A guide to preparing for holiday sales
Who wants to think about the snowy months ahead at the height of summer? Planning for holiday sales in July seems bizarre, but time moves fast and getting ready now will minimize the stress you face in the coming months.
“Make sure you look into your supply chain strategies. To prepare, entrepreneurs need to look at three things: the risks, the timeline and the cost,” adds Ali Lajevardi, Regional Director, BDC Advisory Services.
Below, our experts present a high-level action plan retailers and other businesses can use to prepare for the holiday shopping season.Enlarge the image
1. Negotiate with your suppliers or find alternatives
Supply chains around the world have been deeply affected by the COVID pandemic and the war in Ukraine. To ensure you have the products your customers are looking for come December, start negotiations with suppliers early. And, if possible, ask for delivery in September or October.
"Plan early and purchase early. Ask your suppliers how far ahead they've planned out, and ask them If they foresee any issues," says Tyler Lockyer, Business Advisor at BDC Advisory Services. Lockyer specializes in helping entrepreneurs build their online business.
And don't forget about your secondary supplies or the packaging materials. If you need to change suppliers or find new ones, get on it now.
Depending on your business, you can also try sourcing from local suppliers. One BDC client found success in her soap company by relying on a network of regional suppliers.
"The key is to look at your inventory first and figure out what you can sell during the holiday season," says Lockyer. "It sounds obvious, but if you don't have access to the products, then you can't sell."
2. Analyze your business's historical data to figure out what to sell
Narrow down what you're going to sell in a few months' time. Look at your own records from the last few years: What sold well in the past?
Next, go a step further and do your market research. What new items can you sell? Check not only what the most popular products are, but also which ones have the highest margins. And look at consumer reports to see what they predict will be the hot products this year.
Closer to the holiday season, you can start doing competitive analysis to see what other businesses are doing.
3. Make sure you can deliver
The holiday rush this year will generate an enormous number of packages to delivery. Businesses that sell online should pay close attention to their last mile delivery. Last mile delivery refers to the last step of the supply chain, or the final journey the product makes from the warehouse to the customer’s front door.
“It’s going to be crazy busy this year, so it will be a lot harder to send out packages,” says Lajevardi.
In most scenarios, last mile delivery is the most expensive part of shipping. Check ahead of time that you have the plans and contracts in place to take care of deliveries in November and December.
4. Model out your promotional offers to see if they're profitable
Now that you have a better idea of what you can sell, run financial models and check what kind of promotions and discounts you can afford. By planning ahead, you’ll avoid wasting money giving out blanket offers.
"In a study, 93% of e-commerce shoppers say the reason they abandon their carts is because of the shipping cost," says Lockyer. "But before you hurry to offer free shipping and a discount, do a financial model first to look at your margins. You'd be surprised how many entrepreneurs skip that step."
Planning your promotions is especially important for selling online, where the competition is tough and shoppers are particularly sensitive to the price.
“Look at your prices. They should give you a healthy margin, but they still need to stay competitive. Every single sale should contribute to your bigger picture strategy, such as your profitability, exponential revenue and market share growth,” says Lajevardi.
If you can’t make prices work, re-examine the following aspects of your business:
- Business model
- Product mix
- Customer acquisition strategy
- Operational efficiency (does your business need to be more efficient?)
5. Capture customers now so they'll remember you for holiday shopping
Dave Girolami, a BDC Advisory Services Senior Business Advisor suggests installing customer loyalty programs.
As an example, he points to a chain of retail pharmacies that has a very successful loyalty program. It uses a medication management software that emails customers when it's time to refill prescription. The idea is to not just offer promotions but to provide help and value to your customers.
“Try to think of your customers pain points and how you can help relieve them with your program’s offerings,” says Girolami.
If you don't already use one, consider an email marketing platform like Klaviyo, Omnisend, or Mailchimp. These platforms will help you engage and convert customers. For example, you can use them to send out personalized promotional emails, or reminders about an abandoned cart. When people start making lists for holiday shopping, you want your business to be top of minds.
Be efficient. The more money you make from one customer, the less money you spend on advertising.
6. Make it easy for your customers to buy online
Ideally, you should be regularly monitoring and updating your business's website. But if you need the extra incentive to polish up your online presence, preparing for holiday sales is a great motivator. Check if your website is up to date with the right contact details and product information. If you sell online, check if your online platform is mobile-friendly and easy to use.
Girolami recommends retailers research the latest in-app online stores such as Facebook Shops and Instagram Shopping, which allow people to buy directly from social media.
"What you want to do is shorten the path to purchase and give shoppers an instantaneous opportunity to purchase," says Girolami. "Frictionless shopping is the goal."
Finally, if your website sees heavy traffic, Girolami and Lockyer both recommend putting in automated communications to answer customer questions. A live chat function is accessible and more user-friendly than a call centre, and it's a good way to get customers' details.
"Don't scramble over these big decisions at the last minute, figure it out ahead of time before your busiest period," says Girolami.
7. Create your advertising campaigns
Creating advertising takes time, but it also depends heavily on other factors such as your inventory availabilities. Start planning and budgeting in September, once you’ve talked to your suppliers.
One option to explore is paid advertising such as Google's Smart Shopping campaigns, which lets you create targeted shopping ads online.
8. Hire additional staff for the seasonal rush
To deal with the seasonal rush, you might need to hire additional temporary staff. This will depend on your provincial restrictions, but assuming stores will be open in the holiday season, post your listing early this year. Posting the listing in August and September will give you plenty of time to train your new hires before the holiday rush hits.
October to December
9. Prepare to pivot
You may not have completed every item listed above by October, but all the gears will be in motion. Supply chains could still be affected by a COVID outbreak in China or another unforeseen even, so be prepared to pivot.
Remember that this high-level calendar is not set in stone. Instead, it is a guide to help you plan out a logical sequence of actions.
You might have to change your promotions if a supplier falls through or doesn't deliver or hire more staff if there's more in-person shopping than you expected. But having put all this effort into planning ahead of time, hopefully you're well-positioned to make changes.
Don’t hesitate to contact us if you think you may need additional help to plan for the holiday season.