Do you know if you've got the right stock ready for peak season? Or could
you be missing out on sales or even sitting on piles of
unsold stock come January? Having
a clear plan for your stock is the absolute backbone of a
stress free quarter four. We are heading straight
towards quarter four. And yes, it's time to talk about Christmas,
it's time to talk about peak, and it's time to talk about getting your
stock planned out ready to go. What we're going to be going
through in this episode is a simple step by step
checklist of what you need to think about ready for your peak season
success. So this might be an episode where you want to grab a notebook because
by the end you will have a clear plan of action to make sure
that you are ready to go with your stock for the busiest sales
period. So why does stock planning matter?
I spent nearly two decades in big retailers, including some where
Christmas was absolutely the make or break point of the
year. And let me tell you, planning out our stock was half
of the job. It was all about getting ready, getting
prepared, making sure that we had the right stock at the right
place at the right time. And the reason for that is
because stock and sales are completely intertwined. So
if you are relying on Christmas to drive a big bulk of your sales this
year, you're going to want to make sure that your stock is going to support
that. So stock equals cash. It's as simple as that.
Anytime you're spending money on stock, then it is
effectively tying it up. So the right stock strategy can help you free
up cash and boost your profits. There are
dangers galore in the peak season as well. There's dangers of
over buying, so tying up money and space versus under buying
where you might be losing sales. And the peak season
amplifies both those risks. So it is well
worth your time spending a few minutes thinking
about what you want to do to drive your sales at Christmas and checking that
you've got the right stock to support you. So, for
example, I spoke to a client in January who
had had an amazing start to their Christmas season, but because they hadn't
really recognized just how much their sales have been ramping up,
they sold out well before the peak sales really kicked in and
left money on the table. And every year I speak to
people who have got themselves in a difficult situation on the other way
around, that they've overbought for Christmas or they've overbought in that
peak holiday period and therefore they're ending up sitting on
far more cash than they should in January. So what we're going
to do today is walk through some simple steps to
try and get, get ahead of the Christmas rush and
to give you that peace of mind that you are in a good position
going into peak. And one of my favorite stories, if you're thinking, well, I,
I should know this stuff by now, one of my favorite stories is I worked
with a client, they're a fashion brand, and they came to me because actually they'd
been to a Shopify event all about Black Friday
Cyber Monday. And specifically what they wanted support with
was how much stock they should have for this big event, which was a huge
piece of their yearly sales that they were planning.
And they talked all about getting ready for Cyber Monday, Black Friday,
Cyber Monday. And then afterwards, he went up to the person who
presented and said, well, how do I actually work out how much stock I need
to have? And the person said, oh, it's really about your gut feel. You need
to go with your gut. And for me, the reason that
I love this story is because it tells me that these kind of things, this
kind of information is really important, that there isn't enough out there about how you
actually work this stuff out. And secondly, it just goes to show that lots
of people who maybe are pretty high up in the e commerce world, in the
retail world, this is not an area that even they know about
necessarily. If you're ever thinking, how do I figure this out? How do I even
do it? Then we're going to unpack some of that today.
So the first thing you want to do, nice and simple is,
is you want to look at last year's sales data.
Now, it's possible that you're listening to this podcast and this is your first ever
Christmas, in which case you're going to have to skip this step. Although I would
say, arguably I would have a look at what you've been selling so far
because it's going to give you some clues as to what your bestsellers are going
to be at Christmas as well. But let's say that this is
not your first Christmas, which I'm sure for a lot of you it won't be.
And so we're going to start with a bit of a review. Now, my favorite
thing to do in January, I do it every year inside the membership group Resilient
Retail Club, is we have a lessons learned and strategy
session which is all about recapping Christmas.
And so we do it in January because we know
that people forget and years gets busy and
you think they'll never forget what happened last Christmas, but you can easily.
And so what we want to do here is, ideally you'd have done this in
January, but bearing in mind that there's the best time to plant a
tree was 50 years ago. The second best time to plant a tree is today.
So let's go for it. We're going to dive in and look at last year's
performance. And the beauty is most reporting systems will just let
you change the dates and look back and it should be pretty easy for you
to get this information. So what we're looking for here is
what your best sellers were. We want to know what your best
selling products were during the Christmas time period. And it's up to you
what you consider the Christmas time period. You might want to consider the months of
November and December together. You might want to look at the whole fourth quarter
October through to Christmas, it's up to you. But during that Christmas selling
period, however you define it, what sold best, Have a look at
your best sellers and more importantly, how many of those did you sell?
You're looking for the 80% of sales products.
So 20% of your products most likely are going to be generating
80% of your sales. These are the ones you want to get right. So if
you've got hundreds of products, don't worry, just focus on your top
sellers because that is going to be what makes or breaks it.
So you're going to want to know what, what your bestsellers were and how many
you sold of them and then also have a look. What products did
maybe don't pop up on the bestseller list, but you know that as you scroll
down the list and you look through, you think, oh, do you know what we
sold out to that really early? Ironically, one of the things that happens,
especially in independent retailers in bricks and mortar, is when you
sell out of something, you no longer see it. So it can almost drop out
of your mind. But just take a time to think through. Were there things that
you bought and just went really quickly that you could have sold more of? And
were there products that even if they sold quite well, had they declined year on
year? Are you beginning to get the sense from your customer that they're moving away?
And most importantly, you want to take the lessons from this data. You don't just
want to look at this data just so that you know how that you sold
400 of the Star ornament in the month of November and December.
You want to really go through it and look and say what worked well, that
I need to do more of. Okay, those, those ornaments were great.
Can I bring more in? Okay. I equally had
another type of decoration that usually was my bestseller but had dropped
down. Okay, do I retire it? Do I replace slow movers? And
where did I miss out? Where did I have products that I definitely could have
sold more of? So once you've completed all of that
analysis, then what I'd encourage you to do is
identify your hero products. So your hero
product does not have to be Christmassy. It doesn't mean that you
can't make it a little bit more festive with some festive packaging or
something like that, just for the Christmas time period. But when I talk
about Christmas hero products because it has the word Christmas in
or peak, then people tend to think, oh, does it have to be themed?
The answer is absolutely not. The most important thing is that
it's giftable. So what is your best selling giftable item
year round and is that applicable for Christmas? Chances are probably yes.
Chances are that's probably going to be your hero product.
Now you may want to have different hero products.
You may have one which fits into the five to ten pound price point
that's great for stocking fillers. There's the 20 to 30
pound gifting sweet spot, which is also really important at
Christmas time. And then there's also that 50 pound plus for special
gifts. Now if you sell jewelry, for example, you
may not have all of those different price points mapped out. That's absolutely
fine. You still want to map out your hero product, the one that people are
most likely to want to buy as a gift at Christmas. But
equally so, if you are somebody who has lots of different products, you're selling
lots of different ranges from different brands, then you
definitely want to pull out your hero products, not just one hero
product, but across the price points. So why are hero
products so important? Well, it just helps you keep organized, it helps
you keep focused. You can make sure that you have at least some kind
of photography that will help you sell it as a Christmasy item.
You can focus. If you're going to be doing PR outreach, for example, or
trying to get into gift guides, then that's what you focus on with your hero
product. You want it on your homepage, you want it as part of your email
campaigns, you want it in your social media, for example. And picking
those products now means that you become really focused and really clear
as you're going through the season rather than each week thinking, right, well, what
do I talk about? What do I talk about now? So make sure you've got
those HERO products mapped out. And the other
thing that is useful about mapping out your product, your HERO products.
So if we come on to step three is it also allows you to review
your range and fill your gaps. So for example,
you might be doing this exercise thinking, what do I really want to focus on?
And then you suddenly realize, well, I really don't think I've got any strong
contenders for stocking fillers this year. Or
actually everything that I've got is either under 10 pounds or over
50. I really don't have anything in that 20 to 30 pound
gifting sweet spot. So it can be a really useful exercise to
help you think about what you might need to tweak. Are there any
gaps that you need to bring in? Now, depending on how you source
your product, this ship may have sailed. You may not be able to get any
new products in for the Christmas season, in which case you're just going to have
to think about how you can work your messaging to support the products you do
have. But for lots of you, where maybe you're designing your own products or,
or perhaps you're buying products in from other people, you are going to be able
to make those last minute tweaks, have a look through, have
a look at everything that you've got, pull out what you think your heroes
are going to be. It's also good, you don't necessarily want to just
talk about your heroes all the way through the long Christmas promotional
period. So you may want to pick up, pick out some alternates as well in
each category. But then just have a look and think, am I missing anything?
Again, if you're somebody who is a lifestyle store, for example, a gifting
store, have you covered off almost, think about what marketing messages
you might want to send out during that time period and if you've got the
product for it. So you might want to do gifts for her, you might want
to do gifts by interest. So for gardeners or for
bikers or wild swimmers, you might want to think
about hostess gifts and Christmas
party earrings and Christmas Day jewelry and think about
all the different messages and then just think, do I have the product to support
that. It's much easier to do this now before you get into the busy
time period than to arrive in November and December and think,
oh, I wish I could do a gift guide for under 10 pound gifts, but
I've really just got this one item. So really look strategically at
your range at this point and if you are able to make changes,
then have A look and think about where you can fill in the gaps because
it will make life so much easier for you as you move through throughout the
season. So step four is
set your launch dates. So this
is something that comes up a lot. When
do you launch Christmas? And it
depends. It's what you're used to in your business, what's worked for you in the
past. But I would say very broadly speaking, you can have a
soft launch. In other words, put it out in store without making a fanfare about
it, or put it up on your website, maybe even in September or
October. But then generally speaking, the point in which we can
all agree that it all becomes Christmas, all consuming, all
Christmas, or as one of my clients once called it, screaming Christmas,
is post Bonfire Night. So we get through
Halloween, we get through Bonfire Night, and then pretty much it
switches over and we're talking about Christmas. So most people will do their
full Christmas launch that will be coming up at the
beginning of November. So have a think about
when you want to talk about it. Have a think about things like
when your emails will go out to talk about it, when do you need to
have photo shoots done ready for those emails,
when do you want to pitch to pr, if that's something that you're going to
be doing. And then you can work backwards from your chosen launch
date to make sure that you map out your content and you
map out your promotions. Once you set your dates, then
that helps you work backwards from that, making sure that you've done everything you
need ready to go for your launch. So you can even
map out when you're going to create your content. You could do it ahead of
time. Why not do it in September? It's a much better month to try
and prep all of your Christmas marketing, for example, than trying to do it
all in the peak time period. So pick your dates and then
also pick, like when do you think are going to be the peak selling periods
for these products? Because that brings us on to step five, which is all about
forecasting your sales. So you've looked
at last year, what you sold, you've looked at this year, what you're building, all
of your ranges around, you've identified. If there's any
gaps, you filled those in. Now it's time for you to
think about what you believe that you are actually going to
sell. So how do you do that? Well, again, if
this is your first Christmas, it may be a little bit tricky, but I would
just say, say have a think about what kind of an uplift you might Expect.
Do you think that if you sell 10 of something in an average week,
maybe assume that you will sell double that in November and December.
As long as you have logical assumptions, you're going to be able to tweak
and refine it so that in future years you will have better information.
But for this year, you are just going to have to go with an educated
guess, something that seems logical, that you've
worked through. But ultimately, until you get into a Christmas season and
see how it reacts for you, you won't necessarily know. So for
everybody else you can use historical sales data. So if you
believe that your number one item is going to be the lavender candle
this year, last year you sold a hundred lavender candles, but this
year so far your sales are pretty much double what they've been to this
point last year, then you could say, right, well I think I'm going to sell
about 200 lavender candles. Then you
could say, well, I think I'm going to sell about 200 lavender candles this year.
So for example, you're just taking a combination of your
current sales performance and your last year's sales performance,
putting them together and coming up with an estimate. So that is what you
call your run rate. So your run rate is how you're currently performing against
last year. So if your sales are double what they were last year to
this point, then you can, you could assume, you could take an
educated guess that your Christmas sales are going to be double. For example,
you can also go through and if you think actually that feels
really punchy. I don't like the idea of planning my Christmas sales at double,
then sure, by all means, be really conservative. I'm quite often
conservative when I'm planning out one to one clients and looking
at their Christmas sales. I tend to slightly under plan just
because sometimes you
just can't physically process twice as many products
as last year. So you need to be a little mindful of what's actually going
to be going on in the business. Do you think that you're going to hit
those numbers? And if it feels too scary and too
like you could have to over commit to stock in order to hit those numbers,
maybe pull it back slightly on the basis that it's better to under promise and
over deliver than to set yourself really crazy big targets and then be
disappointed if you don't hit them. So
if it's a new product again, you could have a look at and say my
best selling item usually sells about 50 a week during the
Christmas period and we've got eight weeks of promotion. So I think
that's going to be about 400 units because I think this new product is
going to be one of my best sellers. That's why I've chosen it as my
hero product. So for each one you want to go through and logically look
at, for your, each one of your hero products you want to logically go
through, look at what did I sell last year? Either this product or an
equivalent product. What's my uplift? I think for this year, therefore,
what do I think I'm going to be generating?
And again, it is an estimate, right? So
you're, you don't know for sure the all sorts of different things that can
happen. It can also actually help you to work out when you
do this exercise to kind of go through and go, well, hang on a minute,
if I was selling 200 of those a day, can I even physically
dispatch that? Again, any work that you can do to check through those
assumptions now, as opposed to waking up in November and realizing that
you've got a capacity issue, anything that you can do now is super, super
helpful. So do think through what this actually means. If you're planning
double the sales of last year, just think to yourself, now, can I physically
do that? Who do I need to bring in? Do I need more space? Do
I need more resources? That's, that's a whole other piece of work. But
then when you're looking at the individual product
lines, then always ask yourself this very, very important
question when it comes to your Christmas purchasing. Which is
worse, having too much or not enough?
And ask yourself that for every single product that you're ordering ready
for Christmas. And there's two different ways of looking at this.
Some products are Christmas specific. They are
what I like to call brown bananas, which means that on the 26th of
December, nobody's going to want to touch them. So that's anything that says Merry
Christmas, that's an Advent calendar after we've got past about
3rd December. It's anything that's got a really clear
cutoff. Those products, generally speaking, if you ask
yourself that question, which is worth having too much or not having enough, the answer
is going to be having too much. Because if you're left with it,
you can't do anything with it for a whole year. You're just going to have
to sit on that stock, which is basically cash tied up in your business for
an entire year. So those are the products that you, generally
speaking, want to under buy. You want to be out of stock of those
really before Christmas so that you're not left either having to mark
them down significantly in a clearance sale to get rid of them or sit
on them for a whole year, store them somewhere and bring them back out for
Christmas. So those types of products, generally speaking, the question
which is worse, having too much or not enough? The answer is going to be
it's going to be worse for me to have too much. So therefore when you're
planning out your quantities, you're going to bring those quantities down, you're going to be
a bit more conservative. Now, your year round
bestsellers going back to this lavender candle, the question
which is worse, having too much or not enough? Well, actually if I've got too
much, I'm just gonna have more in January. I won't have to place an order
in January, that's actually absolutely fine. But if I run
out of my key bestseller halfway through the season, that's gonna be a
real pain for me. That's gonna mean that all of the effort that I'm putting
into these ads, into these campaigns, everything that I've got lined up, that's
all going to be for nothing. So therefore, that is an
item where when you do your analysis, maybe you add a buffer on you do
right. I think I'm probably going to sell 200, but you know what, I'm going
to buy 250 because it's worse for me if I have not
enough. So for every single product you go through, ask yourself that
question which is worse, having too much or not enough?
And then using that, adjust your forecasts
accordingly. So either bump it up a little bit to make sure that you don't
run out or pull it back so that you're not going to be left
sitting on extra stock. So
once you have done all of those things, then
final step, step six is to double check all of your orders and your
supplier lead times now. So if you are somebody who hand
makes your product, then you want to prep all of your components early.
Lots of people I know actually work throughout the summer to get their Christmas stock
ready. So obviously that's a little late now, but do
have a look and see what you can do to make sure that you've done
your work ahead of time. If you're
like most retailers, this will be a tricky time to be bringing an
intake. I know for a fact that there's a real cash flow pinch point at
this time of year in September, October if you are a
retailer. Lots of people I know get around it by using things like FAIR and
their payment terms. To help push the payment back further.
So I do appreciate that it's a tricky time of year, but if at all
possible you, if you've got products that you know are going to be a really
important time, really important part of your Christmas marketing
and now is the time to bring them in. So
this is your little checklist for you to go through. So number one,
review last year's performance. Number two, identify your hero products.
Number three, fill in any price point gaps or any gaps in the range that
you feel might need to be attended to. Number four, plan out your launch dates
for Christmas. Number five, forecast your sales by line and ask yourself
that all important question, which is more important, which is worse, having
too much or not having enough? And then make sure that you put in a
plan and you secure and prepare your stocks that you are going to
have the stock in time for Christmas. And if you're listening to this
thinking this sounds great but I just don't have time for any of this, then
I would love for you to check out the stock doctor service. It's at resilient
retail club.com stockdoctor and we have a done for
you service where trained retail professionals will come in and help you get ready
for your best Christmas yet. Thank you so much for listening and
I'll see you next week.