Most retailers will look to put on a clearance sale once, or twice, a year. However, lack of direction, or, discounting stock for the wrong reasons, could have a serious effect on your bottom line. Three years ago, the team in the pro shop at Edgbaston Golf Club stopped running clearance sales and, yet, profits continue to increase year on year. We caught up with PGA Pro and Retail Manager, Joshua Harvey, to talk about his winning strategy.
Tell us about your role at Edgbaston Professional shop
My role is to manage the entire retail business, from buying stock, managing staff and producing the end of year accounts. The main focus of my job is to help the team achieve the sales targets, for both turnover and profit, and work within a stock holding to ensure good cash flow.
Do you need to run clearance sales?
The short answer is, you shouldn't have to. When I joined as Retail Manager in December 2017, our goal was to maintain our stock value at £25,000 and ensure the stock turned, or sold through. This strategy means we don't have to wait for long periods of time for the stock to sell. It also means the team has to buy the right stock, and at the right time.
There has been a number of positive effects. Our cash flow has improved, and, in turn, we now have little, or no, clearance stock.
The importance of this approach to stock control is actually really simple. It keeps our margin strong and we don't have to have clearance sales. In the past, some of our members used to wait for a clearance sale, which actually had a negative effect on our business.
Would this approach work for everyone?
It's just makes good business sense and I can't think why it wouldn't work for any retail business. The one caveat is that not all buying decisions are perfect, and the golf market is unpredictable. At times, we have had to cut our losses and sell the product quickly. If a range isn't working, just don’t let the product sit on the shelf for 3 months, 6 months, and, whatever you do, don't let it have a birthday!
What reports do you use to determine if you need a clearance sale?
The Stock Turn report in the XPOS system is an important one for us to use. It allows me to accurately monitor our stock control and sales, and also highlights which products are turning slowly.
If a product has a low stock turn, we'll change the displays around: moving the slow products to one of the ‘hot spots’ within the shop. These are the areas that we've identified as most-frequented by customers: where there's increased foot fall, for example. If that doesn’t work, we try to move the stock on and purchase other items that will hopefully work better!
Another report I like to run, is the Unpopular Product report and I try to tie this in with the Stock Turn reports. It shows when products were booked in, as well as when the last sale was. As the Stock Turn report won't always tell the whole story, this additional report allows me to accurately target items that aren’t selling, and need to be sold.
Focusing on those 2 reports allows me to be aware of the stock holdings before anything gets out of control.
Has anything else helped the business?
We often utilise the XPOS Support Team's service for technical, or system, advice. And, we also always book in an annual Business Health Review: an invaluable consultancy session with a retail expert from Crossover Technologies (the developers of our epos system, XPOS). This helps us to structure our future plans, as well as analyse how we did over the last 12 months. The annual Business Health Review gives us an external point of view and invaluable advice.
For more information about the Pro Shop at Edgbaston Golf Club, go to http://edgbastongolfacademy.co.uk/professional-staff or follow Josh on Twitter @joshuajharvey