The holiday season is a major time for retailers. Consumer spending is surging, spirits are high, and massive profits are ripe for the picking. But, there is also a lot to do to get ready for the holiday season and to stay ahead of seasonal trends.
In this guide, we will walk through all things retail holiday readiness—from challenges to how to tackle them, all backed by statistics and surveys from real consumers.
Holiday Readiness for Retail: Challenges
While there is a lot of opportunity around the holiday season, there are also challenges that you, as a retailer, will need to consider. Here are a few you should be aware of as we enter into the holiday season.
- Inflation: There is no longer any denying it—the economy is not looking bright, and inflation rates are impacting consumers. In fact, this holiday season, a third of consumers say that inflation will impact the way they spend.
- Maintaining margins versus offering discounts: The knee-jerk reaction to inflation is to offer discounts. This is what consumers are looking for in the face of economic uncertainty and high prices, so you should meet their demands, right? Well, not exactly. While creating a sense of value and offering deals to your customers will be key to converting sales, you always have to keep your margins and budget in mind when devising your pricing strategy so you don’t dig yourself into a hole.
- Retail labor crisis: With additional store traffic, online orders, and inventory comes additional staffing needs, but the retail world is facing an ongoing labor shortage in the wake of COVID-19. In fact, 87% of retail leaders say they are worried about talent shortages in 2023.
- When to start: Holiday shopping is starting earlier and earlier with some consumers even starting as early as September. The line retailers have to walk is how they can be prepared and meet the needs of early holiday shoppers without starting too early and seeming overzealous or driving people away.
- Inventory management: Keeping the right products in stock at the right time in the right quantities—i.e., Inventory management—is a challenge all year, but the holidays, supply chain disruptions, and an uncertain economy only make this calculation more complex.
- Increased traffic: The holiday season means more traffic in-store and online. This coupled with increased customer service and personalization expectations can lead to dissatisfied customers if you aren’t prepared with the right customer service training, staffing, and tools.
Need help managing your online customer service traffic? Consider adopting an ecommerce chatbot to field inquiries and answer customer questions instantly.
Holiday Readiness for Retail: Recommended Timeline
There is a lot that goes into being ready for holiday shoppers. Here are recommended timeline suggestions to keep you on track. I also discuss certain aspects of retail holiday readiness that you need to prep before the holiday season.
Retail Holiday Readiness Action Items
Research and Planning
(~12 weeks before, around September)
(~8 weeks before, around October)
(~4 weeks before, around September)
Survive and Thrive
Elements of Retail Holiday Readiness
Here is a rundown of everything you should consider as you are taking on holiday readiness in your retail store.
Holiday Product Sourcing
There are two main areas of holiday product sourcing—holiday-specific products and an increased volume of regular products to accommodate the uptick in holiday traffic.
In terms of holiday-specific products, you want those in your possession by mid-October and on the floor sometime between then and mid-November. To meet this timeline, be sure you are sourcing and ordering holiday products during the summer and early fall. For sourcing, you can look to online wholesale websites like Faire, Alibaba, Tundra, or other wholesale suppliers.
Learn more about product sourcing with our Ultimate Guide to Product Sourcing.
As for increasing your non-holiday-related products for the holiday season, you will want to follow a similar sourcing and rollout timeline. The more complex question is determining what products to buy and how much—in other words, good inventory management practices and strong demand forecasting.
Did you know? The top holiday gifts purchased in 2022 were clothing and accessories (50%), toys (34%), gift cards (28%), books/video games/other media (26%), food and candy (23%) and personal care and beauty items (22%).
To determine the quantity and type of products you should invest in during the holidays, there are two primary places you can look:
- Holiday shopping studies: Resources like the Chamber of Commerce, the National Retail Federation, JLL, HubSpot, and other authorities in commerce and retail conduct annual holiday studies to help retailers better understand consumers and their holiday shopping behaviors, as well as sales forecasts based on current economic trends.
You can also use resources from our site, like our roundup of Black Friday Cyber Monday (BFCM) Results & Sales Numbers, Important Black Friday Statistics to Know, and Cyber Monday Statistics.
- Point-of-sale (POS) system data: You can observe past holiday season trends and view reports about your specific store with your POS system. Some systems, like Lightspeed, even have sales forecasting tools and can help you determine your upcoming holiday inventory needs.
In addition to products, you will also need to get additional staffing specifically for the holidays. This might mean hiring additional staff or you could just need your full staff ready to work throughout the season.
The best way to determine your staffing needs is to start early. Write out your holiday schedule in October or early November, and figure out how many people you will need and when. From there, you will want to send out your holiday schedule to your current staff so you can gauge their availability and make plans to accommodate their holiday hours.
Writing out the schedule will also help you determine if you need to hire seasonal staff for additional support. Don’t be surprised if this is the case. In 2021, retailers made 669,800* seasonal hires.
Another component of retail holiday readiness is devising holiday marketing campaigns. The best way to ensure that your holiday marketing is a success—i.e., it reaches people, creates hype, and inspires people to shop with you—is to create a marketing plan. We recommend using a retail marketing calendar to get all your ducks in a row and to ensure you are prepared.
While you certainly don’t want to start marketing for the holidays too early, more than ever, people are planning their holiday shopping ahead of time and starting to research and collect ideas as early as even September.
In fact, Google Analytics found that 74% of modern consumers plan ahead for the holidays, using Google searches, social media, and online marketplaces to search for inspiration and research products and gift ideas. We recommend starting to roll out gift ideas and soft holiday marketing campaigns starting in October so you are ready with resources as your customers start searching.
In terms of how you should reach people, email marketing is going to be your champion. Consumers prefer to receive marketing materials via email with fewer than 10% preferring SMS. You should also update your website to include holiday marketing materials, such as gift guides, promotions, holiday-themed landing pages.
Get more holiday marketing inspiration with these resources:
- Black Friday Marketing Strategy: 26 Ideas to Drive Sales
- 18 Retail Marketing Strategy Ideas to Drive Sales in 2023
- 2023 Cyber Monday Strategies & Marketing Tips for Small Businesses
- 2023 Back-to-School Marketing Ideas & Trends for Retailers
In addition to marketing to your customers, you should also update your physical storefront and/or online store with holiday merchandising. To prepare for holiday merchandising, you will want to start gathering decor in September and October to give it time to arrive. Online, you can wait a little longer, but you should be prepared with your designs by the time early November rolls around.
From there, you can begin rolling out your merchandising. For in-store, holiday merchandising schemes are typically deployed in mid to late November, with Halloween, Thanksgiving, and Black Friday dominating store merchandising before that. Your online store might start slightly earlier to accommodate people’s gifting/wish list research, but I do not suggest changing your homepage’s theme until after Black Friday.
Ecommerce Holiday Readiness
Online shopping is the most popular way that people shop for the holidays, with 75% of holiday shoppers saying they plan to do most of their holiday shopping online. It’s important to take steps to prep your website in every way you would your physical store—listing holiday products and upping your inventory, creating marketing campaigns that drive people to your site, staffing your online customer service, and creating holiday site designs.
The biggest difference between in-store versus ecommerce holiday readiness is the timelines. As we looked at before, people are researching around the holidays earlier than ever—looking for deals, gift inspiration, and wish list items online before they ever set foot in a store. This means you will want to get started on your holiday ecommerce strategy slightly earlier than in-store (see timeline above).
Get inspired and start planning how to get people on your ecommerce site this holiday season with 22 Ecommerce Marketing Strategy Ideas for Retailers.
The other item you will want to consider for ecommerce is fulfillment. As your order volumes increase, you will want to consider who will manage your online orders as well as what fulfillment company will best fit your needs. You will also need to consider holiday surcharging, as most shipping partners do upcharge during the holiday season, as well as packaging, and shipping speeds.
Retail Holiday Readiness Tips
Now that you have a sense of all the hurdles you will need to overcome and the items you need to address to make this holiday season a success, here are a few tips on how you can get yourself off the ground, over the hurdles, and into a holiday season of profits.
Start Yesterday (and Don’t Stop)
While it might seem like the holiday season is still far away, people are either getting ready to shop now or have started already. In a study from the National Retail Federation, they found that 56% of Americans started their holiday shopping before Thanksgiving in 2022, and anticipate that they will likely start even earlier this year to try and save money and take advantage of promotions as inflation rises.
This means you need to be ready for holiday shoppers now. Get your merchandise on the sales floor, decorate your stores, offer holiday promotions—anything you might have done for the holiday season in December should be starting earlier than you think. And, you can’t let up—while holiday shopping is starting earlier, people still spend throughout the holiday season, up until the New Year rolls in.
Understand Your Customers’ Motivations
Another important thing you need to consider to ensure holiday readiness is what is actually going to appeal to your customers. In other words, what promotional strategies are going to get people buying from your store and choosing you over the competition?
As you may have guessed, price is going to be the biggest driver among holiday consumers, with 45% of people citing that as the most important factor in their holiday shopping considerations. Price is then followed by product quality (11.83%), the uniqueness of the product (10.31%), and shipping speed (7.25%). Clearly, for the majority of consumers, creating a sense of value and offering the lowest prices you can is going to be the best way to stay competitive and drive sales this holiday season.
Offer Fast, Convenient Fulfillment Options
More and more, a major part of ecommerce holiday readiness is your fulfillment strategy. Shipping speeds and prices play a major role in consumer preferences, with 53% of American consumers stating that they will turn away from a brand that doesn’t meet their delivery needs. Not only that, more than a third of consumers say they will pay more for faster shipping guaranteed.
Nailing down your fulfillment strategy that is fast, affordable, and reliable will be pivotal to converting sales this season. Here are a few resources that you can use to get started:
- What Is Order Fulfillment? 2023 Strategy Guide
- In-house Fulfillment vs Outsourced Fulfillment: Ultimate Guide for 2023
- 9 Best Order Fulfillment Companies for Small Businesses for 2023
Create a Sense of Value
While the economy is weaker than it has been in recent years, experts still anticipate that per-person spending will remain about the same as it has for the last decade—about $830 per person. People know, however, that with inflation, their dollars will not go as far as they have in the past. In efforts to get as many gifts as they can without spending more, 77% of consumers are planning to be more mindful of value and seeking out cost-effective options while they do their holiday shopping.
On average, 46.18% of consumers plan to spend the same amount during that 2023 holiday season as they did in 2022 and 17.18% anticipate spending more.
Similarly, in survey findings from the National Retail Federation, they found that more than 80% of holiday shoppers anticipate seeing higher prices this holiday season and 63% of them will be prioritizing sales and promotions more so this season than last. While you will want to be mindful of your margins, sales and promotions are going to be key to creating value for your customers and making them feel like they are getting their dollars’ worth.
Focus on Customer Service
Another way that you can boost your retail holiday readiness is to up your customer service game. This means training your employees on your policies, making sure those policies are favorable for your customers, and implementing your customer service quickly and effectively.
Read more about how you can create a positive customer experience with our 20 Retail Customer Service Tips & Examples.
You might not think that answering questions and helping shoppers with their needs is something you need to prioritize with all that happens during the holiday season, but 45% of customers cite poor customer service as the reason they take their business somewhere else—providing a positive customer service experience is key to staying competitive.
Bring the Holiday Spirit With Merchandising
One of the best parts of holiday shopping is the spirit of the holidays that retailers evoke with the decor in their stores. From window displays, to holiday music, to garland accents, to holiday product displays—the in-store holiday shopping experience can truly be a magical one.
Harness the spirit of the holidays this holiday season with holiday merchandising, like in the images below. This will not only help you attract foot traffic, but can also help you to capitalize on the holiday buying potential by keeping the spirit of celebration and joy alive in your store.
Work the SMB Angle
As a small business, there are a lot of areas where you can’t compete with big box stores, think price, volume, market proliferation, etc. That doesn’t mean, however, that there are no areas where your position as an SMB is not favorable to consumers—and those are the angles you should work.
A 2023 holiday shopping survey from Celigo found that 53% of shoppers prefer independent retailers, primarily because of their curated inventory that features distinctive products not typically found in larger chains.
So, consumers associate small businesses with higher quality, better product curation, and more unique offerings than large retailers. Make it easy for customers to find these qualities in your stores with great product displays, informational signage, and a focus on sourcing unique goods.
Offer Flexible, Simple Returns
Returns are a major consideration for consumers, especially around the holiday season as gifts are so often brought back to stores. In fact, the average return rate for online purchases is typically around 20%, but during the holiday season, can surge up to 30%–50%. In response, shoppers are going to be highly critical of your holiday return policies, with 79% admitting that they scrutinize retailers’ returns policy before shopping during the holiday season.
In 2022, returns after the holiday season were approximately 17.8% of their holiday sales.
I would suggest implementing a holiday return policy for purchases made between mid-October through the New Year. For example, at my store, our standard return policy was a two-week period where shoppers could get store credit if they changed their mind about a purchase. For the holiday season, however, we allowed store credit returns for any purchases made in November and December up to two weeks into the New Year or Jan.14. While some customers would even back out of purchases because they couldn’t get a refund, this policy was typically enough to console any return policy hesitations.
Learn more about how to write a return policy and handle the logistics of online returns with our guides to How to Write a Retail Return Policy (& Free Templates) and What Is Returns Management: Definition & Strategies for 2023.
Prioritize Your Loyal Customers
In a survey from Justuno, they asked customers where they would be doing their shopping this holiday season, and more than two-thirds (69.9%) said they plan to stick with brands they know and with whom they have already shopped. We all know that existing customers are the base of your brand and make up the majority of your sales, but how can you reach them this season and drive them through your doors? Here are a few ideas:
- Create a loyalty program: Loyalty programs are a great way to reward your customers and incentivize them to choose you over your competitors. There are lots of ways that you can structure your loyalty program so that it serves both you and your customers and creates incentive to visit during the holidays.
- Host loyalty events: If you already have a loyalty program in place (or if you have a customer database with contact information) consider inviting your loyal customers to loyalty events where they can shop at exclusive hours, buy exclusive merchandise, or take advantage of a members-only promo.
- Offer member promotions: Make your customers feel special and create a sense of value with exclusive member promotions and offerings, like loyalty member discount codes and deals.
- Offer holiday loyalty rewards: Reward loyal customers for choosing you during the holidays with holiday rewards that are even sweeter than the ones they receive during the rest of the year.
Refine Your Mobile Experience
Online shopping is no longer happening at people’s computers and is moving more and more onto mobile devices. In fact, almost 50% of consumers say they plan to do most of their holiday shopping from their mobile devices this season.
To ensure your ecommerce holiday readiness is up to the challenge, it is key to make sure that you have a mobile-compatible site. This means taking your ecommerce site and being sure that its mobile version is easy to navigate, the checkout experience is optimized, and there are no formatting issues. The top ecommerce platforms will include mobile views of your site, where you can edit how your store looks and performs on mobile devices.
Personalize the Shopping Experience
Another major trend to incorporate into your retail holiday readiness plan is personalization—one of the top ecommerce trends this year. This means offering personalized product suggestions, segmented outreach marketing, and custom promotions typically through the use of AI.
You can learn more about the place of AI in retail as well as our top recommendations for retail AI solutions with our guide to AI in Retail: Small Business Guide.
While investing in personalization technology might seem like an unnecessary investment, Mckinsey research shows that brands that excel at personalization generate an average of 40% more revenue than brands that don’t. Not only that, personalization is becoming a consumer expectation with 71% of consumers saying that they expect companies to offer personalization as part of the ecommerce experience and 76% feel frustrated when this expectation is not met.
Retail Holiday Readiness Frequently Asked Questions
Click through the questions below to get answers to some of your most frequently asked retail holiday readiness questions.
The majority of holiday shopping starts in November and goes through to the new year, but we are seeing more and more consumers start their shopping in October with some even starting as early as September.
The Black Friday and Cyber Monday weekend are always the biggest shopping days of the year, but you can also expect an uptick in holiday spending the week before Christmas for all those last-minute gifts.
There is a lot that goes into getting your retail business holiday-ready, including creating your holiday merchandising and online branding, acquiring holiday inventory, pinning down holiday staff, creating a holiday marketing campaign, setting your pricing strategy, and more.
Retailers typically see 19% to 30% of their annual profits during the holiday season, so there is room (and reason) to invest in your business at this time of year so you can take advantage of all the potential. I would recommend setting aside 15% to 25% of your marketing and inventory budget for the holiday season so you are prepared but not in danger of sacrificing your bottom line.
The holiday season is a major time for retailers, with tons of potential, but you need to prepare adequately if you want to be able to take advantage of this potential. From inventory to marketing, to staffing, to shifting consumer preferences and holiday shopping trends—there is a lot to get ahead of this holiday season. With our guide to retail holiday readiness, you have all the tools you need to take this holiday season by the horns and watch the profits roll in.