The holiday season is a critical sales season for many small businesses. According to the National Retail Federation, many small- and mid-sized businesses generate as much as 20-40 percent of their annual sales in the last two months of the year. In recent years, the season itself has started expanding, and stores are no longer waiting to offer promotions.
Many businesses are starting to offer promotions as early as September in recognition of the fact that some shoppers are hitting the stores before Halloween. Online retailers seem particularly apt to stretch the holiday season, offering a full month of discounts (including free shipping) in the month of November. Retailers who followed this model last season realized some significant returns: Sales in December 2010 were six percent higher than the same month in 2009, according to the National Retail Federation. This was in stark contrast to the 2008 holiday season when retail sales dropped 2.8 percent from the previous year.
No matter when you start your promotions, there are many things small businesses can do to get the most out of the holiday sales season. The following are some tips:
- Find ways to stand out that are not related to the products you sell. For example, decorate your store with themes that tie in with community events. Consider sponsoring holiday charity auctions at churches and civic organizations.
- Tap social media to promote holiday sales events. Use mobile apps to draw attention to sales in real time. If you have a Twitter presence (and if you do, learn how to increase your followers here), analyze the hot items potential customers are discussing and gear your inventory and promotions accordingly. Use can use your Facebook fan page to briefly mention upcoming deals without using an aggressive sales push.
- Reach out to customers with holiday cheer. It is important for businesses to send holiday cards to their loyal customers. However, if you are business that relies on a small number of repeat customers, be sure to write your holiday greeting cards by hand and include a personal note.
- Plan ahead to handle holiday crowds. One of the biggest mistakes small businesses make is waiting until the last minute to hire extra staff to meet holiday demand, so analyze your needs as early in the year as possible. Holiday staff can be recruited through temporary services, employee referrals, and newspaper and online ads.
- Lay the groundwork throughout the year. Although the majority of your sales may occur in the last two months of the year, it is never too early to start building customer relationships and loyalty. Use techniques for attracting customers – such as mobile marketing, geography-based promotions, loyalty programs – throughout the year and then customize them to fit the holiday season. Customers that have shopped with you throughout the year could be more likely to visit your store first as they search for holiday gifts.
With the holidays quickly approaching, small retailers should take advantage of an expanded shopping season and explore new ways to connect with customers. Do you have any unique sales tactics during the holiday season? What challenges and opportunities do you typically encounter during this time? Share your comments with the SBOC community below.