For many retailers, the holiday season is rich with revenue opportunity—even in the age of COVID. Historically, on average over 20% of annual retail sales have taken place between Black Friday and Christmas, a period that accounts for less than 9% of the calendar year. Deloitte’s 2020 holiday retail survey says that sales this holiday season are expected to grow between 1% and 1.5% this year, bringing in up to $1.2 trillion in overall holiday spending.
The National Retail Federation anticipates the 2020 season to be as strong as ever, with consumers planning on spending close to $1,000 on gifts on their families, friends, and themselves, in an effort to focus on some of the more positive sentiments associated with the holidays, and shift their attention away from the uncertainty and stress of the pandemic.
Perhaps more than ever, this is an ideal time of year to try out new promotions, bring new customers into the fold, and ensure healthy holiday cash flow. But competition for holiday dollars is always fierce, so here are three questions to consider as you plan your holiday campaigns.
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. According to Statista.com, the year-over-year increase in holiday spending from 2000 to 2019 was 4.55%.
So if you’re a retailer you might start with this 4.55% figure. 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 of your products outsold others and which promotions worked best—but not just during last year’s holiday season. Take a good look into what worked throughout the pandemic since it began, as you might start seeing some trends that did not exist before (namely, an increase in online shopping, contactless payments, and curbside pickup or delivery).
As you start thinking about what tactics you should use to reach your goals, these 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.
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 might consider setting a “stretch” goal. Consider the average size of similar businesses in your area when thinking through this.
To figure out how other businesses 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, read their reviews, and visit their website to understand their product mix and promotions.
Other helpful information 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.
Armed with informed goals and an understanding of the best of your and your competitors’ previous tactics, you can be thoughtful about what strategies you’ll use this year to earn more revenue for your business this season. Here are some key areas you can focus on:
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 online, or on the ground to take care of customers? Sometimes making the most of your staff can literally mean having more of them on duty, whether in-person, with PPE and at a safe distance, or fulfilling orders coming in online.
But it can also mean being more strategic, and paying attention to what your customers care about the most. For example, according to the same Deloitte 2020 holiday retail survey cited above:
Given the concerns about COVID-19, staffing up for your physical location may not be the best move, but investing in training your staff to conduct safe and socially distanced payments and pickup, is.
Remember, also, that Clover Insights can see whether sales increase when particular staff members are on duty. In addition, if there are specific approaches your star employees use that cement customer trust and lasting relationships, consider training all of your 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 or promoting them online and on social media, training your employees to upsell, or running promotions that reward higher purchases, consider how to get more revenue with each customer visit, whether in-store or online.
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.
Above all, never forget that the holidays are first and foremost a season of joy, warmth, and celebration, and this year, all of us need all of that more than ever before.