Looking at the calendar, it can be easy to lose Presidents’ Day in the mix of post-holidays retail opportunities. But it’s important to think of it as sort of a yin to Valentine’s Day’s yang. Where Valentine’s Day represents a specific shopping holiday in niche sales categories like jewelry, flowers and—particularly in 2021 as nights out are less of an option—groceries, Presidents’ Day is a broader sales holiday that extends to multiple big-ticket item categories.
What makes Presidents’ Day unique is its de facto position as the end of the winter shopping season. As such, many retailers use the holiday to offer deep discounts on overstocks from the holidays. Sales in clothing tend to see large markdowns around Presidents’ Day as retailers clear shelves ahead of spring shopping season, and aforementioned big-ticket items like appliances, electronics, furniture, and mattresses go on sale as retailers look to boost sales numbers during a particularly slow part of the year.
Presidents’ Day Presents a Unique Opportunity
The relative sales dead zone after the holidays typically fills brands with dread, particularly in years where holiday shopping numbers may have shorted expectations. There are silver linings to where Presidents’ Day falls on the calendar, however, that can help propel retailers into spring shopping season and capitalize on a traditionally slow part of the year.
For one, Presidents’ Day lands on February 15 in 2021, the Monday after the IRS begins processing tax returns. While tax return season is seen as a major retail opportunity, Presidents’ Day represents the beginning of the season. Targeting early birds who file taxes at the start of the season can mean a major ROI, especially when you factor in that nearly ten percent of consumers will spend their tax returns on a major purchase.
Additionally, given Presidents’ Day’s position as a capstone on the holiday season, it may be one of the last major retail opportunities for consumers to spend gift cards received over the holidays during the holiday season. With gift card sales representing one of the areas of growth for retailers in 2020, the amount of unspent potential may be hanging there waiting for brands to cash in. Particularly when you factor in that nearly 75 percent of customers spend more than the value of the gift card itself, the opportunity is there to keep sales strong through February.
Maximizing Margins This Presidents’ Day
The conditions that influence Presidents’ Day promotions—it comes during a slow sales period, retailers are looking to reduce overstock ahead of the spring season—lend themselves well to deep discounting. For brands looking to turn this unsung shopping holiday into a gain leader, however, instituting a more focused promotions strategy could make all the difference.
Optimizing promotions with dynamic pricing gives brands the ability to segment consumers based on price sensitivity rather than blanketing broad promotional pricing traditionally used for clearance. Deploying predictive analytics—like the tools available in RevTrax’s Offer Management Platform—enables brands to target customers according to their buying behaviors, which translates to offering dynamic pricing while maximizing margins.
Offering a broad customer base 25 or 30 percent discounts may do a lot of heavy lifting towards driving sales, but identifying customers willing to make a purchase with a 5 or 10 percent offer completes the conversion while maximizing margins. Particularly when we’re discussing big-ticket items like appliances and furniture, a loss of 10 percent through discounting can translate to hundreds of dollars per transaction, which can aggregate to losses in the thousands; as well as signal the difference between a successful sales cycle and an unsuccessful one.
When done right, and by leveraging modern tools in AI and machine learning, brands are able to institute smarter strategies that can take a minor shopping holiday like Presidents’ Day, and turn it into a final sales push that can carry through from the holidays to spring. Considering margins and understanding individual customer discount motivations can make all the difference.
Are you interested in learning more about maximizing your margins this Presidents’ Day? Get in touch with a RevTrax specialist today and we’ll show you what dynamic promotions strategies can do for your bottom line.