First, there was “Black Friday,” the infamous day-after-Thanksgiving rush to the shopping malls and big box stores for massive holiday deals. Now, there are numerous “buying holidays” vying for customers’ attention, including “Cyber Monday” and “Small Business Saturday.”
For small businesses that are well-prepared, these targeted buying days are a key part of a strong holiday season, when most retailers make 20 to 40 percent of their sales for the year. Deloitte predicts that the trend will continue in 2017 with holiday sales in the U.S. topping $1 trillion.
How can a small business prep for the holidays and compete with big-box retailers, and what steps should you take now for a profitable holiday season? Excelsior Growth Fund (EGF) has prepared this how-to guide to help you. With some extra work now, you’ll be sure to have more jingle-jangle in your holiday season and more cha-ching in the coffers.
Step 1: Get ready with sufficient working capital
Though the holidays seem a long ways away, you can’t afford to wait until customers make holiday purchases to pump up your inventory, secure a space in your city’s popular holiday bazaar, or otherwise present your best merchandise in the most holiday-happy setting (whether online or brick-and-mortar). Your business needs to be ready to hit the ground running once the busy holiday season begins.
If pre-holiday business has been slow or you otherwise don’t have sufficient cash on-hand to give the season your very best shot, talk to your banker or local community lender (like EGF) now about securing a line of credit or short-term loan. Many, like those EGF offers, have reasonable interest rates and repayment terms, and quick turnarounds from approval to funding.
Give yourself plenty of time to shop around and consider all your options. Remember to be wary of predatory lenders and be sure that you know what you’re signing up for before you agree to any loans or lines of credit. Don’t be afraid to ask questions if you don’t understand the terms.
Step 2: Order your holiday inventory now
According to the National Retail Federation, more than half of shoppers begin researching and planning their holiday purchases by October. These days, too, shoppers are far more likely to go to whichever retailer is most convenient, particularly those retailers that are fully-stocked and offering hassle-free returns and exchanges.
One way to ensure they shop with you is to have merchandise readily available. Stock up on your most popular items, the latest trends in your industry and specially branded or crafted gifts that make your merchandise stand out. Talk to vendors and see if you can get discounts for buying in larger quantities or extended payment terms – or discounts for early payments, since you’ll be prepared with enough working capital.
While you’re planning inventory purchases, now is also the time to plan your pricing and marketing strategies. You’ll likely need some type of special offer to entice buyers. Will you offer discounts or bundles (like “buy one, get one” offers) on buying holidays? Maybe you can find a low-cost but desirable “loss leader” (an item on which you break even, or may even lose money, to attract customers and lead to purchases of additional, higher-cost items)?
Developing your strategy now allows you to plan inventory purchases, as well as holiday marketing and advertising, around it, well before the season starts.
Step 3: Staff up (and down) wisely
Along with inventory, another major holiday-season expense is likely to be staffing. This is particularly evident if you have a brick-and-mortar business, but you may also need additional staff to help fulfill online orders.
If your business has been through at least one prior holiday season, review your records to learn about when you truly need additional help (maybe a week before Thanksgiving? Or, maybe as soon as early November?). Keep in mind that increased staffing is an investment in your business’s success, but also hire wisely. Make the most of your investment with these budget-friendly tips for hiring. If temporary help or commission-based salespeople are viable in your industry, consider these cost-effective, short-term options, too.
Step 4: Build your brand locally - get involved in your commercial district
While Black Friday is still the day that shoppers flock to department and big-box retailers, “main street” shopping districts have special events around “Small Business Saturday” (this year, November 25th), an event that’s attracting an increasing number of shoppers each year.
How can you get involved? It may be as simple as contacting a local business association, taking out an ad or extending store hours on Small Business Saturday. Some areas also have season-long events that provide a wealth of marketing and brand-building opportunities. Talk to other merchants in your commercial district if you’re not familiar with how to get involved – “the more, the merrier” is certainly true when it comes to attracting happy shoppers.
A key to boosting sales during this time is to convert lookers to buyers. This is where promotional planning will really pay off. For example, can you offer a small giveaway when a purchase is made that day? It doesn’t have to be expensive and should be something that supports your brand, like a mug for your coffee and tea boutique or a branded mini-gadget for your reclaimed furniture shop.
Even if your business is typically all about e-commerce, setting up a brick-and-mortar “pop-up” shop can be a great way to build your brand locally during buying holidays. Investigate your options – is there an empty storefront in your area’s business district? If so, ask if there are plans to activate it with pop-up shops and express your interest in setting up a temporary holiday store. Some business associations will proactively organize shared spaces for several small retailers.
Step 5: Update your digital sales and marketing capabilities
With easy-to-use and inexpensive e-commerce tools like PayPal® and Shopify®, every retail business should have an online component. This is one of the primary ways to boost your sales, especially on buying holidays like “Cyber Monday” (this year, November 27th). Want more proof? Forrester Research predicts that online holiday shopping will increase by 12 percent this year to $129 billion, and also indicates that “Black Friday” has become as big for online shopping as “Cyber Monday.”
That said, nothing will lose business faster than a website that crashes. Update your digital sales tools now and give yourself plenty of time to work out glitches. Test your e-commerce shop on every smart phone, tablet and laptop that you can.
While you’re at it, look at every way to build your digital brand, from posting on Instagram to taking out cost-effective ads on social media networks, like Facebook, that can boost online visibility and keep your business front-of-mind for target audiences. If you have an email list, send weekly email updates that highlight new merchandise and other specials.
Set your small business apart with great merchandise, awesome service and memorable branding
In today’s competitive retail environment, small business owners must optimize every opportunity for holiday sales. Though it may be difficult to compete with big-box retailers on price and selection, you can leverage your distinct advantages – artisan offerings, local roots, concierge-level service – during buying holidays and all season. With a little extra time, investment and effort now, you’re sure to have a very merry January!