The fourth quarter sales increase is planned, the inventory is bought and now being delivered in-store, and staff are wearing their festive holiday sweaters (?). Welcome to the busiest time of year. Although you've already planned for the season, we've compiled a few in-season tips and tricks to help you push past your Q4 sales & profit goals.
SALES STAFF INCENTIVES
A holiday sales incentive for staff is something worth implementing, even if you have a year-round commission program. You need that extra top-line push for your store, and your staff should be rewarded for getting you there.
It can make sense for you to bring on vendor partners to facilitate, or provide financial support, for a holiday incentive instead of doing it in-house. Most suppliers will have budget set aside (or at the very least, extra product), to reward their best retailers with. Some common examples which are easy to execute:
- Gift cards once $xxxxx of sales has been achieved.
- Product prizes for every $xxxx that is sold from November 1 to December 24 (or whenever your sale period begins).
- Dinner & drinks to celebrate a xx percent increase in sales over last year.
Be strategic when choosing brands to partner with. You want to ensure your staff are focused on the brands which contribute to the highest percentage of sales and profit dollars. For example, if Vans will drive 25 percent of your sales, and Skull Candy will only delivery 1 percent, it makes sense to ensure you have a program with Vans.
It is possible to get a group of vendors to partner for a larger incentive. For example, if you meet your footwear goal for the season, your 4 big brands in the category will contribute $xxxx towards dinner for your team.
Brands which have received significant purchase increases (and the sales plans to go with it), and larger struggling brands are also good strategic partners for this type of program.
Having your most important suppliers - either your BIGGEST or one that carries a HIGH-VOLUME ITEM, hold back-up inventory is extremely important if you hit a strong sales trend.
Identify a release date (the date which the supplier can sell the inventory to another retailer) which is reasonable. Often this is 2 to 4 weeks after delivery, you'll have a good idea of your inventory and sales position within that time frame.
Be realistic about the amount of back-up inventory you may need. Keep in mind this is above your normal purchases, and your vendor is taking a significant risk in buying stock which you may not take in.
Customers love a discount, but often consider 'rewards' to be of comparable benefit. Take a peek at TopShop's campaign with Pinterest. By pinning product, customers are:
- Browsing a greater-than-normal amount of product throughout the site.
Extending your product reach with each 'share' and 'pin.
- Providing that all-important consumer data for you.
- Winning great prizes including shopping sprees, design opportunities, invitation to upcoming events, etc.
Staff need to be on-floor at this time of year, engaging with the customers in front of them. How do you balance that priority with those who interact with you through social media? Retailers like Urban Outfitters consider Instagram to be their best social channel - which is great news because it allows for quick content turnaround - a picture. Regardless of what channels you're using, in-store and product images are quick and easy to highlight. When choosing product to feature, think Neiman Marcus' Fantasy book:
- Best-selling product which will drive sales dollars $$.
- Attention getting product.
BUSINESS MANAGEMENT: Receipts, Inventory, & Early Markdowns
This time of year in particular, it all comes down to inventory levels. Do you have enough to meet, and potentially exceed, your sales plans?
- Receipts: The key to a successful season, ensure your receipts come in early, or at least on-time. You bought great product for the holidays, you want to make sales early, at REGULAR PRICE, and at full profit. Customers expect all product to be on clearance December 24, limiting the ability of retailers to carry-over late delivered goods.
- Weeks of Stock: For your high volume items, do you have enough inventory and weeks of stock, to carry you through to December 24?
- Exception Reporting: This is where you will see your over-performers and your under-performers. Action both. Take early markdowns to drive sales, while you have the traffic in-store, on product which is under-performing. We spoke about this in the last KNOWSHOW session - everything in the middle is doing fine, and you don't need to worry about it.
- BOW (beginning-of-week) inventory levels vs plan: Beginning November 1, measure inventory levels weekly. As soon as they dip below plan, look at your incoming receipts and determine if you need to a) PULL UP DELIVERIES and/or b) ORDER MORE PRODUCT. If you are exceeding your sales plans, or have had any delivery cancellations, you will likely need to order more product in order to maintain your inventory/sales levels. However, if you are not achieving your sales plan, ordering more product may not be the answer.
UTILIZING ECOMM TO CLEAR
This is a topic we'll address in January: when using e-commerce to clear merchandise is a good strategy, and when it isn't.