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harming gross margin for a luxury-brand Retailer
Problem:
A retailer in luxury-brand goods with sagging sales in a stagnant economy wanted to spur their current sales to help raise revenues to pay current
liabilities without having to discount their products and hurt gross margin.
Solution:
We used our Trade-in Program as a way to stimulate demand and improve current sales while maintaining gross margin for the retailer.
Result:
Through a direct mail campaign to the retailers 7,700 customer database, we received a response rate of 2.17%, well above the standard 0.5% on
direct mail advertising. Of the respondents, 12% were converted to trade-in customers. The average customer purchase of a new item using a
trade-in was greater than $1500.
The end result was that the program created a "win, win, win" situation for the involved parties: the retailer, the retailer's distributors and the
retailer's customers. The distributors got their outstanding receivables paid and were able to book new orders with the retailer to restock
inventory. The customer's received a guaranteed amount off the purchase of a new item and knew the amount before they even walked through
the door by accessing the retailer's website for information. The use of a third-party vendor, Surplus Advisors, to provide this service, insulated
the retailer from any customers that would feel slighted by the price paid for their item.
Visit TradeInWatches.com to learn more.
