It’s an idea that strikes every retailer around the holidays – to invent something so unique that customers just have to flock to stores to buy it.
But like we saw in our previous blog on Black Friday and Cyber Monday, getting a share of people’s already fragmented attention isn’t always a linear path; especially around the holidays. What’s worse, in the time you take to get your ‘killer idea’ through, you tend to lose customers who simply get impatient during the holidays and just shop elsewhere in the meantime.
Here are some of the merits of working in seasonal batches over trying to develop one-of-a-kind products.
Novelty Fades Faster Than You Imagine
The era of mobile digital has fundamentally changed the way we shop.
Shopping used to be a straightforward experience – walk into a store, browse and buy. But as confirmed in Nielsen’s U.S. Digital Consumer Report, it’s a completely different story today.
Now before the salesperson starts their sales pitch, people are already turned to their phone for ‘expert’ opinions. From price comparisons, research on complementary items, referring to lists, reading online reviews and using online coupons, you are light years ahead in the decision curve the minute you step into the store.
Adding to this, a Google executive said, “More Google searches take place on mobile devices than on computers in 10 countries including the US and Japan.” Overall, the company also acknowledged in Q4 2014, US mobile queries (tablets + smartphones) were roughly 29 percent of total search volumes across the entire industry.
What this means is people are constantly discovering novelties. It’s practically being thrown at them every minute! In such a constant rush of the ‘instantly new’, your new product idea faces two challenges:
It May Not Make The Cut
This may sound like a harsh pill to swallow but in the race to the holidays better this pill than impending losses after the season ends. Sure, your new product idea may be great on paper; it might even look cool and have some interesting utility. But all three factors (concept, design and utility) are completely subjective. While you may consider your idea a winner (and there’s no reason why you wouldn’t) but customers may be enamoured by something shinier, something more unique or simply something quirkier than your newest idea.
Its Novelty May Not Last
This is a genuine problem faced by every product during the holiday season. Even established products that have shown promise during the year may not be hot sellers during the holiday season. But unlike your new idea, no additional time would have been lost in design and production, thus allowing the seller to shift focus to another product that is showing more demand.
New Is Good. Cheap Is Better.
The long-standing debate on this subject has led to polarising opinions. On the one hand, there are artisanal craftsmen and handmade goods creators who feel that a price tag alone is not enough to sway customers during the holiday season. On the other hand, sellers with larger inventories and robust distribution networks are convinced a strategic drop in prices during the holiday season is guaranteed to win them a better share-of-wallet.
While neither side of the debate is wrong, one does tend to be more accurate than the other – customers are looking for the best deals around the holidays and to a certain extent will compromise on the ‘latest’ deal for the most cost-efficient one. This hypothesis is also being tested out by some of the bigger retailers, including Amazon itself. The retail monolith is so convinced that price will be the deciding factor that it has taken a punt on the idea in perhaps the unlikeliest market of all – electronics.
Right now, Amazon is selling its cheapest tablet ever at just $49 and offering them as a six-pack! In fact, to offset how ludicrous this offer sounds, it’s even throwing in the sixth tablet, free.
Now while smaller sellers shouldn’t (and couldn’t) use this example as a benchmark, there is one thing to learn from this example – the willingness to experiment with pricing.
Have A Frank Chat With Your Vendors
Setting up your inventory for the holiday season is all about being able to have the right products at the right time. There are different ways to figure out which items from your inventory during the year will make an impact to your holiday sales (we’ve discussed this in detail in our first blog of this series).
But once you have sorted out which products you want to push, the next step is to talk to your vendors to understand the production cycle for each of those items. This includes having a discussion about:
Time For Production
During the year, getting your supplies restocked may be a bit more relaxed. That’s because you have time to move those items off your shelves and you’re not competing with too many other offers at the time. But during the holidays, every day matters. So, even if a certain item seems popular but takes a longer time to produce than an item, which is slightly less popular, opt for the faster item.
Variants In Design
In case the items you’ve chosen come in multiple variants, take a long hard look at each variant and evaluate if you need to produce each of them at the same quantity you would through the year. For instance, clothing should always be produced in all its colour ways since people prefer choice when it comes to things they wear. But if you are producing a phone cover, you don’t have to offer it in say 12 colours. Just pick the top 3 or 5 highest selling ones and focus your production cycle on those items.
There will always be certain items on your list, which are complicated to produce, but are too popular to ignore. Discuss these items with your vendor and see how you can shift around schedules to fit more of these items into your next production run.
You have to understand and accommodate for the fact that your production vendor (especially if they are based in China) will be dealing with multiple sellers’ schedules before the holiday season. Be frank and ask them to give you a realistic time estimate for your shipment, based on their other commitments.
If any of these factors run into a roadblock, be prepared with a Plan B or an alternate vendor who can take the load. Also, it’s prudent to keep one or two smaller vendors on standby to take over your production schedule just in case something goes wrong with your primary vendor.
Account For Extra Shipping Time
This feels a bit counterintuitive – why should shipping during the holidays take longer? Given the extra demand, shouldn’t it be as fast if not faster? In theory, this is correct. But the on-ground reality is vastly different. The pre-holiday season rush is perhaps the most telling on most major logistics and delivery companies with literally millions of shipments being generated and moved at approximately the same time of the year.
This makes it natural for certain shipments to be delayed, misdirected and in the worst-case scenario, misplaced by the cargo companies. While shipping may seem like it has little to do with the actual production, it still accounts for time. It therefore has to be added to the production equation and thus product decisions have to be varied accordingly.
Now that you have a better understanding of managing your production runs for the holiday season, it’s time to get the word out to your followers on social. In our next blog, we’ll look at how to reach out to customers on social media.
In the meantime, just remember that picking the right products to manufacture is as important as selling them during the holiday season. And by optimising every minute of the manufacturing process, you give yourself more time to focus on selling and thus maximising your returns.