This article was contributed by our friends at Forbes.
Christmas in July has taken on a new meaning over the last couple of years. No longer is it simply the unofficial holiday that imitates many of the traditions associated with Yuletide festivities. In many retail circles, it’s now the kickoff to preparing for the upcoming holiday shopping season. Because, without an early and effective plan in place, you increase the chances of not reaching your revenue goals for the year.
Take, for example, something as basic as inventory. Determining exactly how much stock to buy and hold is always challenging, as what sold last year won’t likely sell at the same levels this holiday season. The same is true for pricing your promotions or allotting the right amount of expenses to the correct marketing channels. Honestly, 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 this year’s holiday season. Although the most effective strategy will vary from one business to the next, it should include at least the following three components:
1. Plan for an extended eCommerce-driven season.
The biggest promotions of the year almost always occur during Thanksgiving weekend. That hasn’t changed. What has, however, is the amount spent. Between Thanksgiving Day and Cyber Monday in 2021, retailers brought in $33.9 billion in online sales — a year-over-year decline of 1.4%. Yet, at the same time, retail sales were higher than they were in 2020, up 17% in November and December 2021. The anomaly all comes down to one thing: a change in consumer shopping behavior.
Holiday shopping was pulled forward in 2021, with more than 50% of consumers saying they planned to start prior to Thanksgiving. ECommerce was certainly the main driver, offering consumers the flexibility to spread out gift buying over the season. But retailers themselves were also to blame, as an increasing number of merchants began their holiday promotions as early as mid-September. Target went so far as to promise to match its lowest price on any purchased item from October 10 to December 24.
The chances are good that you’ll see similar trends happening this year. Start planning your holiday promotions and connecting with consumers via digital channels today, particularly when it comes to mobile. In fact, “m-commerce” (i.e., mobile commerce) was up from the previous year, accounting for an estimated 45.9% of holiday online sales in 2021. So, mobile should definitely be part of your marketing mix for the coming holiday season.
2. Optimize all systems in anticipation of traffic surges.
Getting inventory ready should be a top priority. The last thing you want is for consumers to be met with out-of-stock items during the holiday shopping season, especially because there are so many competitors in the eCommerce space ready to swoop 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 drop in performance.
For small businesses, the first step is to review your web hosting plan. Shared hosting can be problematic during busier times, as you’ll be sharing servers with many other businesses. As a result, your website might experience slowness or downtime should you encounter a traffic surge. 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 updates.
Another area to explore is intersystem automation, which can help fill in any potential gaps between plug-ins, systems, and apps. Many tasks are done automatically, reducing the chances of human error when fulfilling orders. These tasks include updating packets to the fastest-available connections, implementing a new caching solution, getting rid of any unnecessary dynamic content, and increasing security protocols — all steps that can optimize your eCommerce website to better handle traffic surges.
3. Leverage AI-guided tech for improved inventory decision-making.
It’s difficult 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 opportunity for businesses to operate around the clock — a particular benefit in the eCommerce space — and deploy chatbots for many aspects of customer service.
But when using AI and machine learning at your company, Ali Hasan R., cofounder and CEO of ThroughPut Inc., warns that it shouldn’t be about efficiency alone. “Your entire strategy should operate in terms of overall effectiveness rather than ‘squeezing out output,’” he writes. “Therefore, AI and machine learning should improve process flow instead of trying to find process anomalies and defects.”
Furthermore, AI can analyze mountains of data, often in real time, and make accurate predictions of the products you’ll need in stock this holiday season. This ultimately allows you to be more effective in the decision-making process when preparing your inventory.
The holiday shopping season comes but 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.