Holiday Season Challenges for Small Businesses
The holiday season is upon us. The festive commercials are airing. Black Friday teasers have been leaked. Storefronts, shelves, and window displays have been Christmastized, and Thanksgiving is only 2 weeks away. Needless to say, if big box stores are ready for the holiday rush, then small businesses need to be too. Small businesses face the cutthroat holiday season with limited staff and small budgets, and these challenges call for creative solutions and a little help from some strategic software.
Inventory management is an everyday struggle for the small business, exacerbated only by the whirlwind of the holiday season. What do you stock? How much? Do you have the capital to invest in what you need? What if you can’t get the stock in time, or you run out before the season ends, or it doesn’t sell? Small businesses need to do what the big guys do: forecast. Look at last year’s holiday sales and this year’s best sellers to forecast how much inventory to purchase.
The bulk of your inventory should be your best sellers. Identify them before the season starts, so you have time to stock up. Also identify your worst selling items and liquidate them to free up shelf space and capital. Don’t just stock the run-of-the-mill items. Invest in a few unusual and unique products that will make your business stand out from the competition. You may have something that your customers didn’t know they needed or couldn’t find anywhere else.
It’s never too early to think about next year’s holiday season. Implementing inventory control software can help you to keep track of your stock with barcode technology, notify you when it’s time to purchase more, simplify the returns process with barcode labels, and generate reports that help you plan for every promotional period and holiday. Inventory control software can reduce the stress of at least one part of your hectic holiday season.
The 2014 season is predicted to represent 20% (even up to 40%) of retail sales for the entire year. It’s no wonder that pricing your stock correctly is so important each holiday season. Do you raise prices to increase margins or decrease prices to encourage sales? By how much? What discounts or promotions do you offer? Do you raise prices to compensate for the discount?
Let’s face it, small businesses cannot compete with big box store prices and their buying power. Compensate by offering incentives, such as children’s activities or holiday crafts, festive treats, or a free picture with Santa with purchase. You may know a retiree who likes to get into the holiday spirit and looks a little like Santa. Customers with children will appreciate a welcoming, family atmosphere in which to shop.
According to the CFI Group, almost 30% of holiday consumers with spend 50% or more of their holiday budgets between November 28 and December 1. Are you ready to claim your chunk? Small businesses just don’t have the capital for expensive marketing campaigns like the big box stores. So you need to get create with the tools that you have.
Social media is the marketing hot spot. Crimson Hexagon and The NPD Group says that Twitter conversation volume is highly correlated to sales. So post limited time offers or one-day deals on social media. According to the parago shopper study, 8 out of 10 consumers are willing to drive out of their way for a $10 rebate on $50 spent. Consider such a rebate for full-priced purchases or customize it to your products.
Everyone loves free shipping. The CEO of Kinoli indicates that free shipping is the number 1 promotion to which consumers respond. Consider offering free upgraded shipping all season or expedited shipping the closer the holiday gets. Check with your shipping company, and if they can’t offer you the best deal and the fastest shipping options, then switch to a company that can this holiday season. Don’t forget the gift wrap too! Offering a stress-free one-stop-shop where your customers buy their gifts and get them wrapped and shipped will set your small business apart from the rest.
Finally, it’s not too late to implement a CRM solution which can help you collect and organize customer data, including name, contact info, purchase info, promotional response info, etc. You can grow your email list, advertise based on customer purchase history, and encourage repeat business. The data you collect with a CRM solution will be extremely useful when it’s time to forecast for the next holiday season.
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