For most retailers, monthly volume doubles or even triples during the holiday season. It also seems that every year, retailers are scrambling to make sure they have the items consumers want in stock. This is very apparent in the toy industry when every child wants that ‘special’ toy and hardly anyone is carrying it. There are a few guidelines retailers can use to help to ensure shelves are stocked during the oft-chaotic holiday season.
Preparing for high volume purchasing times, such as the holidays, requires a bit of analytics and a touch of luck. Every retailer should begin preparing at least eight months before the season. This may sound like it is too far ahead, but if you look at when the trade shows are held, you’ll see preparation is the key to success. If you have a trade show in your particular vertical, use some of their analytics expertise. In many cases, they already have some of the data that demonstrates the increase of specific product purchases in your industry.
A second rule of thumb is to use the Internet analytics to see what which products you carry are trending. What are some of the latest upgrades to newer technologies or the latest craze in flavor or color? These will be major factors for decisions in consumer purchases. Some items may have been experiencing a slow increase in popularity, while others will probably be favorites for just one season.
If you have a website that lists products, make use of your platform analytics to see what the most popular items were last year, as well as those that have maintained high volume over time. Remember: Gift buying is on everyone’s mind, but consumers will also be purchasing mainstay items they would normally buy. Use the search statistics from your website to view what consumers were searching for on your site and do an in-depth review of what some of your top competitors are carrying.
Preliminary review should be eight months before the season. Purchase decisions should be at least six months prior, with a final review and additions at the three-month mark. You will also want to contact your manufacturers to get confirmation on potential shipping delays that are almost always attributable to the holiday. If there are any items that have had a history of being out of stock, order these at the six-month review. Communication with your vendors will be most important three months prior to the onset of seasonal buying.
If your industry involves merchandise that has a limited shelf life, such as food, you will need to work with your manufacturer to place orders at least six months in advance, with guaranteed delivery one month before the launch of the holiday.
Once you have a majority of your product decisions and orders, begin focusing on your marketing. Work with all of the people involved in your in-store and website marketing to craft the messages, signage and special discount deals you are offering. This is the time you can get ahead of your competition through special incentives, such as free (or flat rate) shipping, gift wrapping for in-store and complimentary items for purchases over a certain amount. Typically BOGO’s do not do well during the season as consumers are usually buying gifts for others and do not need two of an item.
With just a few easy steps, a bit of planning, and a lot of observation, every retailer can establish a routine to reduce the stress of the season while helping to increase margins.