Peak trading: how to prepare your retail business and maximise profits

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The Christmas period is fast-approaching. Also known as ‘the Golden Quarter’, this peak time is marked out in every retailer’s calendar, resulting in considerable trading activity spikes throughout the final months of the year.

In 2017, UK retailers dispatched 25% of the entire year’s orders in November and December alone1. From Halloween to Black Friday, Christmas celebrations to New Year’s Eve parties, the sales opportunities within the last three months of the year are huge. While preparations for these events is key, in light of shifting sales trends, retailers are having to take a more integrated approach when it comes to maximising returns while minimising disruption to customer service.

Peak trading – extended sales, less impact 01

In 2017, Christmas spending in the UK hit a record £50 billion starting from Black Friday.

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In 2017, Black Friday and Cyber Monday both prompted a spike in UK retail sales. Total spend over the four-day shopping event saw a 12% increase2; individual household spending rose over peak, with electronic, toys and apparel leading the way as the biggest selling categories.

That said, in terms of engagement, Black Friday and Cyber Monday show signs of slowing down - matching the drop in Black Friday sales over the last four years. In 2016 20% of shoppers treated themselves to an online purchase, while 19% bought something as a gift. In 2017 these numbers fell to 18% and 17%, respectively3.

Extended peak trading times This dip in sales can partly be attributed to the changing range of some of the peak times. Black Friday and Cyber Monday have now morphed from one day each into almost two weeks’ worth of sales; with Black Friday 2016

being Christened “Black Five Day” as it ran for an entire week. Other more traditional shopping days in the UK retail calendar are also extending. In 2017, Selfridges on Oxford Street was the first to start preparing its windows for Christmas, at the start of August - 147 days before Christmas day itself.

And what once was a 6am start on Boxing Day to get the best from the post-Christmas sales now begins on Christmas Eve in many cases; with last year seeing a 4.5% decrease4 in Boxing Day shop visits thanks to the lure of Black Friday discounts.

Such changes may be resulting in a loss of impact on consumers; the small number of big one-day events that would cause much anticipation and excitement are now a series of extended peak times throughout the year.

Shoppers can take their time, spend longer comparing prices, and perhaps most challenging of all for retailers – be picky when it comes to where they spend their money.

Once October hits, 53% of people have started their Christmas shopping.2

With such shifting trends in mind amidst a highly competitive marketplace, what can retailers do to prepare for peak trading, engage customers, and convert into sales?

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To keep shoppers interested during peak periods, retailers must consider these changing consumer shopping patterns and plan carefully and strategically. Campaigns need to target consumers during all high sales conversion periods; not just around the Christmas season, but taking into account all other critical time periods.

In 2017 for example, people in the UK were predicted to spend almost £50 on their loved ones for Valentine’s Day, totalling an estimated £1 billion on gifts and cards5.

Total retail spend on Mother’s Day was valued at almost £1.4 billion6, while the year before, British consumers spent around £775 million on Easter-related products7. Although perhaps not as lucrative as Christmas in terms of total sales, these occasions are still opportunities to boost revenue both online and in-store.

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Team preparation02

For both bricks and mortar and online retailers, ensuring your business is set up to handle peak trading throughout the year is essential. This applies to companies of all sizes, not just the smaller businesses who may feel the strain with limited resources.

In 2016 John Lewis recruited an extra 3,500 staff to help it through the festive season8, while Tesco hired an additonal 15,000 floor staff over the Christmas period to help with high in-store demand9.

Not only does this help guarantee you have the capacity to manage the increase in workload, it enables you to deliver a more consistent customer service when demand is at its highest.

Should you decide temporary staff is required, considering this well in advance will allow you to plan better and manage the increase in sales volume - both in-store and online.

With more time to prepare and onboard, the training you’ll be able to provide will enable you to ensure new or temporary staff are completely up to speed before peak trading commences; reducing the risk of mistakes made due to inexperience.

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To support your people, having the right technology

in place will help provide the best possible customer

experience. From stock integrity to warehouse

management, customer relationship management

(CRM) to enterprise resource planning (ERP); all

business systems should be fully able to cope with

seasonal fluctuations.

That means preparing for the rush by accounting

for risks from every angle, in order to avoid

disappointing customers and ultimately loss of

revenue. For example, the average cost of a failed

delivery in the UK is £14.3510 which on its own may

seem like a minor expense.

However, when multiplied by an influx of mistakes

made during peak trading times, these costs can

spiral. Last year’s festive period saw 16 million

customers experience delays with their deliveries,

73% of whom will this year be avoiding the offending

retailers11.

Supply chain systems that provide visibility at all

times will prevent issues with shipments, or any

other area across the distribution network – keeping

your promise to customers and upholding your

brand reputation.

Systems that support

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On the subject of visibility, integrating ERP

with your e-commerce platform can provide

accurate sales forecasting and allow you to

understand and meet customer demand.

By forecasting your inventory requirements well in advance using previous performance and sales metrics as a guideyou can be better prepared to hit sales targets and minimise overstocking or understocking. In support of this, warehouse facilities should be prepared to handle greater volume, with adequate and well trained resource to oversee smooth operations.

With an integrated ERP solution like Microsoft Dynamics 365, synchronisation with your e-commerce platform enables you to view transactions, account information, and to track and fulfil orders. Order, inventory, product, customer, and shipping information can be communicated between different systems.

And by adding campaign management and complaint handling capabilities, you gain a complete, comprehensive view of all your customers’ interactions. The result? A more

consistent customer experience during your

peak trading periods – and ultimately happier

customers more likely to return.

Another key consideration is whether your e-commerce or in-store payment systems are equipped to cope with a sudden increase in sales. In-store, system downtime can result in queues and delays that affect the customer experience; while online, impatient shoppers will abandon shopping carts. These inconveniences also have the potential for more widespread and longer-term impact, if word spreads about a bad experience.

In August this year, IKEA suffered an outage of its UK website, leading to issues with features

such as online ordering and its stock checker that interrupted sales for two-weeks12. Last year UK retailers The Perfume Shop and Game all suffered technical glitches on Black Friday last year, slowing purchasing activity on one of the busiest shopping days of the year.

It is therefore imperative that retailers ensure systems are prepped and fully capable of handling a sudden flood of transactions, to avoid frustrating and potentially losing customers.

04 Integration with E-commerce

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68% of shoppers will leave a retail site and look elsewhere if they encounter basic functionality issues.12

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Along with a consistent shopping experience,

consumers expect their chosen item to be

available if advertised. During any peak sales

period, the ability to accurately manage stock

is crucial. With increased activity, it’s all too

easy to run out of stock on a popular product, or

conversely overstock for a promotion that doesn’t

prove effective.

Having too many separate systems on the

journey between warehouse and consumer can

result in a struggle when it comes to reacting

quickly to consumer demand, so by ensuring

your systems are capable of streamlining the

stock management process during fluctuations,

you can gainreal-time information on products

and avoid stock outages. Integrated warehouse

management solutions give you quick and

accurate information on your live stock position.

This allows you to plan and adjust accordingly, managing stock availability across multiple depots, and ultimately into your stores and customers’ hands.

Accurate stock planning

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With the explosion of mobile usage, physical stores will need to do much more than provide a consistent shopper journey and manage stock availability to compete with their online competitors.

2018 has seen more of the high street giants fall victim to the retail apocalypse. With House of Fraser, Debenhams and and WHSmith all annoucing store closures, times are tough for UK retailers. In a bid to fight back, more and more brands will be working to improve their

online offerings to attract as many customers as possible. Standing out from the crowd is a greater challenge than ever before, which is why it’s important for your marketing strategy to appeal to your existing customer base as well as prospective customers enticed by holiday shopping – both on and offline. When it comes to planning your peak period marketing strategy, personalisation and engagement should be front and centre. Online, customers who feel connected to the businesses they shop with are more likely to result in a sale.

Looking at your customer segments will enable you to tailor your marketing, from customised themed “shops” to personalised gifting guides developed organically as trends fluctuate.

Taking it online06

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Image search now accounts for over 25% of total organic searches, so pay it some special attention during peak.13

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It’s crucial that you therefore take time out to consider your promotions, who you’re targeting – and when. Valentine’s Day is the first gifting event of the year, with consumers searches beginning to trend upward at the beginning of the year14.

Eager shoppers will be expecting great bargains, with many taking the time to shop around to find the best prices - as well the best overall shopping experience. Knowing when they will start shopping, and what items you

expect to sell quickly puts you in a far stronger position when planning your online strategy for the peak period.

There is no doubt that peak retail trading has changed dramatically. In order to halt the downward trend, we’re seeing when it comes to declining sales, retailers must start strategically planning well in advance of all relevant sales peaks throughout the year. The golden quarter may still be strongest from a sales perspective. However, integrating your

approach and getting systems ready for peak periods throughout the year will help ensure maximum sell-through, minimise disruption, and an enhanced customer experience.

For more information on how to ensure your systems are ready for peak trading, get in touch with us today.

Summary07

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See what your business can gain by harnessing

the power of Microsoft Dynamics 365 to help smooth

out peak trading fluctuations.

Contact HSO

Sources: 1P2P Mailing | 2Summit | 3YouGov | 4BBC | 5Shoppertrak | 6Global Data | 7Coresight Research | 8City AM9Retail Gazette | 10P2P Mailing | 11Retail Dive | 12Internet Retailing | 13Retail Gazette | 14Essential Retail | 15Search Engine Journal

HSO UK

info-uk@hso.com

+44 (0)20 3128 7767

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1st Floor, Enterprise Point, Altrincham Road, Sharston, Manchester. M22 9AF | T +44 (0)20 3128 7767 | info-uk@hso.com

Since 1989, HSO has been a Microsoft Solution integrator and has become a successful ICT company with more than 650 employees and offices in Europe, North America and Asia. HSO supports local and international companies in retail, wholesale distribution, manufacturing and service with their digital transformation journey. The foundation for this is Microsoft Dynamics 365: A complete platform of CRM, ERP, Office 365 and BI software. HSO takes care of the implementation, optimisation and 24/7 support of these cloud solutions. HSO belongs to the Microsoft Dynamics Inner Circle and is proud to have been named the ‘most customer-oriented Microsoft partner’.

More information about HSO can be found at www.hso.com. Follow us on Twitter via @HSO_Tweets.

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