Believe it or not, 2021 is almost coming to a close.
Nearly a whole year has passed, and the world has definitely changed since the end of 2019 and 2020. Boy does time fly fast!
As with most businesses, they often find themselves making the majority of their revenue in the Q4, and because of this, holiday sales are a crucial time. This rings especially true in the world of eCommerce, where sales have grown 32.2% during the holidays in 2020, compared to 2019 due to the pandemic, according to a CNBC report.
Times are a bit different now due to supply chain disruptions that continue to persist, but there have been some improvements in 2021. Still, there is some uncertainty on what exactly is going to happen next over the winter and beginning of next year.
Some analysts, like Digital Commerce 360 predict that 2021 sales will grow by a modest 12.1% year over year during this holiday season, and this is due to inventory shortages, cost increases and holiday marketing efforts that began earlier than usual.
We’ll have to see how things go, but there’s still room to profit, so you need to get ready!
So in that spirit, in this article, we will talk about 8 ways to prepare for holiday sales, and hopefully by the end of it, you will walk away with a better plan to truly capitalize on this holiday season.
1.Ensure that inventory is in stock
This may seem obvious, but can surprisingly be overlooked. One of the first things to do to prepare for holiday sales is to take stock.
You need to verify your inventory in your stockroom and warehouse in order to ensure that you have enough of what you need so you can avoid shortages and overselling. One of the worst things to do as a store is to sell something you don’t have, or have a customer eagerly waiting for a product, only to find out that it isn’t available anymore.
Definitely a big let down…
So we know the issue, but how do we avoid this problem?
A good methodology to use is the ABC analysis of inventory. This is a methodology that makes you focus on products that sell the most often, and designates them as the highest value goods. These goods are considered A-items, and using the pareto principle, they can be considered the 20% of items that make 80% of the sales, while B items can be 30% of the items that make up 15% of sales, and C being the bottom 50% that makes 5% of your revenue or less.
Doing this method will prove beneficial for your warehouse and sales during the holiday season, and in addition to inventory control, you also shouldn’t be afraid to verify if promotional prices are available with your suppliers.
Supply costs usually consist of 20-30% of inventory costs, so negotiating a better deal might not be a bad idea, especially during Q4.
So if you get a better deal with your supply, and you have a good sense for what the lead time is like, you’re definitely off to a great start!
2.Sell gift cards
This is a classic method, but is nevertheless still a useful one during the holiday season.
Selling gift cards may prove to be very beneficial for your revenue this 4th quarter, and this is because it has little to no profit loss, and customers have a tendency to spend more than what is on the giftcard.
According to a FirstData 2018 study, an average US consumer would spend $59 more than what is actually on the giftcard.
With that in mind, there’s something about using plastic to buy things rather than money that short circuits our brains… for better or for worse mind you.
A good way to promote your gift cards is to put it front and center to your customers, and a simple way to do this is by promoting it on the main page of your store. Putting a big banner, notifying your email list, and doing announcements on your social media channels are classic ways to get the word out about your card.
Giving away some free cards in contests can also be a way to drive some customers to your store, and considering that they may likely spend over the amount, you can make up for the initial loss of giving away the gift card.
3.Promo codes
A gift card can be great to have, but sometimes a promo code can be just as effective for some customers to encourage them to purchase more.
Many eCommerce stores give promo codes in exchange for emails, and this isn’t a bad trend to follow. However, you should also take it a step further, and offer a promo code just because the person visited your site; This rings especially true on a special occasion like a holiday season.
One great way to do this is by offering a promo code at the checkout, and this can pleasantly surprise your customers when they realize that there were hidden savings waiting for them.
But keep in mind, there are other ways to capitalize on this method, and it doesn’t just stop at hidden savings.
Something else you should consider doing is partnering with other businesses, and tapping into other customer market segments that are related to yours. They may have your same base of customers, so one idea is offering your promocode to their customers, and in exchange your partner can get a commission.
Bottomline, if you can create a win-win-win scenario between you, your business partner, and the customer, you’ll probably see a successful holiday season.
4.Loss leaders
This is yet another classic, but still effective marketing strategy that can attract more people onto your site and drive sales.
Simply put, loss leaders are products that are sold below market cost, in order to increase the sales of other products and services in your store, especially the ones that bring the most profit.
There can be some downsides to this method however, such as attracting clientele that may not be able to afford your more profitable products, but it can work if you strategize well enough and if the numbers add up at the end.
When using this method, you may want to consider selling inventory that moves slow.
This is inventory that for whatever reason, a slowdown in the market, competition, is not selling as well as it should have during the year.
In addition to slow moving inventory, selling complementary items can also prove to be beneficial for your business bottom line this holiday season. Any item that another product may need can prove to be lucrative as well, because you can upsell it with your loss leader and more profitable products at the checkout.
5.Holiday contests
In the era of social media, engagement with your customers has been found to be an effective marketing strategy, especially since the last decade. But it isn’t necessarily as simple as just posting a photo or a brief message; there has to be something that piques their interest!
During the holiday season, creating activities or contests that drive your customers to your website and incentivize them to buy is crucial during this time.
So what are some holiday contest ideas?
- 12 days of Christmas giveaway
In this classic method, your customers will sign up for a contest draw, and you will reveal a product that you are giving away to them over the 12 days before Christmas. You can maybe give away promo codes, discounts or gift cards as well.
- Buy one get one free
This is yet another well established marketing strategy for the holiday season, that incentivizes purchasing more of a product, but can also increase the buying temperature of your customers as well, and lead to more sales of other products.
- Early access deals
Why not reward your current customers on your email list by sending them an early access deal before anyone else who visits your store? Give them priority to buy a hot product before the holiday rush, and give them a discount as well.
- Social media contest
Maybe you can ask them to post a photo with a product of yours, show proof that they shared with a friend, or do a more the best photo or review contest.
6.Be creative with payment plans
Many people will want to buy this holiday season to take advantage of the deals, but also because they find enjoyment in the buying experience.
Unfortunately, some of your customers may not be able to afford what you have to offer, either because it is an expensive product out of their price range, or because they have been negatively affected by the current economic situation.
Because of this, it may be a good idea to offer different payment plans for certain products.
Here are some Payment plan options:
- Deferred billing
If you sell very expensive products, like for example furniture, automotive, or other expensive retail items, consider doing a grace period before payments are made. You can also reward your customer with an interest free period if they make a payment by a specific deadline.
- Integrate with Buy now pay later (BNPL) companies
The FinTech field is definitely a growing scene, and key players like Klarna, Afterpay, and Affirm are growing in mainstream adoption. Klarna for example offers their signature Pay in 4 option, allowing the customer to pay once every two weeks.
These companies run on the BNPL model, and according to Yahoo news, eCommerce giants like Amazon have integrated with Affirm to pay later for items over $50. They do run a credit check, but they consider it to be a “soft credit check”,so it does not affect the customers credit score.
So with that in mind, why not offer these payment options in your store?
7.Optimize online store as much as possible
Increased sales are great, but with that comes increased traffic, and a greater potential for technical difficulties to occur, both on the IT side, and the store front side.
On the IT side, this is all too common nowadays, especially with IT infrastructures that aren’t updated correctly, and that have security vulnerabilities that haven’t been discovered.
With that in mind, talk to your IT team or Managed service provider about your concerns, and make sure that they have a back up plan for you if a server should crash from an increase in traffic. Backup servers are an industry standard in the IT field, but make sure they are doing what they’re supposed to before your holiday sales period.
Once you know that your IT infrastructure is good, you then want to make sure that everything from your mobile web pages, sales copy, images, upsell funnels and checkout processes work well.
And by well, we mean fast and without errors.
According to the Baymard Institute, 26% of customers leave a checkout page because it takes too long/glitches, so it’s safe to say that this isn’t a component you want to skip on.
So make sure you do a website audit to ensure that there aren’t any bugs that can lead to a website crash, slow page loading, or worse, issues with checkout and payment; An effective audit should reveal issues if any.
Once you’ve established that things are working properly on the IT side and eCommerce side, a good final step is to have an emergency plan in place so that you won’t panic in the event of a glitch, or in the face of customer service issues.
8.Make it easy to contact support
Tying into the last point about optimizing your online store as much as possible, a critical component of this is adding a human touch to your eCommerce store: Live customer service.
You should have a live chat option, and ideally a representative or representatives waiting. You should also make your phone number or email clearly visible, because the more transparent you are, the more you’ll be perceived as trustworthy. And if you actually help your customers with any queries, you’ll win even more points with them.
Oftentimes, it can be tempting to skip on this component, hoping that no issues will arise, or worse, that your customers will just contact your email and you’ll respond to them days later…
This isn’t a good move, and it can tarnish your reputation, create hesitation to buy products, and also lead to chargebacks if issues should arise with the product quality. The internet is crawling with fraud, particularly since the start of the pandemic, so the last thing you want to do is put yourself in that category in the mind’s of your customers.
So to avoid this, do the right thing, and have representatives available.
Summary
Time really does fly fast, and who knew that we’d already be at Q4!
Revenues may dip a bit this year compared to pre-pandemic numbers, but the opportunity is still there. This part of the year can be profitable nonetheless, and you increase your odds of going in the black by implementing good strategies and by adjusting if things go wrong.
Make sure that inventory is in stock, and be sure to use classic methods like giving promo codes, selling gift cards, and using loss leaders to drive sales for your other more profitable products. From there, you can take it a step further and do holiday contests on social media to drive organic engagement with your customer base, and hopefully attract new ones to your store on the big day.
And if you optimize your store, offer flexible payment plans, and you have good customer support, you’re well on your way to a great setup for your holiday success. Best of luck!