his team would also like to work with local staff to ensure they are well positioned after the sale and the retailer remains as strong as possible.

“For the retailer, it’s about selling and making money, reducing inventory and preparing their sales force for the future,” Wahlquist said. “That’s our motive to the retailer, not just to have great numbers, but to make them healthy in all aspects of the retail operation.”

A different approach

On the other hand, Tom Liddell, senior vice president at Planned Furniture Promotions, said that while the local Conn’s and Badcock clearance sales could generate a lot of additional buzz, they would still generate revenue for everyone.

“Ultimately, it creates a win for all customers,” Liddell said. “It gets people out of their chairs to do the clearance sale, and if they don’t find what they’re looking for, which happens, they’re still in the mood.”

And what about the need to move extra inventory in a hurry? Liddell said that’s largely self-inflicted. “They do have inventory that they need to sell, but that’s a consequence of the fact that they keep buying even when business is bad.”

Liddell said that while an effective sell-off could lead to a sell-off of inventory and create excitement in the market, it also caused confusion after the fact.

“Most of the time, people hold big sales that don’t go through. They make a lot of sales, but when the dust settles, at the end of the event, consumers think they’re going out of business or have given up because of how they were advertised,” he said.

Instead, Liddell suggested that struggling retailers – particularly those that are decades old but are seen as old-fashioned – should consider a complete reboot. “Many are not moving with the times and are not attracting new customers. They can do whatever they want in their store,” he said. “They can change the range and refresh the range, but that’s not enough because they are seen as the mum and dad’s furniture store. That identity is not going to disappear overnight.”

Liddell said that in cases like these, PFP has held a clearance sale to raise proceeds for the redesign, but he pointed out that everything (apart from the people in the store) has to look and feel different for the sale to be successful.

“To be successful, they have to make physical changes to the facade and the interior of the building. Few people are willing to do that,” Liddell said. “If they have multiple generations in their business and want the business to continue to be successful for their family, that’s really the only solution.”