This year has been really tough for retailers and the festive season is going to be even tougher. Generally speaking, this is always an exceptionally busy time with many unusual demands being made on retailers. This includes managing staff and customer expectations, juggling marketing activity and tweaking operations to handle the Xmas rush. But the key to a successful festive season period lies in being prepared. With this in mind, we have rounded up the key challenges and necessary preparations to help you get your festive house in order.
So, what are the challenges facing retailers this festive season?
Implementing reverse logistics
Retailers understand that people often receive Xmas gifts that they may not want to keep. This means that the store owner needs to be ready and able to process these returns. Once items are returned, the retailer needs to come up with efficient strategies to quickly get this volume of goods back into the supply chain so that they can be re-sold to another customer. Further to this, online shopping behavior has changed and the market has radically shifted during COVID-19. While online is another great revenue stream, it also means that online shoppers will be over-buying to ‘browse’ at home and then return whatever they don’t want. Since retailers often outsource parcel shipping to third-party services, this augmented digital turn-over and return process can become very pricy for the retailer and this needs to be planned for.
Shifting to customer preferences
In a normal year customer tastes and preferences are a bit of a gamble. But during the Pandemic it becomes exponentially trickier. Back in April the surprise “golden ticket” items were hand sanitizer and toilet paper, and the high demand made it next to impossible to procure these items on such short notice. Now we are seeing the effects of other big hit items like solo exercises options and in-home entertainment. As a retailer it will be very important to plug into the zeitgeist and carefully select your inventory according to people’s needs and wants in a year like this. Making sure you avoid shortages of in-demand products and offer an enticing variety of goods.
Reconsider promotion schedules
No one could have known how retail sales would dive in the first half of 2020, and now many retailers are having to think on their feet and entice customers in order to move old inventory. COVID-19 caused serious bottlenecks in the retail supply chain and the festive season will see this too. In order to alleviate this pressure, consider changing up promotion schedules. This was done with Amazon Prime Day, where Amazon strategically delayed their promotion until October 13th and 14th this year. The plan here was to try and tempt customers into doing their holiday shopping earlier than usual, presumably in order to reduce the pressure on their supply chain.
What should your retail store be doing to prepare for the festive season?
Act now
The rush is almost upon us. So, create a strategy and get your suppliers on board so you can all work together. Compare this to last year’s activity and then tweak realistically to adjust to the Pandemic.
Hire staff and increase digital support
Now is the time to be hiring additional staff in order to help you service the high demand on your establishment. It is also worth creating a ‘digital twin’ on your supply chain. Meaning that whatever would happen in your bricks and mortar store, should have a corresponding staff member to manage digital orders.
Make your store feel festive
Customers love coming into a store that helps them forget about reality for a while. So, try and make your shop floor feel as enticing as possible. Starting with your window displays which should proudly display your most desirable goods.
Create special holiday promotions
People have had a hard year, but they still really want to shop. Make sure that when they do buy, that they buy from you. Entice them with offers that they simply can’t refuse. Also don’t forget, that the January sales are coming around soon, and more and more they are starting earlier than before. So have a strategy in place and be ready for this follow-up activity.
The bottom line
We know this year has been exceptionally tough for retailers. So we want you to grab Christmas with both hands and take full advantage of the festive season sales. Whether you are planning exciting promotions, hiring more staff, preparing for more online sales or fitting out your store, we at Merchant Capital can help with the working capital you need to fund your busy operations. Contact us today for fast, efficient funding and turn things around this festive season.
