How can retailers effectively use promotions to manage inventory?

Creating limited-time offers is an effective strategy for retailers to manage inventory because it creates a sense of urgency among consumers, encouraging them to make purchases quickly. This tactic can help move excess stock or seasonal items that might otherwise linger on shelves. When customers see that a promotion is time-sensitive, they are more likely to buy the product to avoid missing out, which can quickly reduce inventory levels.

Additionally, these limited-time promotions can generate excitement and buzz around products, drawing in shoppers who may not have considered making a purchase otherwise. This approach not only helps in managing current inventory but can also stimulate overall sales, enhancing revenue during promotional periods.

In contrast, increasing prices may deter customers from purchasing, while reducing the variety of products could limit customer choices and decrease overall sales potential. Avoiding promotional activities altogether may result in stagnant inventory levels and missed opportunities to engage with customers and drive sales.