Best Practices for the Gift of Successful Holiday Sales
For some retailers, holiday sales can represent up to 27.4 percent of annual sales, and in 2017, overall retail holiday sales are expected to increase from 2016. Debra Glassburn, Partner, Columbus Consulting, offers these tips to help retailers make the most of the 2017 holiday season and leverage every sales opportunity.
Understand historical trends. Having a clear understanding of your historical trends for seasonal goods—sell through by week, week-to-week sales builds, etc.—is critical for forecasting seasonal categories this upcoming season.
Attribute and identify products. Each product should be assigned an attribute that identifies either the season—fall, holiday, winter—or the out-of-stock date (typically Jan. 1 for holiday motif items, Feb. 1 for winter) based on the retailerís strategies.
Recognize collective buckets. By assigning seasonal attributes or out-of-stock dates, retailers can understand collective "buckets" and forecast by historical trends with the goal to exit the merchandise based on the seasonal code.
For example, seasonal buckets that are underperforming compared to the sell-through rates achieved historically typically indicate inventory is backing up and markdowns will be increasing.
The lesson here is that, in most cases, taking pricing action earlier rather than later to increase sell throughs will not only be more profitable in the long run but also will reduce the end of season liability. Taking action when the traffic is higher—in December vs. January—is almost always the better decision.
Having planning and merchandising strategies in place as the holiday season quickly approaches allows retailers to perfect their holiday strategies and maximizes efforts.