Retail Red Flags: 5 Mistakes to Avoid Ahead of the Holiday Selling Season
5 Mistakes to Avoid Ahead of the Holiday Selling Season One-Minute Snapshot:
The holiday season is a stressful time for both small and big retailers as inventory planning, logistics, and promotions often bring with them unpredictable challenges.
Alignment with cross-functional teams like operations, marketing, and customer service are crucial for a smooth holiday season.
Merchandising your storefront well, and taking advantage of cross-selling and up-selling, can be the difference between a flat holiday season and a successful one.
Just because the year ends, doesn’t mean the effects of holiday are over. Make sure your return policy makes sense for your business and prepare for returning inventory that may flow in during January.
Read more of our holiday selling tips below!
Holiday carols may still be a few weeks away (no judgment if you’re already blasting Mariah Carey!)—but if you’re in the retail business, the holiday season has been on your mind for many months now. November and December are a crucial period for small businesses and big brands alike, allowing you the chance to not only hit your sales goals for the year, but leave a lasting impression on customers long after the wrapping paper is recycled.
But for all its excitement, the holiday season can also be incredibly unpredictable—especially if it’s your first time experiencing it as a business owner. From increased site traffic to overwhelmed shipping carriers, there are a lot of opportunities for things to go awry—and quickly.
Luckily, the Boon team has seen it all. And while there’s no one-size-fits-all approach to holiday planning, with decades of retail sales planning under our belts, we know the most common challenges you’re likely to face, and more importantly, how to get ahead of them so you’re set up for your most profitable holiday season yet.
Challenge #1: Not having a handle on inventory
Striking the right balance in your inventory may be something you are constantly working on, but when it comes to the holiday season, things can get especially scary.
Whether it’s underestimating customer demand for the latest product trending on TikTok or over-ordering seasonal decor that results in excess stock sitting on shelves months after its relevance, finding that sweet spot with your inventory is a game-changer ahead of Black Friday.
Solution: Get ahead of your numbers
The best way to avoid this is to know your numbers! Oftentimes, brands will make broad decisions, such as ordering the same amount of product as last season or just doubling last holiday’s volume. Make sure to do a close sales read for your fall assortment items or even better, look at your items’ sales trend for the past year. If possible, run a test with a small segment of merchandise and a related promotion to see how your holiday assortment performs relative to your holiday forecast. If you’re unable to run a test before the holiday season begins, it will be essential to track daily sales because it allows you to react quicker and possibly correct issues before they become major “Out of Stock” woes.
Additionally, if you have a brick-and-mortar presence, communication with in-store teams is critical as they can provide insights into what customers are asking about, showing interest in, and gravitating toward. If an item isn’t available in-store immediately, avoid customers leaving empty-handed by offering an electronic back-up option to close the sale.
Is it your first holiday?
It can be difficult to know where to start, but if you have a sense of what your top giftable items will be, make sure to put depth behind them. Focus on initial order parameters like cash flow and minimum order quantities. Any historical information you have—even if just a couple of months—might help you identify peak weeks or top items, and identify what future demand might be. But if you’re still unsure of where to start, working with a partner like Boon, which has visibility into many retailers’ sales curves, could help you build a baseline of what to expect.
Challenge #2: Misalignment with your operations team
While you’re laser-focused on your business’ performance during the holiday season, most warehouses spend these busy months worried about fulfilling the needs of hundreds, if not thousands, of clients.
And like you, each one is expecting their warehouse to handle increased sales in a timely manner. Insufficient attention to your operations team and/or warehouse could result in delayed deliveries, unexpected out-of-stock items, and poor customer experiences during the holiday rush.
Solution: Make it a priority to get on the same page
Don’t just assume your warehouse will be prepared to handle your increased buys. Most warehouses will ask for order and unit projections so that they can plan their labor to support your brand. Without a forecast, it’s unlikely they’ll be able to fulfill and manage your orders within the timelines you need.
Schedule a check-in with your warehouse, operations, and shipping teams to share this vital information. Regular check-ins through the holiday season may even be helpful to ensure you’re in constant alignment. Share any data you’ve observed from early sales or any test runs. If there’s abnormal activity, it’s possible it’s being driven by logistics and you can solve for those issues together. Does your CRM or order placement platform provide insight into order placement and delivery times? If so, these tools might be able to help you gauge your logistics efficiency levels.
Additionally, clear communication to customers about shipping timelines is vital. All shipping carriers experience increased activity during the holiday season, with packages getting lost and moving slower than usual. Keeping your customers up to date on their purchases and setting arrival date expectations upfront can prevent canceled orders.
Challenge #3: Marketing works a little too well
One of the worst feelings you can have as a business owner is seeing your marketing efforts pay off…only to realize that you don’t have the inventory to fulfill customer sales!
When retailers fail to align their marketing strategy with inventory availability, customer frustration, missed sales opportunities, and wasted marketing spend often follow.
Solution: Align EVERYONE on your promotional strategy
Customers and retailers alike know that the holiday season is a competitive time to shop the sales. Whatever your promotional strategy, everyone within your organization needs to be prepared for the ramifications it can bring to their area of the business.
Your marketing team especially needs to be in lockstep with your inventory planner to ensure that items that are being promoted aren’t at risk of running out of stock. Frequent communication will also help your team drive attention to where inventory is available. If you’re seeing large variances between your forecast and average sales rate for promo items, there could be an issue. Review marketing KPIs with your team to see engagement level on promotional items. If focused sales items aren’t on track with your forecast, you may be able to catch over-performance or under-performance and correct as needed.
This is especially important in the age of social media, when influencers have the power to drastically compromise your inventory position. Frequent communication with marketing throughout the holiday season can help you get ahead of these issues—and quickly alert the team if certain ads need to be pulled or swapped out.
Whether you’re aiming for quantity sold or planning to take a loss on a product that draws attention to focus on high-margin add-ons and upselling, make sure you’re not crafting promotions in a way that leaves customers feeling swindled. Copy should appear consistent across ad and site copy and products featured in images should align with what’s actually available to customers.
And since customers are being bombarded with marketing messages from brands constantly during the holiday season, plan to review your competitors' marketing messages and product offerings—if they’re similar to your own, it may hint at a potential issue in your own marketing strategy.
Remember, there’s a lot going on during the holidays and potential customers are being hit from all angles with marketing messages. If your messaging is mixed, it’s likely to be missed!
Challenge #4: Leaving additive revenue on the table
Customers may be coming to you for one specific item, but when you have their attention, it’s an opportunity to expose them to your breadth of offerings.
In the craziness of planning, retailers often fail to capitalize on upselling opportunities, leading to missed revenue potential and ineffective marketing.
Solution: Prioritize ways to cross-sell and upsell
When planning your cross-selling strategy, account for both the promotional point of view, as well as your customers’ needs. What product goes hand-in-hand with what your customer already has in their cart? Based on what you know about your customer, what will people be gifting most? Ask yourself these questions to ensure the inventory you need to promote isn’t sticking around post-new year.
Additionally, be sure to monitor your average basket size during the holiday period. Carts remaining stagnant or decreasing in size may be unavoidable when you’re running promotions, but if people are shopping for promotional items, then ideally they are driving multiple sales, upgrades, or add-ons. If you’re observing this behavior, you may need to adjust your cross-selling strategy.
Challenge #5: Ignoring Return Rates and Timeframes
As a retailer, you love your product and can’t imagine someone living without it, but in reality, the person receiving it as a gift may not feel the same.
Retailers often overlook the impact of return rates and time frames during the holiday season. Clarifying return policies prior to purchase can help mitigate return rates, but it doesn’t always create a welcoming selling experience. Customers may hesitate to buy if they have a very short return window or are limited to store credit only.
Solution: Find the right return window for your business and your brand
If you start a Black Friday gifting strategy in October and the gifts aren’t received until the end of December, make sure your return policy window isn’t too tight or your customer service team will be sure to hear from unhappy customers.
Pay attention to customer inquiries about return policies. Connect with your customer service team frequently throughout the holiday season as they may have valuable insights about forthcoming returns. Increased inquiries around sizing, options, or return policies may indicate gifting purchases and increased risk of returns.
Analysis of orders that include multiple sizes and/or colors may also indicate that a customer is planning on a return once they figure out what fits. Monitor return rates as soon as possible. If early reads indicate higher rates than forecasted (especially if seasonal sales were lower than forecasted), a strategy for return inventory management should be enacted as quickly as possible.
Finally, investing in a post-peak season promo strategy can be an effective way to maintain revenue or recoup sales dollars after returns are made. Regardless of a sales promo strategy for the new year time period, you’d be wise to plan for managing seasonally sensitive inventory that gets returned.
Getting ahead of it all
No matter how things are looking for the season ahead, creating a robust and frequent recap process while the selling season is happening can get you ahead of the game from next year. As hectic as the holiday season is, every day working your business is a step forward in helping you plan better. And though it’s sometimes difficult to hear—the odds of you planning a perfect holiday season are unlikely.
Mistakes are likely to be made—the key to retail planning success is just not making them again! Learning from prior shipping, forecasting, communication, and marketing strategies will help you capitalize better on future opportunities, whether it’s during Q4 or Q2. The more you learn, the more chances you have to standardize your processes and add nuance to them over time until you’ve mastered the art of holiday planning.
Not sure where to start? We can help!
Planning for and managing the holiday selling season is a very involved process—plus, it holds the added weight of being an invaluable time to drive revenue and make customer connections. Boon can help overburdened retailers with specialized expertise in a number of areas, including clarity in sales and inventory planning, strategic planning tactics, in-season reporting and analytics, and contingency planning for when things don’t go exactly to plan. We’ve even created a series of downloadable tools for those who would prefer a more DIY approach to merchandise planning.
With our data-driven approach, retailers can make informed decisions that are focused on revenue-driving tactics and customer satisfaction. Let us take care of the data, so you can take action! Book a free 30-minute consultation here to learn more.
