Most brands view the New Year as the starting point of planning for the following season. Gathering information in the weeks following the holiday period such as sell-through percentage, average sales per store per week and total sales dollars (among many others) is imperative to build the foundation for next year’s holiday plan.
To determine how well they fared, a forward-thinking retail brand will list out each key day of the holiday season, namely Black Friday, Cyber Monday, Super Saturday, Free Shipping Day and Christmas Eve. Brands will look at last year’s performance on each of these key selling days to see how they performed versus the previous year, leveraging data to analyze their relative success or failure. The growth of innovative software-as-a-service (SaaS) has streamlined and democratized this task significantly, giving brands small and large the opportunity to access information once only available to the big players.
To supplement this granular level of analysis now available, brands will also look at the holiday season as a whole and assess whether or not they hit their annual plan. With some brands going into the last 61 days of the year with as much as a 30% gap in their retail sales plan, the holiday season is the equivalent of going all-in on a hand in poker. Couple this with the reality that retailers often return unsold seasonal inventory, the holidays can really be all or nothing for brands banking on the busiest shopping season of the year.
As companies move away from looking back on holiday performance to looking forward to holiday planning, they group their products into studs and duds. Using a model similar to the Boston Consulting Group Matrix, brands will typically set up to place their products in four categories: cash cows, dogs, question marks and stars. It is then up to the brand to refer to their POS metrics and analyze the relative success and failure of their product assortment under this framework. Utilizing software designed to explore POS metrics in vivid detail, vendors can draw educated and intelligent insights that drive suggestions to their retailers on the products that work, and make suggestions for those that didn’t quite deliver.
Based on feedback from the retailer’s buying team, orders will begin as soon as Chinese New Year concludes in February, and final orders will be placed in mid-to-late April. Early preparation allows manufacturers enough time to produce products overseas, leaving months of lead time between getting the products on the water before they finally land in the retailer’s distribution centers ahead of the holiday season.
As the days begin to heat up again in the early summer, marketing departments begin working feverishly, placing the finishing touches on their marketing briefs. Design and advertising firms require up to 14 weeks of lead time to prepare key assets such as digital banner ads, print advertisements, radio scripts and commercial spots. As a result, a brand’s marketing efforts begin early in the summer, long before consumers start getting starry-eyed over the holiday season.
It’s That Time of Year Again
As the holiday season nears, the culmination of months of planning and preparation begins to take life. Warehoused products arrive from overseas manufacturers and fill the retailer’s aisles, adorned with seasonal decorations and nostalgic customers ready to get a head start on yet another holiday season. Retail brands that have planned ahead for the busy holiday season watch the results roll in as the season kicks off Thanksgiving weekend, right through until the final days of the year where the season draws to a close and planning begins again.
The Work Has Only Just Begun
Brands have become far more responsive in dealing with and approaching the holiday season today. In fact, according to our recent survey, 74% of brands believe that demand planning and forecasting are very important to their business, with an additional 83% indicating that sales planning by each individual retailer is a vital process for their success.
Unfortunately, this buy-in only goes so far. Retail brands know what they have to do in order to win during the holidays, but more often than not they lack the internal capabilities to take on the daunting task of effectively planning for the busiest season of the year. Innovative technologies, designed to help retail brands effectively plan for and measure holiday performance, ensure organizations are better equipped to gain insight from their holiday point of sale data — an imperative cog in the holiday planning and execution machine. Armed with this insight, retail brands are empowered to make more strategic decisions for the next holiday season.
Whether as a consumer buying gifts or as a brand stocking the shelves, it’s safe to say that the holiday season is one of the most chaotic and exciting times of the year. But for smart brands that have planned ahead, the holidays represent a tremendous opportunity to boost the bottom line and hit aggressive sales plans as the year draws to a close — all before the planning begins again for yet another busy holiday season.
Eric Green is CEO of Askuity, an analytics software platform that helps brands turn complex retail data into actionable insights and better business results.