Christmas in July has taken on a new meaning in recent years. It is no longer just the unofficial holiday imitating many of the traditions associated with Yuletide festivities. In many retail circles, it is now the kick-off of preparations for the coming Christmas shopping season. Because without an early and effective plan, you increase the chances of not meeting your revenue goals for the year.
Take, for example, something as simple as inventory. Determining exactly how many stocks to buy and hold is always a challenge because what sold last year probably won’t sell at the same level this holiday season. The same goes for pricing your promotions or allocating the right amount of spend to the right marketing channels. Frankly, the list can get as long as a child’s letter to the North Pole.
This raises the question of how retailers can effectively prepare for the holiday season this year. While the most effective strategy will vary from company to company, it should contain at least the following three components:
1. Plan an extended, e-commerce-driven season.
The biggest promotions of the year almost always take place over the Thanksgiving weekend. That hasn’t changed. What is, is the amount spent. Between Thanksgiving Day and Cyber Monday in 2021, retailers brought in $33.9 billion in online sales— a year-on-year decline of 1.4%. But at the same time, retail sales were higher than in 2020, an increase of 17% in November and December 2021† The anomaly all boils down to one thing: a change in consumer shopping behavior.
Holiday shopping was brought forward in 2021, with more than 50% of consumers say they planned to start before Thanksgiving. E-commerce was certainly the main driver, giving consumers the flexibility to spread gift buying across the season. But retailers were also responsible themselves as an increasing number of merchants started their holiday promotions already mid September† Target went so far as to promise to match the lowest price for every item purchased from Oct. 10 to Dec. 24.
Chances are you’ll see similar trends happening this year. Start planning your holiday promotions today and connect with consumers through digital channels, especially when it comes to mobile. In fact, ‘m-commerce’ (ie mobile e-commerce) was up from the previous year, accounting for an estimated 45.9% of online holiday sales in 2021† So mobile should definitely be part of your marketing mix for the upcoming holiday season.
2. Optimize all systems in anticipation of traffic peaks.
Getting inventory ready should be a top priority. The last thing you want is for consumers to have to deal with out-of-stock items during the Christmas shopping season, especially since there are so many competitors in the ecommerce space ready to step in. But don’t let this get in the way of preparing your website, app, servers, and so on for the potential traffic surge. Sudden spikes in online traffic can cause websites to experience a significant performance drop.
For small businesses, the first step is to review your web hosting plan. Shared hosting can be problematic during busy times as you share servers with many other companies. As a result, your website may suffer from slowness or downtime should you encounter a traffic spike. In other words, make sure the host server can handle your website’s needs this holiday season before November comes and it’s too late to make any updates.
Another area to explore is inter-system automation, which can help close any gaps between plugins, systems, and apps. Many tasks are performed automatically, reducing the possibility of human error when fulfilling orders. These tasks include updating packages to the fastest available connections, implementing a new caching solution, removing unnecessary dynamic content, and increasing security protocols – all steps that can optimize your ecommerce website to better handle traffic spikes.
3. Leverage AI-powered technology for better inventory decision-making.
It’s hard to ignore the many ways AI has pushed the boundaries of what’s possible through machines. Automating mundane, repetitive tasks is often the first thing that comes to mind. Soon after, it’s the ability for businesses to work around the clock — a particular advantage in the e-commerce space — and deploy chatbots for many aspects of customer service.
But when you use AI and machine learning in your business, Ali Hasan R., co-founder and CEO of ThroughPut Inc., warns that efficiency shouldn’t be all about efficiency. “Your whole strategy should work in terms of overall effectiveness rather than ‘squeezing out output,’” he writes. “Therefore, AI and machine learning should improve process flow rather than trying to find process anomalies and defects.”
Plus, AI can analyze mountains of data, often in real-time, and make accurate predictions of what products to stock this holiday season. This ultimately allows you to be more effective in the decision-making process when preparing your inventory.
The Christmas shopping season only comes once a year. Preparation is never a bad thing, so start planning as early as possible to ensure your business experiences the sales it needs to thrive in the months between the holidays.