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As a retail business, the product range you offer might fall under the umbrella of “seasonal sales.” What repercussions does it have on your business and how do you tackle them?
The curse of seasonal sales is felt by many retail businesses, from holiday-related products (decorations, food, event management) to beverages like coffee and juices. These businesses may operate from kiosks in shopping malls, small shops on the beach, or cozy stalls located at popular tourist destinations.
If left unaddressed, these retail businesses will face challenges in ensuring consistent growth.
Seasonal businesses are different from the usual retail businesses as their sales depend on events or holidays only. These businesses cannot experience predictable sales fluctuations enjoyed by other retail businesses because their products are only available in specific parts of the year.
Seasonal businesses have customers who are buying gifts for someone or are treating themselves when they are on a vacation. These buyers are more open to higher-priced items and are always looking for something better than the usual low-quality items being touted in other shops. This allows seasonal businesses to employ unique retail operations which can prove to be very profitable if the business is located at a popular location frequented by loads of vacationers and tourists. Here they can utilize people counting solutions to gauge the customer footfall in different localities.
With the new shopping standards of people in the post-pandemic world, seasonal retailers need to level up their operations to stay profitable. As these businesses mostly have strong footfall or influx of orders for a limited part of the year, they cannot waste time on trial-and-error techniques. Therefore, we have rounded up some tried and tested retail business strategies that can help seasonal retailers increase sales in 2023.
Strategy 1: Work on generating revenue throughout the year
Running a seasonal business has one major limitation and that is the off-season. The strategy here is to transform this weakness into a formidable strength. Instead of grinding sales to a complete halt during the off-season, businesses can use data analytics and forecasts to sell throughout the year.
The simplest way to do this is to diversify business offerings. Businesses can sell related or complementary products by foreseeing customer demands in the off-season and preparing for them in time. This way, seasonal businesses can generate revenue from local buyers during the off-season and stay profitable.
Another way to generate business during the off-season is to diversify into other holidays. For example, Tipsy Elves is a holiday-themed apparel company that focused on selling Christmas sweaters, but it expanded into other holidays such as Halloween, Valentine’s Day, St. Patrick’s Day, Thanksgiving, Holi, Hanukkah, etc. This allowed the business to stay profitable all year round.
Strategy 2: Expand operations into various locations
While businesses can diversify into different holidays, they can also extend into new locations. Muslims celebrate Eid twice a year and Africa and Asia are brimming with Muslim buyers. Similarly, India and China are also great markets where people celebrate various cultural events at various times of the year.
Remember, if the products of a business are not in season in one location, it does not mean that there is no demand elsewhere. For example, there is an online store that sells comfortable pajamas. It goes by the name of Big Feet Pajama Co. Being a seasonal business, it experiences a decline in US sales during the summer months, but that is not a limiting factor for the business. The company targets countries like New Zealand and Australia during the months of May, June, July, and August because fall and winter are in full swing there.
According to a study by Entrepreneur.com, Big Feet Pajama Co. realized the demand for their products in the tropic of cancer and launched an AdWords campaign targeting Australia. The orders were shipped through an external distribution facility in that region to reduce shipping costs. While the prospects of running multi-national businesses are advantageous, companies need to invest in supply chain management solutions such as Microsoft Dynamics 365 to streamline operations and automate recurring tasks.
Strategy 3: Establish thought leadership and build a strong online community
Social media is a powerful platform and seasonal businesses can use it to connect with people all year round and bank on tons of opportunities. Companies can use their downtime to generate great content to educate their customers all over the world. It will help in building authority and a strong community of potential and loyal customers. Regularly publishing social and blog posts ensure that people remember seasonal businesses all year round so when the time comes to sell, buyers know the best place to make a purchase.
Take the example of H&R Block, a tax preparation company that conducts most of its business during the tax season. The company publishes educational videos, social media posts, guides, and blogs all year round. This allows it to not only educate people but also grow its fan base all year round. Through this strategy, H&R Block remains on the mind of its target market and becomes the go-to company for its customers during the tax months.
Strategy 4: Monitor business performance and gear up for the next season
Companies can use retail management software to assess the performance of their business during the past season. They can focus on things that went right and concentrate on the reasons behind the recent success to determine which strategies to continue in the next season. There could be situations that could have been handled differently. The best way to go here is to take notes and employ the best practices in advance to avoid business hampering processes.
Here are some things seasonal businesses can look into:
Inventory management: With high-end software managing their inventory, businesses can analyze items that were sold the most during the previous season along with products that just sat on the shelves gathering dust. This will allow businesses to consider which items they should be reordering and whether there is a need to introduce new merchandise.
Staff levels: Businesses that have the right number of staff at their outlets at all times remain successful during all seasons. For seasonal retail businesses, having enough hands-on deck is paramount as their customers do not come all year round. Retailers have used staff management solutions to ensure optimum staff levels at all times and this is something seasonal businesses should seriously consider for their retail outlets.
Procurement matters: Seasonal businesses should analyze how much capital was spent on procurement and related services. During off-seasons, they should work on finding places they can get better deals. It is the best time to conduct thorough research on the vendors and re-negotiate with the current suppliers to secure better contacts for the future.
Strategy 5: Market yourself to the right audience and give the visitor a compelling reason to buy
Leveraging multiple channels to put your product in front of the potential buyer is crucial to success. As a rule, the potential consumer must see the advert at least 7 times before the purchase is made. This means that as a retail business, you need to put on your creative marketer’s hat and think of innovative and eye-grabbing campaigns to register your brand and product with the consumer.
One common mistake the businesses end up making is to advertise only once the product is available to purchase, losing ample opportunity to build up the hype behind the product. In addition to community building through social channels, retail businesses must captivate their audience and pique their interest months or weeks before the product is launched. This will ensure a steady stream of consumers in-store and online. And those who visit the eCommerce store should be re-targeted through intelligent and personalized ads to bring them back into the consideration set.
Seasonal retail businesses need to be committed to their sales throughout the year. They need to market themselves properly and advertise in advance of opening. Having a good idea of the locally made goods and employing intelligent hiring practices can have a positive impact on the business as well. Launching clearance sales during off-seasons, picking products wisely, and giving customers a good reason to buy will become the ingredients of success in the post-pandemic world. Remember, sales come