Creating Conditional Discounts for Seasonal Inventory Clearance

Fashion retailers face a perpetual challenge: efficiently clearing last season's inventory to make room for new arrivals while protecting profit margins on bestsellers and fresh merchandise. Blanket promotions like "40% off everything" can devastate profits, while manual discount tagging is time-consuming and error-prone.

The solution? Conditional discounts based on product tags. With the Sway Functions Generator, you can create sophisticated rules that automatically apply deep discounts only to specific seasonal inventory while excluding new arrivals and bestsellers.

The Business Case for Conditional Clearance Discounts

Step-by-Step Implementation

1. Access the Discount Functions Section

1. From your Shopify admin, open the Sway Functions Generator app
2. Click on "Functions" in the main navigation
3. Select the "Discounts" tab

2. Create a New Conditional Discount Function

1. Click "Create function"
2. From the modal, select "Conditional Discount"
3. You'll be taken to the function editor

3. Configure Basic Settings

1. Enter a descriptive campaign name (e.g., "Winter Collection Clearance")
2. Select the discount class (typically "Automatic Discount")
3. Set the qualifier behavior to "Discount if all qualify"

4. Set Up Product Tag Inclusion Rules

This is where you'll define which products receive the discount:

1. Under "Item Selector," choose "Product Tags"
2. Select the condition "matches any of"
3. Add your seasonal tag (e.g., "winter-2024", "last-season")
4. This ensures only products with these tags will be eligible for the discount

5. Set Up Product Tag Exclusion Rules

Next, you'll define exceptions to protect certain items:

1. Add another "Item Selector" rule
2. Select "Product Tags" again
3. Choose the condition "does not match any of"
4. Add exclusion tags (e.g., "new-arrival", "bestseller")
5. This ensures products with these tags will never receive the discount, even if they also have the seasonal tag

6. Configure Discount to Apply

1. Select "Percentage Discount" as the discount type
2. Enter your clearance discount percentage (e.g., 40%)
3. Add a message like "Last Season Clearance: 40% Off"

7. Set Combination Rules

For clearance discounts, typically:

1. Under "Combine with," allow combination with shipping discounts
2. Disable combination with other product discounts to prevent excessive stacking

8. Configure Discount Settings

1. Set appropriate start and end dates for your clearance period
2. Consider setting a maximum discount amount for high-value items

9. Save and Test

1. Save your function
2. Test thoroughly with products that have different tag combinations

Advanced Configuration Options

Tiered Clearance Discounts

For progressive markdown strategies:

1. Create multiple conditional discount functions with different discount percentages
2. Use different tags to indicate markdown stages (e.g., "clearance-stage-1", "clearance-stage-2")
3. Set appropriate start and end dates for each stage
4. For example:
   • Stage 1: 30% off (Weeks 1-2)
   • Stage 2: 50% off (Weeks 3-4)
   • Stage 3: 70% off (Final clearance)

Collection-Specific Clearance Rules

For different clearance strategies by department:

1. Combine collection and tag qualifiers
2. Create separate discount functions for different departments
3. For example:
   • Women's clearance: 40% off
   • Men's clearance: 35% off
   • Accessories clearance: 25% off

Time-Limited Flash Clearance

For creating urgency during clearance periods:

1. Create a special weekend-only deeper discount
2. Use both tag qualifiers and limited time settings
3. Promote as a "Final Clearance Weekend" event

Implementation Example: Fashion Retailer Seasonal Transition

Here's a real-world example from a fashion retailer:

1. Seasonal Tagging Strategy:

   • "winter-2024" - Applied to all winter season products
   • "new-arrival" - Applied to all products less than 30 days old
   • "bestseller" - Applied to top 10% selling products by category
   • "clearance" - Applied to items selected for end-of-season markdown

2. Clearance Discount Configuration:

   • Must have tag: "winter-2024" AND "clearance"
   • Must NOT have tags: "new-arrival" OR "bestseller"
   • Discount: 40% off
   • Duration: February 15 - March 15

Merchandising Your Clearance Strategy

To maximize the effectiveness of your conditional clearance discounts:

1. Create a Dedicated Clearance Section - Make it easy for bargain-hunters to find discounted items
2. Use Visual Badges - Add "Sale" or "Clearance" badges to eligible products
3. Sort Collection Pages Strategically - Consider showing clearance items after new arrivals
4. Email Marketing Segmentation - Send clearance announcements to customers who previously purchased similar items
5. Highlight "Last Chance" Messaging - Create urgency with time-limited language

Real Results: Fashion Brand Case Study

A mid-sized fashion retailer implemented tag-based conditional clearance discounts with these results:

• 64% reduction in seasonal inventory within 4 weeks
• 42% higher sell-through rate compared to previous season
• 18% higher margin compared to storewide sale approach
• 36% of clearance shoppers also added a full-price item to their cart

Measuring Success

To evaluate the effectiveness of your conditional clearance strategy, monitor these metrics:

• Sell-Through Rate - What percentage of tagged inventory is selling within the clearance period?
• Average Discount Depth - How deep are your actual discounts compared to planned discounts?
• Days Inventory Outstanding - How quickly are you converting inventory to cash?
• Cross-Category Purchase Rate - Are clearance shoppers also buying new arrivals?
• Year-Over-Year Comparison - How does this clearance period compare to previous seasons?

Common Issues and Solutions

| Issue | Solution | |-------|----------| | Slow clearance of certain categories | Adjust category-specific discount depths | | Incorrect application of discount | Double-check tag consistency and test thoroughly | | Customer confusion about eligibility | Improve on-site messaging about which products qualify | | Competitive pressure for deeper discounts | Create time-limited flash sales for resistant inventory |

Next Steps

Ready to implement conditional clearance discounts for your fashion retail store? Start by:

1. Developing a consistent product tagging strategy
2. Identifying current inventory that needs clearance
3. Setting appropriate discount depths based on margin and age
4. Creating your conditional discount function
5. Developing a marketing strategy to promote your clearance items

For personalized assistance with your seasonal clearance strategy, book a consultation with our team.