Timing is everything when it comes to seasonal merchandise. One day after the holiday, it’s not going to sell for much more than 50% of the full retail price. When I owned my shop, this was a constant struggle that impacted not just holiday-specific merchandise, but also the larger inventory of regular merchandise that was brought in for the fourth quarter. I recently was asked by a beginning retailer, “How did you handle this? How did you deal with having to lower prices?” My answer was: “I did it smartly and strategically.”
Timing and Tracking
I always found that determining when to discount—and what to reduce—was a project for a calendar. I used large monthly pages taped to the wall so I could think quarterly. I could see the flow of the weeks and establish a countdown and decide when to put goods out, when to emphasize specific products, and when to plan on a clearance sale.
Each year, the big players push holiday displays forward. At this point, Christmas and Halloween actually collide. We “creative types” know that orange and red and green are not great together. We shouldn’t have a mechanical wicked witch flying on her broomstick, narrowly missing Santa in his reindeer sleigh. It’s just not right! (Plus, the witch and her nasty bats really scare the elves.)
My personal preference is for a smart retailer to have Christmas and holiday products on the floor two weeks before Thanksgiving. Put your Christmas merchandise out in mid November. This allows you to familiarize your staff with the new goods and to tweak displays, as needed. You’ll be able to gauge what has caught your customers’ eyes and (hopefully) their wallets as well.
With this advance placement, you all will be ready to go the weekend after Thanksgiving when the buying fever typically sets in. By doing this, you will also be able to engage browsers, and they’re really active this time of year too. I’m talking about the people who come out to stroll through shops and rubberneck enthusiastically rather than buy. Hopefully, they’ll see things in your store and they will return to purchase in the weeks leading up to December 25.
Start Spreading the News
Awareness of buying patterns in general and specifically your customers’ buying patterns will let you tailor your promotional plan to insure the most profitable season. You’ll want to use digital, print, and perhaps even radio to get the word out. You’ll have to tailor this to best fit your perception of your customers’ use of the media.
Use your wall calendar to determine when to talk about what in the media. Don’t forget to use signage in the shop to promote items and to announce what’s coming up. Hopefully, you use a Point of Purchase system that will record all sales by department. If not, perhaps your register has enough departments so you can ring items into the department you have assigned them.
This information will be invaluable when it’s time to establish “open to buys” for the next season. Actually, as you accumulate this information, you can use it to establish your buying budget for the year.
Marking Their Territory
There is definitely a pattern to the holiday-buying cycles. At the outset, you’ll see the above-mentioned serious browsers. They have to see everything available before making decisions. Gift buying begins early, as does the purchase of greeting cards. Stationery and cards with a holiday theme are bought in earnest during the Thanksgiving weekend and the week right after that. These holiday greeting cards have to be written out, addressed, stamped, and mailed by customers. Keep this in mind if you are setting up displays of Christmas and Hanukkah boxed cards. Depending on how many you have ordered and displayed, they have a shot of selling out before the holiday begins.
Sales of decorations, ornaments, wrapping paper, and other merchandise kick in as the holiday draws closer. A few days before the holiday, you’ll get the last-minute crew. This is heavily weighted toward men, who will purchase nearly anything to get it over with. This is a sad fact of life—it’s not just a “wacky” stereotype established in sitcoms or TV commercials.
On the first open-for-business day after the holiday, the bargain hunters are out in force. It was always profitable for us to have the markdowns ready on that day. We knew that within a day or two, the big push would be over. People sometimes wait all year for these reductions and discounts. Many times they use their recently received holiday cash for swooping up sales items, or they use their gift cards for your store to buy these items they longed to acquire during the past months.
Final Word to the Wise
My last bit of sound advice—and it might be the most pungent—if you feel you may have too much holiday merchandise, or general merchandise that hasn’t sold well, consider reducing it for the last few days BEFORE the holiday. Taking 20% and 25% off sure beats 50%.
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