By Stuart Blake, BlueVine
The holiday season is the most wonderful time of the year. But if
you’re a retailer, it can also be the most hectic.
Despite the fact that most retailers begin preparing for the
holiday shopping season the minute the previous season ends, the holiday rush
always has its fair share of unpredictable moments. For business owners, that
unpredictability can lead to costly expenses that may mean the difference
between beating sales records and losing out to the competition.
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To ensure a successful holiday shopping season, it’s critical that
retailers take time to consider the unexpected scenarios they may face as their
web site traffic grows and checkout lines get longer — and what those costs
could look like.
Having spent many holiday shopping seasons working directly with
hundreds of business owners, I’ve noticed several recurring situations that
always seem to take them by surprise. Let’s explore the top four, and how
retailers can avoid potentially costly consequential setbacks.
Your Inventory Goes Viral
Having an item fly off the shelves is every retailer’s dream; but
that dream can quickly turn into a nightmare if you’re unable to quickly
restock your supply and keep up with demand. No business wants to be the only
one in town out of this season’s biggest seller, while their competitors are
still selling off inventory.
There are two critical steps you should take to make sure you can
capitalize — and not crash and burn — on hot items. First, you should ensure
you’re leveraging web site and sales data to help predict what those best
sellers will be. Which items generated the most sales last holiday season? Is
your web traffic data showing a steady increase in visits to certain product
pages? These and other data-driven insights can help you project sales and
prioritize the right inventory to stock up on.
Second, you have to be able to afford to bulk up
on inventory. Retailers should consider securing flexible working capital that
allows them to stock shelves without having to repeatedly dip into revenue.
You Get Snowed In (or Out)
Whether you’re a brick-and-mortar in the northern half of the
country or an online business that ships to that region, it’s more than likely
that your business will be impacted by harsh weather conditions this holiday
season.
Business owners should examine what they spent on materials and
services to help clear their walkways and parking lots in the year previous,
and then pad it with a bit extra in case of an emergency.
Harsh weather conditions could also mean blizzards, flooding or
extreme temperatures, so owners need to be mindful of shipping inventory to
these regions and how weather may impact deliveries. The last thing you want is
to prevent your customers from getting their gifts on time. So be prepared with
some extra capital to offer rush delivery services for customers in a crunch.
You Need More Help (And Workers Need Time Off)
It’s no secret that retailers make temporary hires during the
holidays in anticipation of increased traffic. But there are a variety of other
staffing-related reasons to have easy access to capital that aren’t as
traditional.
For instance, brick-and-mortars still experience severe losses due
to theft that online stores don’t have to worry about. According to a recent
survey from the National Retail Federation, shoplifting and employee theft
costs the U.S. retail industry about $50 billion annually, and increased traffic during the holidays only leaves more room
for theft. To combat this, you may consider third-party security guards to
shore up your store security, but this may impact your bottom line.
Retailers also will want to consider the time off requested by
existing staff during the holiday season, and what it will cost them to hire
enough people to cover extended hours and religious holidays if they choose to
stay open.
You’re Getting In The Spirit
It may be the busiest time of the year for retailers, but it is
also the season of giving. One
in four Americans expect
to see their employer show their appreciation for employees around the
holidays, whether it be in the form of a monetary gift or otherwise. Business
owners who plan to give gifts to their employees should also plan for that
added expense and may want to consider financing to cover it in case the
holiday revenue hasn’t quite settled.
If you’re not in the position to make a gift to employees this
year, you should at least be prepared to pay staff on time during the holidays.
One of the most common reasons retailers seek quick financing is to pay an
immediate expense (e.g. delivery truck repairs) that leaves them with
insufficient working capital to make payroll.
During the holidays, retailers need to expect the unexpected.
Being prepared is the key to success during these critical months. Business
owners know all too well that incidentals can be costly, and there is no better
way to conquer those challenges than to have the working capital they need now
before the unforeseen occurs.
Stuart Blake grew up in a family of small businesses owners in New
Jersey. As vice president of sales and customer success at BlueVine, a leading provider of working capital
financing to small and medium sized businesses, he is driven to help small
businesses grow and flourish.
