23 Nov 2023

Promotion strategies for fighting inventory management issues

Sean McTiernan Editorial Content Writer Talon.One

Sean McTiernan

Editorial Content Writer

Image of retail store

6 minutes to read

With inventory issues plaguing retailers worldwide, promotions present a way to turn a problem into an opportunity.

In 2020 and 2021 supply chain issues caused regular product shortages in every industry. In an attempt to compensate for the unpredictability of shipping, retailers ordered aggressively in the hopes of having enough stock. 

In 2022, those strategies caught up with them. Retailers like Walmart and Target reported that their inventories surged by roughly 40% compared to the year prior. Now a combination of more reliable shipping, delayed goods arriving a season too late and reduced consumer spending due to rising inflation has businesses with a glut of excess inventory.

If you’re a retailer, you’re at risk of running into the same issues. Here are five ways excess inventory is costing you money:

  • Not recouping purchase price of a produce

  • Paying for the space to store the excess product

  • The cost of insuring the inventory

  • The deterioration of inventory over time 

  • Limited space means losing out on storing more in-demand items

To avoid letting their excess inventory stagnate, most businesses are turning to promotions. 


You probably already know discounts are a time-honored way to move excess stock. What many inventory managers are finding is that they are particularly effective in the current situation. After all, inflation means that consumers are looking for bargains. By carefully balancing your inventory management goals with targeted promotion campaigns, businesses like yours can reduce excess stock while better serving their customers. 

An issue that can arise with how some businesses use discounts is that they are applied too generally, either on their entire product line or to a broad category of items. Often, this can be due to something as simple as a technical limitation in their promotions software.

If an item is urgent for you, creating a target, time-limited discount transfers some of that urgency to the customer. Strikethrough pricing is another tactic that increases FOMO for the customer, emphasizing how much savings they’ll lose out on if they don’t take advantage of the sale.

With Talon.One, it’s easy to create targeted discounts but also in-session customization. This means it’s easy to apply very specific, timed sales so you can focus on selling the products you need to move while also increasing your margin. 

Eddie Bauer has seen great results using Talon.One to create targeted discounts. For example, on one offer: margin increased 30% over the period prior to the offer running, demand increased 37% and conversion increased 19%.

Careful discounting won’t just clear precious space for new stock, it leads to a better performance over all. 


Bundling, the practice of selling a group of products as a single unit for one price, has two main advantages. 

  • Cross-selling: encouraging a customer to purchase a complimentary item to an item they’re already intending to buy, i.e. offering a set of tennis balls alongside a tennis racket at an overall reduced price. 

  • Upselling: Convincing a customer to buy an upgraded, more expensive, version of a product they intend to buy by offering a discount when it is purchased with a complimentary item. For example: a more expensive model of a phone bundled with a heavily discounted pair of wireless earbuds. 

Combining overstocked products with better selling items is a great way to increase average order value without sacrificing margin. Bundling also builds customer curiosity. Discounting items presents a product as an opportunity, bundling presents it as part of a narrative. Think back-to-school bundles of note books, pencil cases, erasers etc. 

Because bundling increases price opacity and puts emphasis on using the products together, it can actually boost sales of items included in the bundle without any reduction in their actual price.

Members of your loyalty program have already invested in your business. Offering exclusive bundles to loyalty members is a great way to reward their trust while also encouraging them to try new products. In fact, ecommerce brands using Talon.One saw sales of an ancillary product increase by 44% when additionally discounted as part of a bundle for loyalty members.

Progressive Discounts

What if you have overstock of a core item? Heavy discounts could solve your overstock issue in the short term but cause long-term issues when customers perceive it as overpriced when your prices return to normal. 

Combat this with progressive discounts, where customers are offered discounts the more they spend, either across a range or on one product in particular.

For example, take a sports goods store that has an excess of tennis balls after the summer season:

  • One ball: no discount

  • Two balls: 10% discount on all balls purchased

  • Five balls: 20% on all balls purchased

This encourages customers to buy in bulk and only affords a discount to customers with a high order value

Clothing retailer Eddie Bauer recently used progressive discounts to great effect. Using Talon.One, they created a Buy More Save More deal, offering increasing incentives for customers who purchased multiples of the same item. Eg, customers who bought two t-shirts received a discount of 20%, customers who bought three t-shirts received a discount of 30% etc. 

Compared to non-promotion orders, Eddie Bauer’s Buy More Save More campaign generated 135% greater units per order and a 772 bps increase in margin.

Free Gifts

Depending on the product, it might also be time to consider offering it as a free gift to customers who exceed a certain cart value. While making a loss on the product itself, a bigger picture view shows this approach yields serious benefits. 

In fact, not only does it solve the issue of storing excess inventory, Talon.One customers experienced a 50% increase in average order value when including a free gift


The best way to move inventory is to promote it to the right people. Every previous campaign type mentioned has the potential to be enhanced by hyper-personalization. According to a study by KIBO, Monetate and Certona, 70% of brands that developed advanced personalization earned 200% ROI or more. Hyper-personalized promotion campaigns tailor the offers and discounts customers get so your promotions reach customers more.

Less specific promotions, especially with deep discounts, attract sales-motivated buyers who are unlikely to become regular customers. Progressive promotions and promotions that come with long-term loyalty rewards help turn a problem, excess inventory, into a way to build a more loyal customer base. According to McKinsey, customers are 78% more likely to repurchase from companies that personalize their experience

The data required for hyper-personalization will also create vital first-party data about what interests customers in the future. This will actually contribute to more effective inventory orders in the future. To see all of the advantageous of check out our ebook Hyper-personalization: Next Evolution Of Customer Experience.


The best way to bring all of these strategies together is to take an omnichannel approach to promotions. This is when promotions are consistent on every channel available to your customers. The advantages of this are that customers can purchase products in the most convenient way for them, after all, 73% of customers prefer shopping on multiple channels. 

When dealing with overstock, omnichannel promotions opens up a whole new kind of innovative ways to shift inventory. For bulky items, offer free home delivery for customers who purchase them in store. Allow customers to buy online and then pick-up in store for a free gift. 

Use customer segmentation to target customers who are likely to be interested in the product but may only shop online with a coupon that can only be redeemed in-store, increasing their chance of discovering your sale. The omnichannel approach will also keep customers around after your sales, with businesses that focus on omnichannel engagement retaining up to 89% of their customers.

For more information on how to build compelling omnichannel promotions, check out our Ultimate Guide to Omnichannel Retail

What have we learned?

  • Discounts: increase margin when targeted correctly, move inventory while retaining value

  • Bundling: increase customer curiosity about underperforming items

  • Progressive discounts: Applies savings to products for customers buying in bulk without lowering their perceived value.

  • Free gifts: Move inventory while increasing average order value.

  • Hyper-personalization: Targets discounts more effectively, increases customer retention after sales.

  • Omnichannel: Gives customers more opportunities to convert, retains customers after sales

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