Five ways to get the most out of the Christmas spending rush
It’s October and already retailers are adorning their shop fronts with Christmas paraphernalia. In fact, David Jones has been selling Christmas trees and decorations since mid-August.
Businesses, it seems, will have to work extra hard to lure cash from Australia’s reticent consumers during the festive season.
Figures released this week by Dun & Bradstreet highlight the challenges: one in three households are more focused on saving than they were 12 months ago, while 56% are worried about their financial position.
Consumers are reluctant to obtain new credit to go on spending sprees and it’s likely that many will wait for last-minute deals and discounts before making their Christmas purchases.
But there are still several things businesses can do to improve their chances of getting a Christmas lift.
StartupSmart spoke to the experts to find out what they are:
1. Make sure your inventory stocking is stuffed
“I think there’s a number of things retailers already should have done or are in the process of doing,” says Russell Zimmerman, executive director of the Australian Retailers Association.
“Understanding their stock requirements is number one.”
“If you bought 500 T-shirts last year and they sold out, you might need to be ordering 550 or whatever it might be [this year]. Also, look at your slow sales.”
“And if there’s a new version of something, ask yourself if you really need to buy it.”
Zimmerman says retailers need to ensure their suppliers are on board ahead of the Christmas period.
“You will be receiving products from now until Christmas. But suppliers can cancel a product, so you need to be checking all your suppliers will be able to deliver,” he says.
“If they aren’t, you need to determine how you will supplement that product.”
2. Getting enough elves (staff) on the shop floor
Zimmerman says retailers obviously need to look at their staffing levels in the lead-up to Christmas.
“You know you’re going to need an increase in staff. Quite often, retailers use young casuals. Don’t bring them on a week before – get them involved in your business now,” he says.
“You need to make sure you get them in place now so they receive training on customer service, cash registers, etc. That’s vital – ensuring you’ve got the right staff there.”
“If you’ve got a warehouse at the back of your shop and you’re employing casual staff who are accessing those areas, you’ve got to show them where everything is.”
“It’s also vital for those staff to understand who they’ve got to report to – you need to give clear directions to those casual staff.”
According to Brian Walker, managing director of the Retail Doctor Group, it’s equally important for retailers to think about their existing staff.
“They want to make sure people are starting to get a break before the Christmas rush, and ensuring they’ve got their recruitment and rostering models worked out,” he says.
“They want to be starting to think about internal Christmas promotions [for staff], so there’s an incentive, because they’ll be working a lot longer.”
3. Don’t let the reindeer bolt too early
“Christmas is really mid-December through to mid-January or even late January. That’s a trading period of about five weeks,” Walker says.
“It’s all about databases, loyalty programs, VIP nights, and encouraging people to buy their Christmas gifts earlier than the traditional period. Think in a slightly different cyclical way.”
“Also, use the pre-Christmas period to give people incentives to come back in January. For example, 15% off any product purchase between this date and this date.”
Zimmerman says retailers also need to think about their timing with regard to Christmas decorations and music.
“Talk to the shopping centre you operate in and find out when they’re intending to put their Christmas decorations up. Look at the details of your marketing plan and see if it fits in with theirs,” he says.
“If you start heading into shopping centres in September and you hear Christmas carols, you’re going to turn around and say, ‘This is a turnoff’.”
“If you’re going to play some Christmas music, disperse it with some other music. As Christmas gets closer, maybe add another Christmas carol [to the playlist].”
4. Make sure you tell a Christmas tale
According to Walker, it’s not enough for retailers to put up a few decorations and hope for the best.
“They need to make sure they’ve got a story for Christmas – a unique and imaginative story,” he says.
Similarly, Zimmerman says retailers need to tailor their Christmas campaigns to suit their business, insisting “you’ve got to find a balance”.
“For every business, that balance will be different. Let’s for instance take a Christmas shop. You would probably want to start putting things out earlier than if you were in a retail shop selling sandals,” he says.
“Consumers won’t think about Christmas attire until Christmas parties. [Fashion and shoe retailers] might want to be looking at that.”
“Towards the middle of November, you could probably put some signage around asking, ‘Have you got your sandals or dress for your Christmas party?’ It’s about putting that teaser out there.”
5. Stake your claim to the Christmas pudding
“With Christmas spending, consumers are starting later and later… but online influences will change that,” Walker says.
“Orders from offshore websites will take two or three weeks to get here, so domestic online retailers have to think about who their competition is. See what their weaknesses are and then go hard at it.”
“With quicker turnaround times and immediate delivery, that’s a clear point of difference.”
According to Walker, there will be some serious cross-channel marketing this year, so retailers need to revisit all of their customer touch points, whether they’re online or in-store.
“They need a good in-store environment and good online procurement, including a mobile-optimised site for consumers to purchase products via their smartphone,” he says.