Just like everything else in 2020, the holiday shopping season is sure to look different this year.
Experts are predicting increased e-commerce through the end of the year as Americans spend less on dining out and travel. Deloitte anticipates a small 1% to 1.5% climb in overall holiday spending this year despite the current economic uncertainty.
Glenn Sedam, business banking segment leader with BOK Financial, offered six tips for small business owners as they prepare for a bustling—but unconventional—holiday season.
1. Plan for this year to be different.
“American consumers will always embrace the holiday season, but that means some additional work on the part of retailers this year,” Sedam said. “Prioritizing safety and cleanliness must be top of the list for merchants as they prepare for the holidays.
“If you haven’t done it already, consider how to alter your floor plans to accommodate traffic flows to allow for distancing and potentially limit the number of shoppers in your business at one time.”
“Black Friday lines won’t disappear,” Stephen Baker, vice president and industry advisor for the NPD Group told risnews.com. But the lines of consumers waiting for stores to open will give way to long queues of cars waiting at the curbside to pick up the purchases they made online, he said.
2. Be sure shoppers know you’re open.
According to the Visa Small Business Outlook, 83% of small businesses reported being impacted in some way by the COVID-19 pandemic, with nearly half (45%) saying they were at risk of closing as a result.
After a period of quarantine and people avoiding social interactions, you may need to work hard to let consumers know you want their business.
“Let your clients know that you are open and excited about the holiday season,” Sedam said. “You’ll want to start early, be creative and consider partnerships to get the most bang for your buck and draw those customers to your door—or website!”
Much of that traffic may come after the holiday, Sedam said. “Customers may be inclined to shop online and buy several items in advance to avoid interacting with sales consultants and changing rooms, but that likely means more returns coming back your way.
“The weaker economy could also contribute to more returns as people decide to save the money they had allotted to gift-giving after all.”
3. Market your online presence.
If you haven’t made the transition to e-commerce, this may be the year to do so—and soon. Deloitte forecasts holiday season e-commerce to be 25 to 35% higher than last year.
“E-commerce is likely to be a big winner because consumers have shown a clear movement towards buying online rather than at brick and mortar stores,” said Daniel Bachman, Deloitte’s U.S. economic forecaster.
As you consider what your online offering will be, think about how you will support that potential new revenue source, Sedam said. “Be sure to assess your credit card payment functionality to make sure it won’t let you down during the most critical time of year. The key is to plan now to avoid disruption when demand peaks in November and December.”
4. Test your systems.
Not everyone will shop online. Holiday shopping is a firm tradition for many, and they will insist on coming through your doors. In addition to considering traffic flows, sanitation and distancing, you’ll need to ensure your technical and sales systems are working.
“To prepare for a potential influx of business, make sure everything you need to complete sales and generate revenue is properly scaled for the higher volume that comes with a busy holiday season,” Sedam suggested. “Test your point-of-sale terminals, registers and web-based platforms early to make sure they can handle higher transaction volume than you may have seen throughout the summer months.”
5. Prepare for increased expenses.
Most businesses need to meet holiday demand by maintaining higher levels of inventory and materials. Be sure to plan ahead since the pandemic has upended many supply chains in 2020 and disrupted suppliers of all types.
“Likewise, this busy time of year often requires seasonal staffing increases,” Sedam said. “These additional seasonal expenses can create cash flow difficulties for many small businesses.”
Talk to your banker for tips on being prepared, he said. Tools like business credit cards or lines of credit can help you manage seasonal expenses. “Your business banker should be your partner in tackling these types of seasonal challenges,” he added.
6. Know who you can depend on.
Be in touch with your most important business partners in advance of the season; let them know what you’ll need from them during this critical time of year. Those partners might include:
- Priority suppliers
- Credit card payment provider
- IT support or equipment maintenance teams
- Website vendor
- Point-of-sale terminal support
“Connecting all of these dots in advance of your anticipated seasonal rush will lessen the chance of headaches during your busiest time,” Sedam advised.