The holidays can be the most wonderful time of the year for retailers of all sizes and specialties.
With gift purchases representing more than 47 percent of total holiday sales and with as much as 40 percent of annual sales occurring in the last two months of the year for some businesses, retailers need to gear up for the season and look for new ways to streamline operations.
These suggestions also carry over into the new year. Remember, in every type of economy, people continue to buy gifts because special events, occasions and celebrations still occur.
According to Fred Lizza, CEO of Dydacomp, a solid holiday plan will attract new and repeat customers, allowing businesses to enjoy strong holiday sales and to continue the trend throughout the year.
In fact, it’s never too early to begin strategizing for the increase in end of year business. Research has shown that nearly 40 percent of consumers begin shopping for the holidays before Halloween. So, what can your company do to prepare?
There are three key steps Lizza suggests small business leaders should follow in order to increase holiday sales:
- Start early. Start advertising sales and specials in late October rather than waiting until later in the year - catch those early shoppers. Consumers have come to expect discounts and deals to appear in mid to late November. The big retail stores are already displaying Christmas trees and decorations. In order to compete, you need to join them because customers are expecting it.
- Have a back-up plan. Considering consumer spending patterns, be prepared with a back-up plan for advertising, coupons and deal offers. If sales start trending down, a new promotion can give you the boost that you need. By solving issues in real-time, you’re protecting yourself from a holiday season in the red.
- Be visible. Communicate with retail partners - make it simple for consumers to find your coupons or discounts because if they find them, they'll use them. There are many third party sites that promote these codes so you need to establish a relationship with them to make the information available.
Here are more suggestions from Lizza:
Promoting A Small Business: The first step in effectively promoting any online business is to make sure the site has been optimized for search engines. A thorough review of the metatags, keywords, and content used throughout the pages should have been completed during the website’s launch. Assuming an SEO plan is already in place, launching a search engine marketing campaign on Google will ensure that the store or business appears in the paid results.
Small business leaders should also look to do banner advertising on sites that its target customer-base is likely to visit, such as relevant associations or organizations. Selling through multiple channels is also important – not only from the company’s website, but marketplaces like Amazon and eBay, when used for the appropriate products, can dramatically increase sales.
Free Shipping is a must have incentive; In addition, “Free Shipping” has become a must-have incentive for consumers shopping online for holiday gifts. Research shows that there is a clear correlation between consumers' use of free shipping and both the dollars spent per order and the overall growth in online spending versus last year.
When retailers offered free shipping deals during the holiday season, each week saw average order values climb significantly and positive spending growth versus a year ago. But when some retailers pulled back on free shipping deals, average order values declined and they experienced negative growth versus a year ago. Offering free shipping and discounted deals for the holidays also seems to combat the growing issue of shopping cart abandonment. But be warned: avoid offering free shipping without a minimum purchase required. Consumers are trained to expect free shipping online but this can quickly erode the profits of an SMB. Making free shipping dependent on a minimum purchase amount ensures that the overall order size of customers increases.
Design Promotions To Encourage Buying: Finally, design promotions that are consistent with and enhance the company’s brand’s image. Take time to review the success or failure of each promotion to determine the value and focus of future promotions. Whether it’s free shipping, rewards programs, or special offers, sales incentives are necessary to compete.
Preparing The Company’s Backend: The best advice for capitalizing on holiday sales is to be prepared. The first place any small business owner should start is with their website. According to a study by Forrester Research earlier this year, online shopping will account for $226 billion in spend for 2012.
Recent research from eMarketer predicts that online shoppers in the United States will spend $54.47 billion this holiday season, up 16.8 percent from $46.63 billion last year. Here are a few best practices to consider when readying the website:
- Minimize updates: Minimize, or completely eliminate, site updates over the six weeks following Cyber Monday. If critical updates are required they should be done during off-peak hours, between 3:00 a.m. – 8:00 a.m.
- Test and Re-test: Design changes should also be kept to a minimum and avoided if the site can go without them. However, many online retailers will want to highlight special holiday promotions online. If updates are made, test those changes thoroughly before they go into production – then test them again. The cost of an error at this time of year is much higher than at lower traffic times. Add software that enables testing in multiple browsers, as there are a number of popular options available and you can’t predict what browser any one customer may be using; create and use a test page, never a live page and keep a backup of the original page in the event there are issues with the new page when it goes live.
- Prepare for the Best: Imagine the highest number of shoppers or buyers that might visit the site at any one time. Now run a test using that number to see what happens to performance and site behavior. This can be done by using software that simulates many simultaneous shoppers all browsing and clicking at the same time, or the old fashioned way by getting employees, friends and others to all get online at the same time
- Upgrade rich media solutions: Now that Adobe has phased out support for Flash, merchants should look to take advantage of other rich media solutions, like HTML5.
- Organize Data: Do your best to make sure your data, such as product descriptions and codes, prices and inventory on-hand information, is up-to-date, clean and indexed. Any bad data could introduce negative changes that result in lost sales.
- Keep Open Communication: Always make sure suppliers support contact information is available and know when they are accessible. Surprisingly, most merchants don’t know the exact times that they can contact their service providers for assistance, and many offer 24/7 customer support services.
- Manage Inventory Smartly: But the biggest pain point for small to medium-sized businesses for the holidays will undoubtedly be preparing and managing orders and inventory. During such a critical sales period for companies, the last thing a retailer wants to do is sell the same item twice.
It takes time to receive new inventory, enter the information in the order management system, and make the products available on your online store. To ensure your site is viewed as current, you need to stay ahead of the game, order early, and sell early.
- Make sure you do a health check on the company’s inventory management system to ensure it is ready for the increased traffic to all sales channels. A good inventory management system will manage the critical aspects of the business - including essential integrations with carrier, payment processing and accounting systems - so you can be sure that inventory is always accurate, orders ship smoothly, and your customer service team can respond with confidence.
If the company develops a solid plan, ready all sales channels and ensure a successful customer experience, it really can be the most wonderful time of the year!