Retail Short Sale Cycle 101

In retail, be it in ecommerce or in brick and mortar stores, a short-sale cycle refers to a limited period of time during which products or merchandise are offered for sale, at a discounted price.  

Usually, retailers adopt the short-sale cycle approach when they have a product/s that is not selling well, or when they want to clear out excess inventory. And, they adopt a number of strategies to market their products; through social media ads and email blasts to customers.  

At times, they even offer additional incentives like providing free shipping or free gifts with a purchase to generate more urgency and enticement around the sale.  

Short-sales cycle clearance of the Sony PlayStation Classic 

For example, in December 2018, Sony PlayStation released the Sony PlayStation Classic, a miniature version of its original PlayStation gaming console.  

The product was originally priced at USD 99.99, but within a few months of release, it received mixed reviews because of its limited game selection and lack of popular features, and many retailers soon discounted it and offered it at USD 59.99.  

In fact, in February 2019, Amazon, Best Buy and other retailers ran a short sale cycle and promoted the PlayStation at USD 39.99. They marketed the sale heavily through online ads, social media and email marketing, and topped it with free shipping, in-store pickup and other additional incentives.  

The result? It created a surge in sales. The retailers cleared out inventory of the PlayStation and customers bought the product at a steeply discounted price.  

Amazon’s largest sale event, the Amazon Prime Day, is another example of a short-sale cycle. In 2021, Amazon reported that third-party sellers exceeded USD 3.5 billion in sales during the two-day event.  

Determining Products to Market in the Short Sale Cycle 

The products to be placed on a short-sale cycle typically vary with each retailer and their goals for their business. Largely, the sale includes; 

• Seasonal Items: Retailers often use short sale cycles to clear out seasonal items that have not sold as well as expected. For example, they may offer discounts on winter coats at the end of the season to make room for spring inventory. 
• Overstocked Items: If a retailer has too much inventory of a particular item, they may put it on a short sale cycle to try to move it quickly. This can help free up shelf space and prevent the items from going out of season or becoming outdated. 

• Discontinued Items: Retailers may also use short sale cycles to clear out inventory of products that have been discontinued. By offering them at a discount, they can sell the remaining inventory quickly and make room for new products. 
• Slow-moving Items: Some products may not be selling as well as the retailer had hoped, but they still have a decent amount of inventory left. By putting these items on a short sale cycle, the retailer can try to create urgency among shoppers to buy the products before they are gone. 

Is a Short Sale Cycle Different for Ecommerce & Brick-and-Mortar Retailers? 

While the end goal is the same – to drive sales by creating a sense of urgency among shoppers, there are some differences between how a short sale cycle is carried out in ecommerce vs traditional retail. 

ECommerce Flash Sales 

In ecommerce, a short sale cycle is referred to as a “flash sale” or a “daily deal,” and is typically promoted heavily through email marketing, social media and push notifications on the smartphone. E-commerce retailers often have limited-time discounts on specific products or product categories, and they offer free shipping or other incentives to encourage shoppers to make a purchase. 

Tracking Flash Sales with Analytics Tools like Tabelau 

One advantage of a short sale cycle in e-commerce is that it can be easily tracked and analysed using data analytics tools like Tableau. E-commerce retailers can use them to measure the effectiveness of their promotions, identify trends in consumer behaviour, and adjust their sale strategies accordingly. Here’s an insight into how your business can use Tableau to Power Retail Intelligence. 

Clearance Sales in Brick and Mortar Retail 

In brick and mortar retail, a short sale cycle may take the form of clearance sales, end-of-season sales, or one-day-only promotions. These sales are typically advertised through in-store signage, flyers, and email marketing. 

One advantage of a short sale cycle in brick and mortar retail is that it can create a sense of urgency among shoppers who may be more likely to make a purchase when they see a limited-time offer in person.  

A Merit expert adds, “However, the limited time frame can also create challenges, such as managing inventory levels and staffing needs during peak shopping periods. This is where relying on data can help drive better short sale cycles even in traditional retail.”  

If you’d like to know more about how brick-and-mortar retailers can use analytics to drive revenue and growth through short and long sale cycles, read our blog on; Analytics for Brick-and-Mortar Retailers: Why Data Matters. 

In conclusion, a short sale cycle is something that cuts across industries like fashion, travel and gaming, because the ultimate goal for any business is to move inventory, generate revenues, and create a positive purchase experience for their customers. 

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