At the end of the holiday season, a lot of people get the blues. For many, the holidays are busy times filled with celebrations, visiting family and friends, gift giving, and cherishing memories.
Many business owners get down after Christmas, too. Depending on your industry and offerings, you might see a slow in customer traffic, spike in returns, and dip in sales. So, how can you handle those post-Christmas sales blues?
Handling Those Pesky Sales Blues
The holiday season is a great time to ramp up your small business’s sales. For some businesses, holiday sales make up 30% of their annual sales.
But when the season starts wrapping up, you may see fewer customers frequenting your business. Instead of getting distressed, use these five tips to help you handle the post-holiday blues.
1. Remember That It’s Normal
Many businesses see a pickup in sales around Thanksgiving and a drop off after Christmas. And, that’s completely normal.
The holiday season is full of designated shopping days. What other season in the year can say the same?
Between Thanksgiving and Christmas, consumers are launched into full-fledged shopping days through Black Friday, Small Business Saturday, and Cyber Monday. And, there are other days that drive sales to businesses during the holiday season, such as Free Shipping Day and Super Saturday, the last Saturday before Christmas.
In 2018, consumers spent approximately $60 billion on Black Friday weekend, $17.8 billion on Small Business Saturday, and $7.9 billion on Cyber Monday.
Black Friday, Small Business Saturday, and Cyber Monday alone accounted for about $85.7 billion in consumer spending. Keep in mind that this $85.7 billion does not take any other spending between Thanksgiving and Christmas into consideration.
For reference, total Valentine’s Day spending was approximately $19.6 billion in 2018.
Naturally, consumers may be more inclined to shop when there are designated, nationwide events promoting shopping. And, these days only take place during the holiday season. So if your small business isn’t getting as much traction after the holidays, remember that you’re not alone.
2. Keep A Cash Reserve
Having a cash reserve is never a bad idea. Your small business will likely experience highs and lows when it comes to cash flow. Having a cash reserve can help you cover expenses when revenue is a little low.
A cash reserve is an emergency fund you can access if your business is short on cash. Think of your cash reserve like a savings account that you should only access in case of emergency.
Instead of using the extra holiday sales dollars to cut yourself a bigger paycheck, consider setting some funds aside to get you through seasonal lows. Having a cash cushion can alleviate some stress if sales begin slowing down after the holidays.
3. Offer Discounts
Another way that you can deal with the post-Christmas sales blues is by enticing customers to come back to your small business. You can offer discounts after the holiday season to attract consumers and get rid of some seasonal inventory.
Offer discounts—such as a BOGO deal, a percentage off a customer’s purchase, or a free gift—that are only valid after Christmas. Consider passing out discount information at the point of sale. For example, you could give a customer a coupon during the holiday season, but they can’t use it until after the season ends.
By putting on promotional events, you may see an uptick in post-holiday sales and sell some outdated inventory.
4. Prepare For Returns
After the holidays, you may see an increase in returns. Consumers return goods valued at approximately $65 billion after Christmas, according to one report.
According to another report, holiday returns account for 8% of all holiday sales. Instead of dreading the season of returns, use it as an opportunity to boost revenue and gain new customers.
Returns are a great way to grow your customer list. Oftentimes, people returning goods after the holidays are gift recipients who have never heard of your small business. Your brand has the potential to stick with the customer and convert them into a lifelong customer, even if you initially take a hit from the return.
You can also look at returns as an opportunity to upsell to customers. Or, you can promote discounts and encourage further shopping. Try to encourage exchanges rather than returns to keep your business bottom line from sinking.
So, how can you prepare for return season?
Be sure to polish your small business return policy so returns aren’t a hassle for your employees or the customers returning the items.
Ask customers why they want to return the products—their responses can be enlightening. You might be able to better market to the customer in the future, make tweaks to your offerings, or recommend other products to them.
Returned products have the potential to throw off your small business accounting books. Make sure you record a purchase return journal entry so your books are updated and accurate.
5. Start Thinking About Next Year
I know, I know—the next holiday season is almost one year away, why would you want to start planning for it already?
Business owners can benefit a great deal by planning for and optimizing their busiest sales season.
Analyze the information you gained from the current year, such as what marketing tactics drew the most customers, when’s the best time to start advertising for the holidays, and what deals produced the greatest return on investment. If you came across issues, determine a solution. For example, if you ran out of top-selling goods, plan to better manage your inventory.
The more prepared your business is for heavy customer traffic, the more you can optimize your holiday season. And the more optimized your business is for the holiday rush, the more cash cushion your company will have to propel you through the post-Christmas sales slump.
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