It should come as no surprise that Back-to-School retail sales were lackluster. Analysts had been predicting poor results for months according to an article in the Wall Street Journal.
The big chain results come out tomorrow, but retail metrics firms expect sales to fall 3.6-3.8% versus prior year. And back-to-school is a big bellwether for the holiday season, which retailers recognize will be slow.
So, how does that impact what you’re going to do for the holiday season?
THE REAL WORLD RETAILING TAKEAWAY
The volatility of sales during the holiday season means you have to be nimble, with multiple backup plans.
All bets are off this holiday season as retailers try to anticipate finicky consumers’ holiday shopping habits. Here are a few things you can do to prepare:
Cut inventory for holidays. The big guys are cutting inventory from 8-15%, anticipating a slow holiday season. Your trending this year should help drive how much you buy for the holidays. If you’re down 10% in sales YTD, you should analyze your current inventory position and cut back by at least that much, if not more – better to be stuck with less merchandise than have too much that you’ll have to discount to get rid of.
Plan for emergency influxes of product. Create contingency plans with vendors to get more merchandise quickly if sales prove to be better than expected. What do you expect to be best sellers? How quickly can vendors fill orders for the products and get them to you? Having the backup plans in place means you can buy less up front and reserve working capital.
Plan ahead for value. Big retailers are trying to avoid the discount bloodbath they took last holiday season by buying less inventory, allowing them to hold price on more products. You should do the same. But you should also plan on gift sets and other value-oriented items, as well as lower priced items overall. No doubt this is going to be a year of austerity for the holidays so make sure you’re ready to fill consumers’ needs for value.
Offer little gifts. I’m a big proponent of stocking stuffers. Since many consumers will be cutting back, wanting to still give gifts, but not spending as much, providing little gifts at great price points can still help drive sales. Stocking stuffers are a great way to offer consumers gifts that they can afford, and they always are a great add-on sale as well.
Stay tuned for the big back-to-school sales reports tomorrow.
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