Depending on when you’re reading this, the holiday season will soon start or already has begun. With a string of celebrations from Thanksgiving through the end of December, this is often the most important time for MI retailers. According to the National Retail Federation, many small and mid-sized retailers report that as much as 20 percent of their annual sales occur during the holiday season. Shoppers are in the mood to buy, and it’s up to retailers to match this surge in the purchase cycle.
But why should the momentum stop after the holidays? It’s important for smaller retailers to find a way to keep some of the holiday energy maintained following the festivities, even reinvesting in infrastructure with a portion of fourth-quarter profits as appropriate. Despite it being the busiest time of year, it is also imperative for MI retailers to deliver top-notch customer service, stock inventory strategically and get a stronger understanding of their purchase funnel — top to bottom — in order to prevent missed opportunities to build loyalty and incremental sales in the new year.
Building a Brick-and-Mortar Advantage
In the Amazon era, many are quick to crown ecommerce as king. However, brick-and-mortar stores have a distinct advantage. The ability to engage the customer face-to-face and talk candidly with an expert sales contact on the store floor helps shoppers know they are making the right decisions. This holds especially true for a purchase as emotional as a first instrument or microphone for content creation. Many musicians and content creators seek to see, touch, feel and try out items, which is a main reason they choose to shop in physical stores versus online. With guidance from an experienced salesperson, consumers can leave feeling confident with their purchases, which isn’t always achievable when buying online.
During the holiday period, when the level of consumer spending peaks, a welcoming environment also becomes a crucial element of retail success. A family member may seek an instrument for their child or want to talk about signing a family member up for surprise lessons. New customers may be intimidated by a store they have never been in, surrounded by products they may or may not understand. A patient and helpful staff will go a long way, and these new customers may come back the following year or refer your store to their friends.
Simultaneously, retailers need to provide white-glove service to their most loyal repeat customers during the fourth-quarter shopping rush. An intimate and well-planned holiday event for loyal customers demonstrates how much you value their business. The investment does not need to cost a lot or take up too much staff time, either. For example, an MI retailer can host a coffee and bagel hour before the store opens that’s invite only to give these customers a jump on holiday deals. Or, an exclusive question-and-answer session can be organized after hours with a favorite local artist and some light bites. The exclusivity among loyal customers is sure to pique additional interest.
During the holidays and beyond, it’s extremely important to find a way to connect with customers personally and cut through the endless noise of transactional messages. Offer certain perks for competitive differentiation around the holidays, such as deals on favorite items, free or discounted shipping, gift-wrap services or extended holiday hours. Another tactic that will help your store stand out is personalized follow up with customers via email or phone. After the rush of the holidays is over, reach out to see how the purchase is working, if they need any assistance or what else they may be looking for in the future. Increasing customer lifetime value involves building and maintaining customer trust after the deal is done and they have purchased the product. This is a tried-and-true sales tactic that customers always value, and it has even greater impact during the holidays.
With more than 65 percent of customers conducting online product research before stepping foot in a store, it is important to also cater to your customers with in-store technologies to help simplify their purchasing decisions. Omnichannel customers evaluate products online and then come into stores to collect their online purchases. Consequently, they often end up shopping for more than just the original item bought online.
Social media can direct customers to in-store-only deals, or you can consider an in-store computer or iPad station, so a customer can order something that is customized or not currently in stock — crediting them in real time on shipping fees to reduce frustrations. In addition, features such as in-store pickup and the ability to accept mobile payments are helpful to driving customer engagement in today’s digital age. Instead of thinking of the digital retail space as the competition, embrace it.
Have an Inventory Strategy
Most businesses have a pretty good idea which items are their best sellers. Having the right amount of stock at the start, middle and end of the holiday season requires stores to carefully assess last year’s holiday sales, as well as trends for the current year. The goal should always be to have enough of your best items in stock for your customers, while avoiding excess inventory at the end of the season. Businesses also need to consider inventory needs for customer returns, exchanges and gift card shoppers after the holidays end.
So as the holidays approach, you want the bulk of your inventory to be your best-selling items. And just as you should identify your winning items before the season starts, you should also identify items that aren’t flying off the shelves. You may want to consider discounting these items or creating a bundle of slower-selling SKUs along with a complementary popular product. Merchandising your top-selling products front and center will help to grab your customers’ attention, and in many cases, generate sales with higher profit margins.
Inventory organization is also paramount for today’s shoppers. They are used to having the exact item nearly at their fingertips when searching on Google or Amazon. A disorganized warehouse can also lead to confusion about what inventory is truly available. To avoid misunderstandings on stock quantities and whereabouts, stock rooms and warehouses should be as organized as a storefront. Make it simple to track down inventory. Create clear labels and leverage sales data to see which items are often purchased together. You can then group these items together in the warehouse for faster picking.
Most retailers think that their heightened profit opportunities occur from October through December. However, a lot of that order activity extends beyond the new year. According to a recent study, only 5 percent of holiday shopping occurred after Dec. 25 in 2012. In 2017 however, among those who shop after Christmas, 38 percent planned to continue taking advantage of post-holiday deals. Make sure you have the organization to support shopping activity into January by consolidating any extra stock that you might have from the holiday season.
The Importance of Data Tracking
By tracking analytics throughout the holiday peak season, you will be able to make tweaks to your holiday selling strategy along the way, or more simply, identify some new opportunities for the year ahead.
Following the holidays, if possible, businesses should invest a portion of Q4 profits into new or improved customer relationship management tools to up-level all facets of their business. Customer relationship management (CRM) tools help businesses to gain insights into customer behaviors and modify their business operations to ensure that customers are properly served. There are many potential benefits, including the ability to anticipate needs based on past trends, understand customer requests, and identify which of your customers are profitable and which are not. CRM service providers such as Epos Now or SalesForce can provide web-based CRM solutions for your business and have accessible packages for smaller businesses. Squarespace is also great for CRM tracking if your current website is already operating on the platform. This software is ideal for quick holiday tracking, especially if your company does not have the in-house ability to tackle the task. An ideal CRM solution should be able to collect information about your customers and process that information to show you what successes you had, what can be improved next year and what steps to take in the months following the holiday rush. You can then use all of this information from a CRM to make changes to the ways in which you operate along with your customer service model.
While the holidays can be stressful, remember that they present an opportune time for your business to understand its customers. Yes, the holidays are a great time to boost sales, but this is also a great period to evaluate staff performance, product perception and merchandizing needs. Upon evaluation, set new performance goals and start the new year on a strong note so you can continue provide customers with quality service for the remainder of the year.