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Christmas Stock Planning For Product Retail Businesses: Avoid Sell outs & overbuying · The Resilient Retail Game Plan - retail insights, retail trends and best practices

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Do you know if you've got the right stock ready for peak season? Or could
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you be missing out on sales or even sitting on piles of
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unsold stock come January? Having
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a clear plan for your stock is the absolute backbone of a
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stress free quarter four. We are heading straight
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towards quarter four. And yes, it's time to talk about Christmas,
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it's time to talk about peak, and it's time to talk about getting your
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stock planned out ready to go. What we're going to be going
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through in this episode is a simple step by step
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checklist of what you need to think about ready for your peak season
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success. So this might be an episode where you want to grab a notebook because
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by the end you will have a clear plan of action to make sure
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that you are ready to go with your stock for the busiest sales
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period. So why does stock planning matter?
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I spent nearly two decades in big retailers, including some where
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Christmas was absolutely the make or break point of the
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year. And let me tell you, planning out our stock was half
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of the job. It was all about getting ready, getting
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prepared, making sure that we had the right stock at the right
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place at the right time. And the reason for that is
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because stock and sales are completely intertwined. So
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if you are relying on Christmas to drive a big bulk of your sales this
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year, you're going to want to make sure that your stock is going to support
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that. So stock equals cash. It's as simple as that.
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Anytime you're spending money on stock, then it is
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effectively tying it up. So the right stock strategy can help you free
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up cash and boost your profits. There are
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dangers galore in the peak season as well. There's dangers of
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over buying, so tying up money and space versus under buying
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where you might be losing sales. And the peak season
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amplifies both those risks. So it is well
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worth your time spending a few minutes thinking
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about what you want to do to drive your sales at Christmas and checking that
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you've got the right stock to support you. So, for
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example, I spoke to a client in January who
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had had an amazing start to their Christmas season, but because they hadn't
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really recognized just how much their sales have been ramping up,
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they sold out well before the peak sales really kicked in and
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left money on the table. And every year I speak to
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people who have got themselves in a difficult situation on the other way
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around, that they've overbought for Christmas or they've overbought in that
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peak holiday period and therefore they're ending up sitting on
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far more cash than they should in January. So what we're going
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to do today is walk through some simple steps to
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try and get, get ahead of the Christmas rush and
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to give you that peace of mind that you are in a good position
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going into peak. And one of my favorite stories, if you're thinking, well, I,
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I should know this stuff by now, one of my favorite stories is I worked
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with a client, they're a fashion brand, and they came to me because actually they'd
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been to a Shopify event all about Black Friday
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Cyber Monday. And specifically what they wanted support with
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was how much stock they should have for this big event, which was a huge
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piece of their yearly sales that they were planning.
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And they talked all about getting ready for Cyber Monday, Black Friday,
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Cyber Monday. And then afterwards, he went up to the person who
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presented and said, well, how do I actually work out how much stock I need
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to have? And the person said, oh, it's really about your gut feel. You need
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to go with your gut. And for me, the reason that
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I love this story is because it tells me that these kind of things, this
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kind of information is really important, that there isn't enough out there about how you
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actually work this stuff out. And secondly, it just goes to show that lots
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of people who maybe are pretty high up in the e commerce world, in the
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retail world, this is not an area that even they know about
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necessarily. If you're ever thinking, how do I figure this out? How do I even
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do it? Then we're going to unpack some of that today.
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So the first thing you want to do, nice and simple is,
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is you want to look at last year's sales data.
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Now, it's possible that you're listening to this podcast and this is your first ever
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Christmas, in which case you're going to have to skip this step. Although I would
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say, arguably I would have a look at what you've been selling so far
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because it's going to give you some clues as to what your bestsellers are going
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to be at Christmas as well. But let's say that this is
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not your first Christmas, which I'm sure for a lot of you it won't be.
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And so we're going to start with a bit of a review. Now, my favorite
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thing to do in January, I do it every year inside the membership group Resilient
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Retail Club, is we have a lessons learned and strategy
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session which is all about recapping Christmas.
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And so we do it in January because we know
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that people forget and years gets busy and
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you think they'll never forget what happened last Christmas, but you can easily.
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And so what we want to do here is, ideally you'd have done this in
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January, but bearing in mind that there's the best time to plant a
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tree was 50 years ago. The second best time to plant a tree is today.
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So let's go for it. We're going to dive in and look at last year's
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performance. And the beauty is most reporting systems will just let
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you change the dates and look back and it should be pretty easy for you
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to get this information. So what we're looking for here is
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what your best sellers were. We want to know what your best
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selling products were during the Christmas time period. And it's up to you
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what you consider the Christmas time period. You might want to consider the months of
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November and December together. You might want to look at the whole fourth quarter
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October through to Christmas, it's up to you. But during that Christmas selling
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period, however you define it, what sold best, Have a look at
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your best sellers and more importantly, how many of those did you sell?
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You're looking for the 80% of sales products.
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So 20% of your products most likely are going to be generating
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80% of your sales. These are the ones you want to get right. So if
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you've got hundreds of products, don't worry, just focus on your top
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sellers because that is going to be what makes or breaks it.
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So you're going to want to know what, what your bestsellers were and how many
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you sold of them and then also have a look. What products did
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maybe don't pop up on the bestseller list, but you know that as you scroll
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down the list and you look through, you think, oh, do you know what we
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sold out to that really early? Ironically, one of the things that happens,
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especially in independent retailers in bricks and mortar, is when you
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sell out of something, you no longer see it. So it can almost drop out
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of your mind. But just take a time to think through. Were there things that
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you bought and just went really quickly that you could have sold more of? And
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were there products that even if they sold quite well, had they declined year on
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year? Are you beginning to get the sense from your customer that they're moving away?
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And most importantly, you want to take the lessons from this data. You don't just
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want to look at this data just so that you know how that you sold
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400 of the Star ornament in the month of November and December.
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You want to really go through it and look and say what worked well, that
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I need to do more of. Okay, those, those ornaments were great.
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Can I bring more in? Okay. I equally had
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another type of decoration that usually was my bestseller but had dropped
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down. Okay, do I retire it? Do I replace slow movers? And
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where did I miss out? Where did I have products that I definitely could have
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sold more of? So once you've completed all of that
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analysis, then what I'd encourage you to do is
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identify your hero products. So your hero
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product does not have to be Christmassy. It doesn't mean that you
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can't make it a little bit more festive with some festive packaging or
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something like that, just for the Christmas time period. But when I talk
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about Christmas hero products because it has the word Christmas in
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or peak, then people tend to think, oh, does it have to be themed?
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The answer is absolutely not. The most important thing is that
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it's giftable. So what is your best selling giftable item
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year round and is that applicable for Christmas? Chances are probably yes.
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Chances are that's probably going to be your hero product.
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Now you may want to have different hero products.
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You may have one which fits into the five to ten pound price point
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that's great for stocking fillers. There's the 20 to 30
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pound gifting sweet spot, which is also really important at
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Christmas time. And then there's also that 50 pound plus for special
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gifts. Now if you sell jewelry, for example, you
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may not have all of those different price points mapped out. That's absolutely
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fine. You still want to map out your hero product, the one that people are
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most likely to want to buy as a gift at Christmas. But
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equally so, if you are somebody who has lots of different products, you're selling
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lots of different ranges from different brands, then you
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definitely want to pull out your hero products, not just one hero
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product, but across the price points. So why are hero
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products so important? Well, it just helps you keep organized, it helps
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you keep focused. You can make sure that you have at least some kind
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of photography that will help you sell it as a Christmasy item.
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You can focus. If you're going to be doing PR outreach, for example, or
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trying to get into gift guides, then that's what you focus on with your hero
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product. You want it on your homepage, you want it as part of your email
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campaigns, you want it in your social media, for example. And picking
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those products now means that you become really focused and really clear
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as you're going through the season rather than each week thinking, right, well, what
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do I talk about? What do I talk about now? So make sure you've got
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those HERO products mapped out. And the other
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thing that is useful about mapping out your product, your HERO products.
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So if we come on to step three is it also allows you to review
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your range and fill your gaps. So for example,
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you might be doing this exercise thinking, what do I really want to focus on?
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And then you suddenly realize, well, I really don't think I've got any strong
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contenders for stocking fillers this year. Or
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actually everything that I've got is either under 10 pounds or over
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50. I really don't have anything in that 20 to 30 pound
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gifting sweet spot. So it can be a really useful exercise to
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help you think about what you might need to tweak. Are there any
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gaps that you need to bring in? Now, depending on how you source
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your product, this ship may have sailed. You may not be able to get any
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new products in for the Christmas season, in which case you're just going to have
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to think about how you can work your messaging to support the products you do
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have. But for lots of you, where maybe you're designing your own products or,
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or perhaps you're buying products in from other people, you are going to be able
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to make those last minute tweaks, have a look through, have
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a look at everything that you've got, pull out what you think your heroes
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are going to be. It's also good, you don't necessarily want to just
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talk about your heroes all the way through the long Christmas promotional
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period. So you may want to pick up, pick out some alternates as well in
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each category. But then just have a look and think, am I missing anything?
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Again, if you're somebody who is a lifestyle store, for example, a gifting
10:55
store, have you covered off almost, think about what marketing messages
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you might want to send out during that time period and if you've got the
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product for it. So you might want to do gifts for her, you might want
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to do gifts by interest. So for gardeners or for
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bikers or wild swimmers, you might want to think
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about hostess gifts and Christmas
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party earrings and Christmas Day jewelry and think about
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all the different messages and then just think, do I have the product to support
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that. It's much easier to do this now before you get into the busy
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time period than to arrive in November and December and think,
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oh, I wish I could do a gift guide for under 10 pound gifts, but
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I've really just got this one item. So really look strategically at
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your range at this point and if you are able to make changes,
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then have A look and think about where you can fill in the gaps because
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it will make life so much easier for you as you move through throughout the
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season. So step four is
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set your launch dates. So this
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is something that comes up a lot. When
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do you launch Christmas? And it
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depends. It's what you're used to in your business, what's worked for you in the
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past. But I would say very broadly speaking, you can have a
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soft launch. In other words, put it out in store without making a fanfare about
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it, or put it up on your website, maybe even in September or
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October. But then generally speaking, the point in which we can
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all agree that it all becomes Christmas, all consuming, all
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Christmas, or as one of my clients once called it, screaming Christmas,
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is post Bonfire Night. So we get through
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Halloween, we get through Bonfire Night, and then pretty much it
12:34
switches over and we're talking about Christmas. So most people will do their
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full Christmas launch that will be coming up at the
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beginning of November. So have a think about
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when you want to talk about it. Have a think about things like
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when your emails will go out to talk about it, when do you need to
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have photo shoots done ready for those emails,
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when do you want to pitch to pr, if that's something that you're going to
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be doing. And then you can work backwards from your chosen launch
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date to make sure that you map out your content and you
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map out your promotions. Once you set your dates, then
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that helps you work backwards from that, making sure that you've done everything you
13:16
need ready to go for your launch. So you can even
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map out when you're going to create your content. You could do it ahead of
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time. Why not do it in September? It's a much better month to try
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and prep all of your Christmas marketing, for example, than trying to do it
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all in the peak time period. So pick your dates and then
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also pick, like when do you think are going to be the peak selling periods
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for these products? Because that brings us on to step five, which is all about
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forecasting your sales. So you've looked
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at last year, what you sold, you've looked at this year, what you're building, all
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of your ranges around, you've identified. If there's any
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gaps, you filled those in. Now it's time for you to
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think about what you believe that you are actually going to
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sell. So how do you do that? Well, again, if
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this is your first Christmas, it may be a little bit tricky, but I would
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just say, say have a think about what kind of an uplift you might Expect.
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Do you think that if you sell 10 of something in an average week,
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maybe assume that you will sell double that in November and December.
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As long as you have logical assumptions, you're going to be able to tweak
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and refine it so that in future years you will have better information.
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But for this year, you are just going to have to go with an educated
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guess, something that seems logical, that you've
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worked through. But ultimately, until you get into a Christmas season and
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see how it reacts for you, you won't necessarily know. So for
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everybody else you can use historical sales data. So if you
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believe that your number one item is going to be the lavender candle
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this year, last year you sold a hundred lavender candles, but this
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year so far your sales are pretty much double what they've been to this
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point last year, then you could say, right, well I think I'm going to sell
14:57
about 200 lavender candles. Then you
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could say, well, I think I'm going to sell about 200 lavender candles this year.
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So for example, you're just taking a combination of your
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current sales performance and your last year's sales performance,
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putting them together and coming up with an estimate. So that is what you
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call your run rate. So your run rate is how you're currently performing against
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last year. So if your sales are double what they were last year to
15:24
this point, then you can, you could assume, you could take an
15:28
educated guess that your Christmas sales are going to be double. For example,
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you can also go through and if you think actually that feels
15:36
really punchy. I don't like the idea of planning my Christmas sales at double,
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then sure, by all means, be really conservative. I'm quite often
15:43
conservative when I'm planning out one to one clients and looking
15:47
at their Christmas sales. I tend to slightly under plan just
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because sometimes you
15:55
just can't physically process twice as many products
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as last year. So you need to be a little mindful of what's actually going
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to be going on in the business. Do you think that you're going to hit
16:04
those numbers? And if it feels too scary and too
16:07
like you could have to over commit to stock in order to hit those numbers,
16:11
maybe pull it back slightly on the basis that it's better to under promise and
16:14
over deliver than to set yourself really crazy big targets and then be
16:17
disappointed if you don't hit them. So
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if it's a new product again, you could have a look at and say my
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best selling item usually sells about 50 a week during the
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Christmas period and we've got eight weeks of promotion. So I think
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that's going to be about 400 units because I think this new product is
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going to be one of my best sellers. That's why I've chosen it as my
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hero product. So for each one you want to go through and logically look
16:43
at, for your, each one of your hero products you want to logically go
16:47
through, look at what did I sell last year? Either this product or an
16:50
equivalent product. What's my uplift? I think for this year, therefore,
16:54
what do I think I'm going to be generating?
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And again, it is an estimate, right? So
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you're, you don't know for sure the all sorts of different things that can
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happen. It can also actually help you to work out when you
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do this exercise to kind of go through and go, well, hang on a minute,
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if I was selling 200 of those a day, can I even physically
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dispatch that? Again, any work that you can do to check through those
17:19
assumptions now, as opposed to waking up in November and realizing that
17:23
you've got a capacity issue, anything that you can do now is super, super
17:27
helpful. So do think through what this actually means. If you're planning
17:31
double the sales of last year, just think to yourself, now, can I physically
17:34
do that? Who do I need to bring in? Do I need more space? Do
17:37
I need more resources? That's, that's a whole other piece of work. But
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then when you're looking at the individual product
17:44
lines, then always ask yourself this very, very important
17:47
question when it comes to your Christmas purchasing. Which is
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worse, having too much or not enough?
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And ask yourself that for every single product that you're ordering ready
17:59
for Christmas. And there's two different ways of looking at this.
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Some products are Christmas specific. They are
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what I like to call brown bananas, which means that on the 26th of
18:10
December, nobody's going to want to touch them. So that's anything that says Merry
18:13
Christmas, that's an Advent calendar after we've got past about
18:17
3rd December. It's anything that's got a really clear
18:20
cutoff. Those products, generally speaking, if you ask
18:24
yourself that question, which is worth having too much or not having enough, the answer
18:28
is going to be having too much. Because if you're left with it,
18:32
you can't do anything with it for a whole year. You're just going to have
18:36
to sit on that stock, which is basically cash tied up in your business for
18:39
an entire year. So those are the products that you, generally
18:43
speaking, want to under buy. You want to be out of stock of those
18:47
really before Christmas so that you're not left either having to mark
18:51
them down significantly in a clearance sale to get rid of them or sit
18:55
on them for a whole year, store them somewhere and bring them back out for
18:57
Christmas. So those types of products, generally speaking, the question
19:01
which is worse, having too much or not enough? The answer is going to be
19:04
it's going to be worse for me to have too much. So therefore when you're
19:08
planning out your quantities, you're going to bring those quantities down, you're going to be
19:11
a bit more conservative. Now, your year round
19:15
bestsellers going back to this lavender candle, the question
19:19
which is worse, having too much or not enough? Well, actually if I've got too
19:22
much, I'm just gonna have more in January. I won't have to place an order
19:26
in January, that's actually absolutely fine. But if I run
19:29
out of my key bestseller halfway through the season, that's gonna be a
19:33
real pain for me. That's gonna mean that all of the effort that I'm putting
19:36
into these ads, into these campaigns, everything that I've got lined up, that's
19:40
all going to be for nothing. So therefore, that is an
19:44
item where when you do your analysis, maybe you add a buffer on you do
19:47
right. I think I'm probably going to sell 200, but you know what, I'm going
19:51
to buy 250 because it's worse for me if I have not
19:55
enough. So for every single product you go through, ask yourself that
19:58
question which is worse, having too much or not enough?
20:02
And then using that, adjust your forecasts
20:05
accordingly. So either bump it up a little bit to make sure that you don't
20:09
run out or pull it back so that you're not going to be left
20:12
sitting on extra stock. So
20:16
once you have done all of those things, then
20:20
final step, step six is to double check all of your orders and your
20:24
supplier lead times now. So if you are somebody who hand
20:28
makes your product, then you want to prep all of your components early.
20:32
Lots of people I know actually work throughout the summer to get their Christmas stock
20:35
ready. So obviously that's a little late now, but do
20:39
have a look and see what you can do to make sure that you've done
20:42
your work ahead of time. If you're
20:46
like most retailers, this will be a tricky time to be bringing an
20:50
intake. I know for a fact that there's a real cash flow pinch point at
20:53
this time of year in September, October if you are a
20:57
retailer. Lots of people I know get around it by using things like FAIR and
21:00
their payment terms. To help push the payment back further.
21:05
So I do appreciate that it's a tricky time of year, but if at all
21:07
possible you, if you've got products that you know are going to be a really
21:11
important time, really important part of your Christmas marketing
21:14
and now is the time to bring them in. So
21:18
this is your little checklist for you to go through. So number one,
21:22
review last year's performance. Number two, identify your hero products.
21:26
Number three, fill in any price point gaps or any gaps in the range that
21:30
you feel might need to be attended to. Number four, plan out your launch dates
21:34
for Christmas. Number five, forecast your sales by line and ask yourself
21:37
that all important question, which is more important, which is worse, having
21:41
too much or not having enough? And then make sure that you put in a
21:44
plan and you secure and prepare your stocks that you are going to
21:48
have the stock in time for Christmas. And if you're listening to this
21:52
thinking this sounds great but I just don't have time for any of this, then
21:55
I would love for you to check out the stock doctor service. It's at resilient
21:58
retail club.com stockdoctor and we have a done for
22:02
you service where trained retail professionals will come in and help you get ready
22:06
for your best Christmas yet. Thank you so much for listening and
22:09
I'll see you next week.