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It’s been a challenging year for the Australian retail industry, with forced store shutdowns and significant revenue losses.
Finally, some good news: Santa Claus is coming. Which means the biggest day on the shopping calendar just months away.
After a difficult year, retailers are anxious to recoup as much revenue as possible.
The tricky thing is, it’s hard to predict what Christmas 2020 will look like in Australia.
What’s worked for you in the past might not work this year, as we expect a huge swing from in-store foot traffic to online shopping.
So how, exactly, do you prepare for the unknown?
To help you prepare your retail business for the great unknown of Christmas 2020, we’ve created a 90-day plan. Complete with actionable information.
There are five key areas to focus on:
Many brands and retailers will already be in preparation mode, but if you haven’t already started to prepare, now is the time to start, and this article gives loads of helpful tips with a 90-day plan.
And if your teams are already on the case, this article can serve as a spot check that you’re on track for success in planning your marketing, inventory, and retail operations.
The best part is you can head into the silly season knowing that you’ve got everything covered.
All retailers are searching for the magic answer. The fact is, no one knows how Christmas 2020 will play out in retail.
We might be lucky. Australian stores might all be open to business as usual, with the relieved public happily shopping for gifts. (We’ve got our fingers crossed for this).
Or we might be unlucky, with parts of Australia in lockdown (which we sincerely hope doesn’t happen).
What this means is:
Most likely, Australian Christmas retail will be somewhere in between, with a mix of customers who will:
Being prepared for online shopping is an insurance policy against store shutdowns:
You’re 3 months away from Christmas, and (if you haven’t started already) September is the time to start your high-level planning.
Some of the most crucial areas for retailers to think about are:
Let’s look at each of these in more detail.
A good place to start is to review key reports from the previous year (2019) to understand performance, and then leverage these reports to make key decisions for your planning.
There’s no guarantee in the time of COVID, but it’s still best to start with data, not hunches.
This report will give you details of how much stock was sold, broken down into various ways such as by departments, product categories, and individual lines.
This will help you to work out sales targets and required stock for this Christmas.
Review the retail sales report by day, by week, and by hour to better understand the key strengths of the business as well as the opportunities. Understand peak sales times, and the slower sales periods.
This information will help you to accurately prepare your staff roster and ensure you have the correct number of staff in place.
This report should indicate the individual lines that you carry in the lead up to Christmas. Stock reports will help you assess what worked well and what didn’t work well:
Based on this analysis you can determine which products you need to order.
There are various types of costs reports that will give you information about costs you incur as part of running your business. By analysing these cost reports, you can try and find ways to improve your profitability.
Three examples of cost reports are:
This report gives you information associated to staff wages, and these costs need to be evaluated together with the staff roster.
Based on your experience during COVID-19 lockdowns and the months ahead, are you expecting an increase in sales at Christmas time, or a decrease? You will need to assess whether you may require more or fewer staff for the Christmas period.
Store operating costs:
Is there an opportunity to renegotiate existing leases or come to new arrangements with landlords? Many businesses are seeking rent relief due to the current trading climate.
Are there any government incentives or support available? If your business is eligible for Jobkeeper, are all eligible staff currently enrolled in the program? Talk to your accountant about your options.
This report details your current agreements with suppliers and how much you are spending with them. Can you renegotiate purchasing contracts with suppliers to secure better deals?
These are just 3 examples of cost reports. Look for opportunities to improve your trading margin by reducing those costs.
Now that you have completed your stock analysis (using the Sales report and Incoming Stock report) you understand which inventory you need to clear, and what you need to order.
Keep in mind the impact that COVID-19 has had on your business.
Depending on your type of business you may have been impacted positively or negatively. For example, the online beauty sector has experienced a boom, whereas the fashion industry has largely faced a significant drop in sales. As a result, some businesses will be looking to order greater volumes of stock than usual, whilst others may already have a surplus of stock due to decreased sales.
Also consider potential:
Careful planning will ensure you have adequate stock supply coming through to support your Christmas sales targets.
Current stock holding:
Assess your inventory for stock holdings that should have sold in early 2020 but sales were stifled by shutdowns. Seasonal products may need to be heavily discounted in order to move them.
Your purchasing team can enter purchase orders and purchase requisitions into their inventory management software solution and email them to suppliers from within your ERP solution.
Expect AusPost delivery delays and start your marketing campaigns early.
What type of promotions will you offer to draw in shoppers? Your past sales data will tell you which promotion types work best for your customers. Some examples are:
Can you promote and clear out excess stock lines? Get creative with your sales and marketing teams to design bundles or offers to turn that stock into cash.
Speak to suppliers to see what type of supplier funded promotions they can offer.See if you can have exclusive rights to distribute a particular product. (For example, a Qdos wine industry client is the sole distributor of a highly sought-after wine vintage, which they will be promoting for Christmas).
Make sure you order plenty of stock of your Hero product, and plan how it will be marketed – MYER’s 2019 Christmas campaign included promoting the Hero product on YouTube.
The easiest gift for shoppers is to purchase is a Gift Card. Ensure you have plenty of gift cards available in your stores.
Allow customers to buy physical gift cards online, to be posted directly to the recipient.
Create a lovely e-card for customers to email a gift card to their loved one (the perfect last-minute gift).
Loyalty programs are an important part of your CRM strategy, and can dramatically increase customer lifetime value. Make sure you have a loyalty program in place. Review your loyalty program terms and conditions – consider offering bonus loyalty points for purchases made leading up to Christmas.
Review your warehouse and ecommerce fulfilment processes and ensure you have a backup plan.
It’s imperative that stock can be received into warehouses and dispatched as efficiently as possible. Christmas Eve is a delivery deadline that can’t be missed, so you can’t afford any slip-ups.
Plan for scenarios in which business units can’t operate as usual for a short period. This could be due to increased demand, or due to a localised COVID-19 outbreak. So have a Plan B – be prepared to switch order fulfilment to a third-party logistics carrier (3PL) if your warehouses are affected by shutdowns.
Advanced inventory management software systems ensure that a technical solution is available to quickly meet the needs of a new partner. For example, a Qdos client (national retailer) moved to a 3PL for their web fulfilment due to the increase of demand due to the pandemic. The same outcome may be required in situations where warehouses have a COVID outbreak/shutdown.
Offer customers convenient options such as ‘click and collect’ (where customers can buy online and pick up from a store location of choice) – in the event retail stores cannot be open for customers.
Your assessment of the Sales Report will help you plan store trading hours and staffing requirements during the Christmas period. Base the staffing on what your trading hours will be.
Consider the impact of COVID-19 in your planning – will in-store trading hours need to be reduced?
On the other hand, online trading may be busier than usual, and you may need more warehouse staff for order pick, pack and dispatch.
We are living through unprecedented times, with store shutdowns being imposed on businesses nationwide. Victoria has already experienced two shutdowns. It’s important to plan for a potential lockdown in case there is one leading up to Christmas.
What will it mean to your business if there’s a state-wide lockdown leading into Christmas? Will you be forced to trade online only?
For example, your marketing strategy may need to shift to email marketing, social media, and digital catalogues instead of printed catalogues.
Staffing requirements will inevitably change – you will no longer need in-store sales staff, but instead you will most likely need increased staffing for the online arm of your business, to pick, pack and dispatch online sales orders as quickly as possible. These teams will need to physically distance to stay safe.
For stores that are open during the Christmas period, what COVID-19 rules and regulations do stores need to have in place for shoppers to follow? You may need to order masks and hand sanitiser to protect your staff and customers.
Your 60-day plan starts in late October. Your plan is in full swing and stock is on its way.
Go back through the ‘90 day plan’ and ensure that you have actioned all tasks appropriately. Depending on the size and structure of your business you may need to delegate certain tasks to stay on track for your deadlines and processes.
Let’s take a closer look at areas including:
Review your security strategy and requirements.
It’s getting closer to Christmas – do you have the right products available?
Have a backup plan in case certain products have become unavailable or there are problems with delivery. Do you have replacement products in mind that can carry you through the Christmas period?
Have you ordered plenty of stock of your Hero product? Is it currently in supply and ready to sell? (Yes, customers DO start buying Christmas-themed products in November!)
It’s also important for retailers to remain conservative – you don’t want to overbuy and end up with excess stock. Assess the situation and determine if you may need to cancel any purchase orders.
Christmas if the time for gifts – do you have enough gift carry bags and gift-wrapping paper for in-store sales?
Also do you have enough packaging materials for your online orders (including boxes, bubble wrap, and sticky tape)?
Top tips for what to check 60 days out from Christmas:
It’s important for physical stores and ecommerce websites to have a beautiful, welcoming Christmas feel – have the Christmas decorations been put up throughout the store? Encourage early shopping by decorating in November.
How’s your online store looking?
Does it look enticing to customers? Set up special categories that are dedicated to Christmas gift offerings and ideas.
Include enticing offers such as ‘free shipping’ and same day delivery (only if you can guarantee it).
Use the Marketing module in your cloud ERP to segment customers based on various criteria – such as ‘everyone who bought the Christmas ‘Hero’ product last year’. Once you have your segments, send targeted email campaigns through your retail ERP software.
Then, track essential criteria such as who has read the email, how many times they’ve read it, who has actually clicked on the website URL. You can then create new segments based on this information and send subsequent targeted emails as reminders.
Set up automated abandoned cart emails to remind customers who started ordering and didn’t complete. Review last year’s marketing calendar for opportunities. What worked well last year, and can it be refreshed for this year’s marketing?
It’s time to check if the Christmas-based promotions are all on track.
If you have made supplier agreements, confirm that promotional products and gift packs have arrived. Are they on display in the right section of your store and website? Do you have the stock volume to support the promotion? Run reports to get ‘live’ information on the stock position.
Liaise with suppliers to see if there are any last minute opportunities for extra promotional activities. The current volatility in the retail sector provides unseen opportunities – all you need to do is ask! Get creative and help each other to clear stock and increase sales.
For example, wine wholesalers with excess stock have negotiated deals with Dan Murphy’s, and Qantas has been selling promotional pyjama gift packs online to get rid of stock that is sitting dormant. Do you have something similarly creative that could make a great Christmas gift?
60 days out from Christmas is the time to start planning staff incentives that drive sales.
Use your reporting to understand the products you want to drive (high margin, exclusive products work best) and then create a staff incentive plan based on sales to help drive the team to sell more.
Don’t forget your staff Christmas celebrations. If you usually hold a staff Christmas party, what will this look like in a COVID-19 world?
This year it might be safer to do something different. Calculate what you normally spend on a staff Christmas party per head; let’s say it normally costs $85 per head to hold a drinks and tapas event. Consider giving each staff member a prepaid VISA gift card for the same value, instead of holding a party. They can use it to treat themselves or buy a gift for a loved one.
30 days out from Christmas: this is your last chance to make sure that everything is on track, as customers ramp up their Christmas shopping.
By now your preparations should be finalised and you are now ticking off the items to ensure you have completed all of the plan and executed correctly.
Your business should be starting to see incremental increases in sales and traffic to both your online store and physical stores.
Areas to focus on are:
Your inventory is the lifeline of your business, especially in the last few weeks before Christmas.
Look at the live stock figures in your cloud ERP and run ‘stock-in’ reports. Do you have enough stock to carry you through Christmas?
At this stage, if you do need to order additional stock, consider sourcing products locally, as delivery timeframes will be significantly reduced.Your hero products should be seeing an increase in sales. If not, evaluate your position, pricing and competition to understand what, if any, actions are necessary to increase sales.
Warehouses are going to be incredibly busy at this stage, with huge stock volumes arriving into warehouses on a regular basis – up to a few times a day.
It’s important that stock is received into the warehouse and put away as efficiently as possible, so you can keep up with increased ecommerce order volumes.
In the last weeks and days before Christmas, online marketing takes the stage. It’s time to whip customers into a festive frenzy (safely, of course).
Publish website content with Christmas gift guides, such as listing gift ideas by the child’s age or interests. With online research being key this year, expect more customers to find your store via web content.
Educate customers about delivery times:
Remind customers of order deadlines for delivery and be clear that you have no control over delivery after it’s collected by Australia Post.
It’s likely that Australia Post will be slammed with deliveries, so your marketing should encourage customers to shop online for click and collect. Early click and collect is the best option to guarantee customers receive their gifts on time.
Confirm that your December catalogues have been printed and delivered, and your advertising is booked with media outlets.
Focus on social media advertising and Google Ad targeting, to remind customers about products they’ve viewed but not yet bought.
Are there any last-minute adjustments that need to be actioned due to supply issues or unexpected sales growth? You could be selling out of some lines and will need to switch tactics and add in new lines to continue the sales growth.
It’s a great idea to set up Christmas gift displays in prominent areas such as the store entrance, to ‘remind’ shoppers that Christmas is approaching and entice shoppers into stores.
In a year that has been upsetting for many people, the joy of Christmas can give customers a positive end to an otherwise lousy year.
As a retailer, you can create a magical Christmas retail experience in your stores, or online if you can’t trade in person.
Some Christmas promotional ideas include:
Set up the promotional combos in your POS system well in advance and communicate the offers to retail staff.
You’ve done all the preparation, starting over 90 days out from the biggest retail event of the year. We wish you all the best for a wildly successful retail trade in 2020, and looking forward to 2021.
If there is anything we can do to help you make the most of your Qdos ERP software and reports in your Christmas planning, please call Qdos on 03 8644 4080.
Qdos’ integrated software solutions help you manage your inventory and sell stock efficiently across all your sales channels.