“The holiday season is almost here”. If hearing that makes you squirm in your seat, even a little bit, maybe you need to stop working on your next sale poster and take some time to plan out your strategy first. We know the holidays can be a maddening time for retail. But to make sure your business doesn’t get swept up in the oncoming cacophony, we’ve created a 10-part blog series covering each aspect of holiday season retail. Think of it like decorating a Christmas tree – you wouldn’t just throw decorations at it and see which sticks, would you? With that in mind let’s hang our first bauble – planning.
Do you have a calendar handy?
In retail, there’s more than one date you need to keep in mind during the holiday season. Not only because you need to prepare for the added sales volume on those days but also because you need to integrate your sales plan backwards from those dates to be fully prepared. While you might know most of these dates, here is a quick refresher on the ones, which should definitely on your retail calendar for the holiday season:
October 31, Halloween: Each year, about 40% of consumers begin their holiday shopping before Halloween.
November 28, Black Friday: 2013 saw online spending on Black Friday increase 15% to a record $1.20 billion.
December 1, Cyber Monday: Online shoppers spent over 1.73 billion dollars on Cyber Monday in 2013, marking the heaviest online spending day in history.
December 8, Green Monday: Last year, consumers spent $1.4 Billion on Green Monday – a major e-retail day falling on the Monday in December, at least 10 days prior to Christmas.
December 18, Free Shipping Day: Shoppers took advantage of Free Shipping Day in 2013, making 1.03 billion in online purchases.
December 25, Christmas Day: With most shoppers spending time offline, this is one day to (sort of) relax and prepare for Boxing Day.
December 26, Boxing Day: Boxing Day is consistently among the biggest retail days of the year. 2013 saw an overall jump in online sales of 40% when compared to the same day in 2012.
Start wide but finish deep
Before the season starts, spend time putting together a complete assortment of merchandise across all your categories. But as the season gets closer, start to narrow your assortment and focus only on the ones which have proven to work, the best sellers in your lineup. Since customers have already expressed interest in those items, they more likely to generate sales and have the lowest markdown risk.
Look past the immediate horizon
Even though we’re still in September, you need to start reviewing your sales plans for November and December right away. By now, you should be far enough into the season to project the last two months, as compared to the start of the season. Ask yourself key questions like “how have sales trended compared to last year?” “Which categories have proven to strong?” “Are any weak categories lagging behind in my lineup?” Answering questions like these will help you make more accurate sales predictions for the holiday season.
Do you have enough supply to meet demand?
Most retailers have mixed feelings about inventory around the holiday season. Order too much inventory and you risk significant markdowns later in the season but order too little and customers might go elsewhere in a heartbeat if they don’t find what they’re looking for.
That’s why you need to review your inventory plans for the end of October, November and December. Think long and hard about what percentage of your ending inventories each month you want to dedicate to stocks of your best items. Because irrespective of quantity, the quality of these items ultimately drives your sales in the last two months.
Don’t lose focus on your vendors
While it’s great to plan inventory and sales projections (and feel quite proud of yourself) don’t forget your retail business is not a one-man band. Once you’ve calculated which items you need and what quantities you need them in, the next question to ask is – which vendors? Choosing the right vendor will give you a better handle on delivery dates.
Make sure your vendors are clear with your requirements and if you primary vendor doesn’t have a key item, don’t panic. Someone else is bound to have it and consider yourself lucky you discovered the weak link in the supply chain sooner rather than later.
Keep the phone lines open
Once you’ve got your vendors to agree with your requirements for the holiday season, don’t give in to the urge to kick your feet up and let automation do its job. Think of this as a mission to space. So far, you’ve only gotten past launch. There’s still plenty that could go wrong. Late deliveries in November and December can very easily turn all your hard work upside down and before you can say, “Houston, we have a problem”, you could be looking at lost sales and heavier than anticipated markdowns.
Stay clear of ‘inventory blindness’
When you’re making your list of items to stock for the holiday season, it’s easy to start assuming certain items are going to be a hit. But knowing what you shouldn’t buy is as important, if not more, than knowing what you should.
Take another looks at your inventory and identify those items, which you don’t absolutely have to maintain until the end of the season. These items may have been necessary to complete a full assortment but any money spent on them during the holiday season might not generate the same sales volume as your better performing counterparts and leave you exposed to a greater risk of markdown.
Planning for the holiday season can be a daunting task, but it’s not impossible. All you need is a little foresight and time set aside to get it done properly. In our next post, we’ll go over designing your storefront (both online and offline) for the holiday season. For now, just remember, if you go through planning your #HolidaySales step by step, you’ll end up with a better looking inventory and a cash register that keeps on ringing. In the world of retail, what could be better holiday music?