For many retailers, the holiday season is rich with revenue opportunity. On average, over 20% of annual retail sales occur between Black Friday and Christmas, a period that accounts for less than 9% of the calendar year. This holiday season, the National Retail Federation anticipates the 2019 season to be even greater than the previous year, which showed a year-over-year increase in holiday spending of 4.55% to $719.2 billion—a 10-year high.
This surge in holiday spending makes it an ideal time of year to try out new promotions, bring new customers into the fold and grab your share of holiday spending. Competition for holiday dollars is fierce, though, advance planning is crucial. Here are three questions to answer as you get started with your holiday planning.
How did I perform last year?
Understanding your previous year’s performance is a great way to set a target goal for the current year. If you’re not sure where to start, consider using the average year-over-year increase cited by reputable organizations that cover your industry.
Small retailers, for example, might use the 4.55% figure cited above. If your business brought in $10,000 during last year’s holiday season, you could use this information to set a revenue goal of $10,455 for this year. Some sectors, like jewelry and toy stores, see a much higher increase in sales during the holidays.
Further, take a close look at which products outsold others and which promotions worked best. As you start thinking about what tactics you should use to reach your goals, those will be the best places to start. Clover customers can use Clover Insights to understand their average sales and highest-selling products during last year’s holiday shopping period to set their targets for this year.
How did similar businesses perform?
Your business is a great place to start to figure out what’s possible. Information about what other, similar businesses near yours were able to achieve during the holidays can add some additional context.
If average sales at similar businesses in your area for last year’s holiday shopping season were significantly higher than yours, for example, you can might consider setting a “reach” goal. Consider the average size of similar businesses in your area when thinking through this.
To figure out how other businesses achieved made it work, you can use old fashioned shoe-leather research: join their mailing list if they have one, poke around their social media accounts, and visit their location to understand their product mix and promotions.
Other helpful information to have include finer data points, like the total number of transactions and average receipt amounts for similar businesses in your area. These can help you make sense of the traffic volume and merchandise price points required to match their results. Clover Insights offers this type of aggregate sales information for similar businesses near your own.
What tactics can I use to reach my goals?
Armed with informed goals and an understanding of the best of your and your competitors’ previous tactics, you can be thoughtful about what specific strategies you’ll use this year to earn more revenue for your business this season. Here are the main areas you can tweak.
Reach more people with your marketing. Is your business a proverbial tree falling in the forest? Step one towards acquiring new customers is making them aware that you exist. From social media to email, SMS text messages to advertising buys on local media, consider ways to make more people in your target market aware of your business. Are you using all the available marketing channels to bring in more customers?
Do more effective marketing. Not all marketing is about acquiring new customers. It’s 5 times more expensive to get a new customer than it is to keep a current customer. Consider focusing your marketing on rewarding loyal customers who already know your brand. For existing marketing, think about refreshing your creative and offers so that people who have already been exposed to your messages will pay attention to them. Make the most of people’s attention while you have it.
Make the most of your staff. Do your goals require you to have more boots on the ground to take care of customers? Sometimes making the most of your staff can literally mean having more of them on duty.
But it can also mean putting your best staff members on duty at a time when your volume potential is highest. Is there a bartender adept at handling a sizable crowd or server that flips a lot of tables per hour? Try to staff those star employees when their potential impact is highest. Clover Insights can see whether sales increase when particular staff members are on duty. Also consider finding out what techniques your star employees use, and training all employees to adopt those habits.
Increasing customer spend. Increasing revenue can be as simple as encouraging existing customers to spend more. Whether by stocking impulse buys right next to the register, training your employees to upsell, or running promotions that reward higher purchases, consider how to get more revenue with each customer visit.
Try new deals and promotions, and take advantage of gift-giving. The holidays can present opportunities to test new deals and promotions at a time when people are motivated to spend. The best of these can be ported into the new year. Additionally, the gift giving season lets you sell to new types of customers altogether: those who aren’t in your target market, but may be seeking products or gift card for people who are. Consider these types of customers when promoting your business and products.
In preparation for the holidays, develop a set of performance targets and consider what levers you’ll need to pull to achieve them.
Clover is sold by leading U.S. banks including Bank of America, BBVA, Citi, PNC, SunTrust and Wells Fargo. You’ll also find Clover at our trusted partners including CardConnect, Restaurant Depot, and Sam’s Club. For more information, visit us at clover.com.