The holiday season is without a doubt the busiest time of year for many retail businesses. It’s a great opportunity to showcase all that you have to offer and bring in new products to see how they do. But, the excitement probably wears off when you think about managing all that inventory.
Don’t despair. With a bit of preparation you can manage your inventory during the holiday season, and glide through this hectic time with ease. Here are our tips on meeting your customers’ expectations while staying sane.
Perform demand forecasting
If you were open last holiday season, you already have some great indications about what you’ll need this year. Pull out your historical sales data and review.
Look at what you sold and use that information as your main guide. What items sold off quickly that you could have bought more of? Also consider what you thought would sell last year but didn’t. If items are still sitting on the shelf from last year, come up with a plan to clear those items at an appropriate cost. If items took months to sell off last year, consider ordering fewer or trying something new.
Based on how well your business performed last year at Christmas, you can now set sales targets for the upcoming holiday season, and order more of what you’ll need.
It’s important to consider currently trending items as well. Face masks, for example, may not sell as well as they did in 2020. Identify your most popular holiday items from last year and see if they differ from your items that sell out year-round.
As you work through, be sure to identify any skewed data. Unusual events such as bad weather (or a global pandemic) may have prevented people from visiting your store, and affected your sales. Or they may have created a short-term high demand for an item that’s no longer as necessary.
Check your physical inventory
If it’s been a while since you performed a physical inventory count, a bit of housekeeping may be in order to make sure you have the products you think you do.
Ideally, you are already performing a complete physical inventory audit once or twice a year. This is on top of regularly checking up on sections of your stock, so your system is always accurate.
However, if you haven’t done inventory in a while now is the time to do so. Tidy up, put things in order, and check what your software says you have against physical items. As good as technology is, there can be errors that result in you having less on hand than you thought
This is the time to correct any inventory variances – not when a harried last-minute shopper is standing at your cash register, upset that your website showed an item as being in stock.
If you have multiple locations, take this time to use overstock at one location to replenish what’s lacking at another. Keep in mind, however, that there could be a reason why a certain item doesn’t sell at certain locations.
This is the time to make sure you have the products you need available for sale. A bit of preparation ahead of time will pay off when the shoppers start coming.
Get your orders in
The holidays are notorious for shipping delays and customer service departments being difficult to get hold of.
Once you’ve completed your demand forecasting and checked your physical inventory, get your orders in as early as possible. Because you took the time to identify issues early, you’ll know exactly what you need to correct any gaps.
The earlier you can do this the better. Customers who are able to buy what they need from you when they need it are more likely to keep coming back. Planning well ahead of time enables you to predict those needs and get products in time.
Engage with your customers
One of the greatest developments for a small retail business is social media. You have the power to show your customers what you have in your store. By showcasing your holiday items, you’re more likely to get people in the door.
This is also a great opportunity to ask customers what they want! Engage with your audience to see if they wanted a popular item they missed out on last year. As the holidays ramp up, it’s a great way to gauge what they’re excited about this year.
Inventory can be complicated, especially during the holidays. But this is also a time for your retail business to shine. Get ready early, and look to historical data for clues. And don’t forget to ask your customers what they want. Follow these steps and you’ll move through the holiday season with ease.