Is it a mistake to offer holiday-driven discounts?

AsktheExpertsQ: I sell both menswear and women’s wear and I’m planning a Mother’s Day promotion, with discounts on some women’s accessories. What is your advice on holiday-driven promotions? Is it a mistake to offer discounts? If so, what should I do instead?

A: It’s okay to promote around holidays, since that’s the world we live in. But I have a couple of questions for you:

1.Do you have an annualized margin plan?
2. Do you use a markdown plan that is tied to the margin plan?

Markdowns are your friends, but like in all friendships, neither party is allowed to be abusive.

Your IMU (Initial Mark Up), margin goal and markdown plans are all interrelated.
A balanced relationship should allow you to promote and hit your margin plans.

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avatar About Steve Pruitt

Steve Pruitt is founder and Senior Consultant of Blacks Retail Analysis and Blacks Consulting. With over 30 years of experience, Steve is one of the most respected merchandise analysts in the industry. His specialty is apparel merchandising and he has worked with clients in every sector of this category. Steve’s approach is highly customized; he tailors his analyses to the particular needs and market of each client. His work ties together the merchandising piece of the business with the client’s overall financial goals to increase sales and streamline operations. Steve is also a trusted general business consultant, known for his ability to help retailers plan growth and manage change.
 
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