Holiday readiness in the digital age: how to prep for better seasonal sales by Modern Retail

Holiday readiness in the digital age How to prep for better seasonal sales

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Foreword Black Friday has expanded into an entire week of sales. More and more holiday shopping is done online. Shoppers expect bigger, better, more personalised service throughout the year - with holiday traffic ramping up, the pressure is on.

What does being holiday-ready mean in the modern day? How do retailers prepare for shopping blitzes, changing customer expectations and ever-increasing competition from all sides? Seasonal preparation has always been high-pressure, but now, it can be make or break your year. It’s time to get every piece of your business working in sync to make and break your holiday selling targets. Your inventory should be optimised

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according to concrete sales data, and your store traffic acquisition strategy should reach your customers where they are, be that in-store, online, or on their phones. If you’re feeling a little lost, look to a surprisingly robust tool many retailers aren’t taking full advantage of for help - your store’s ePOS system.

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Contents In this guide, learn how to… Optimise your inventory

4–9

Think about your product categories Plan ahead with sales data Leverage sales data to optimise stock Use your ePOS to set discounts

Manage and grow your traffic

12 – 15

Get found online Showcase your business on social media Work with influencers for holiday marketing Build a loyal customer base

Case studies

16 – 21

Brompton Bicycle Papillion Living

Also in this Ebook... Ask an expert: 7 of your top holiday questions, answered

22 – 23

About Lightspeed

24 – 25

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Optimise your inventory

Unorganised inventory works against you. Whether you’re handling your inventory manually or harnessing the power of your ePOS, you need an organization strategy that will serve you through the holidays and beyond.

Organizing your inventory is such an important piece of the puzzle that we’d call it a cornerstone of good business. Without clear organization, any sales data you get from your ePOS won’t be nearly as actionable as it could be otherwise. Set up your categories, act on sales data and optimise your inventory to your customers wants. Not only will you benefit throughout the year, the customer insights you’ll be able to gather can inform your holiday stock plans for surefire sales.

Think about your product categories Categorizing similar products by unique traits in your ePOS backend helps you zone in on what exactly is a best-seller, and what isn’t. Are some categories performing better than others? Are certain brands living up to the hype? Breaking sales down by category gives you the data needed to answer important questions like these about your inventory. Keep in mind that less can be more here; if at all possible, you should have a maximum of 10 departments or top-level categories. More than that may make working with the data you’re gathering difficult. Once you’ve decided on your categories, you can further classify your stock into A-B-C classification.

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• Your A inventory is comprised of 20% of the items in your inventory and makes up 80% of your annual sales volume • Your B inventory is comprised of 30% of the items in your inventory and makes up 15% of your annual sales volume • Your C inventory accounts for about 50% of the items in your inventory and makes up 5% of your annual sales volume A-B-C classification helps you prioritise restocking during the holidays. You should always stay on top of the A category’s inventory levels, but if you sell out of something in the C category during a seasonal rush, you have more wiggle room. It also helps you know what products to focus your marketing on - items in your A and B categories are apparently turning more heads in more valuable ways, so capitalise on that knowledge.

Plan ahead with sales data Getting your inventory sorted into categories means the sales data your ePOS is already gathering will be more actionable. When getting ready for the holidays, use that data to adjust your reorder points. A reorder point is exactly what it sounds like - the level of stock at

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which you need to reorder to ensure you don’t sell out of an item. Entering the holiday shopping season without these points set could mean selling out of a hot holiday product and being unable to restock in time. A study by Harvard Business Review found that 55% of consumers walked out when their desired product was out of stock, with a third of walk-outs heading to another retailer. Look to your ePOS for help here; the inventory data it’s gathering should be accessible in an analytics module that you can consult. You’ll need to know which products are selling best and how quickly to properly set reorder points. Look at your weeks of supply and stock turn for guidance. You can measure inventory levels in terms of time by examining your weeks of supply. This tells you how long you’ll have inventory on hand if the item continues to sell at the current rate, and it is important for keeping your shelves stocked. Your sweet spot here will vary depending

on your exact vertical, but seasonal retailers should look at having 10-12 weeks on hand. Stock turn will give you a more abstract, but still important, view of how quickly you need to restock products. The higher your turn, the more often you’re selling out and restocking. Like weeks of supply, your stock turn will vary depending on vertical - a luxury goods store may see stock turn of 1.5, while large discount retailers will turn at a much higher rate. Seasonal retailers should see a stock turn of once a season - four times a year.

Leverage sales data to optimise stock You’ve invested in your inventory - if you’ve got a product that isn’t selling out on the floor during the holidays, you’re losing money. Setting up unique product categories in your ePOS gives you insight about your inventory and what your

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customers are responding to. In addition to optimizing your restock points, in-depth sales reports that break down your data by day, week, month or year let you track sales trends to see which categories are selling the most so you can maximise your inventory’s ROI. Going into the holidays, take a look at the products you’ve sorted into your A category we mentioned earlier. Instead of relying on your gut instinct, try to remove any emotional attachment to your inventory and let your sales data dictate the makeup of your store. Identify your most profitable products, and double down on them. Based on historical sales data, stocking up on your top A products means having a steady supply of goods that have a high probability of selling. If you’re planning on selling any new seasonal products, think about stocking items that are related to or can be easily paired with your A-level inventory.

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“the holidays present you with marketing opportunities to get rid of old stock in ways that promote your store.”

Managing by margin will help you further optimise your holiday profits. Look to your ePOS for the relevant sales data; you’ll need to know an item’s cost and sell cost, which an ePOS system should be gathering and calculating for you. From there, focus on the A and B category inventory items that yield the highest profits. If a brand is performing particularly well, consider featuring it in your promotional materials and expanding your selection.

Get rid of inventory weighing you down Going into the holidays, you don’t want dead and dusty stock taking up space on your shelves. Knowing what they don’t want is just as important as knowing what they do. Even if you’ve got all the best-sellers and holiday hits on the floor, if your store is cluttered with old stock, you might lose out on sales as shoppers head somewhere more streamlined. Dusty stock doesn’t just take up store space - if you don’t have cash flow from your inventory, you have less to put back into ordering inventory that works

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or building marketing promotions that land. Stock that sits longer than six months drags you down, with a few exceptions for luxury ticket retailers. Look to your ePOS for help identifying old stock. If your ePOS has the right reporting capabilities, it may even be able to generate a dusty inventory report for you, cutting down on the time you’d need to look over months of sales reports. Once you’ve identified your old stock, you need to deal with it. Luckily, the holidays present you with marketing opportunities to get rid of old stock in ways that promote your store. You could: • Hold flash holiday sales and promote the dead stock as last-minute gifts or stocking stuffers • Run a donation campaign wherein items are donated to local charities as shoppers spend • Bundle stock that isn’t moving with best-sellers and promote tailored gift bundles

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“You’ve invested in your inventory – if you’ve got a product that isn’t selling out on the floor during the holidays, you’re losing money.”

Use your ePOS to set discounts Your inventory is categorised, and you’ve been looking over your sales data. You’re ready to sell your bells off this holiday season. If you’re working with an ePOS, optimising how you run your holiday sales should be simple. For many shoppers, holiday shopping means sales. It’s in your best interest to set the right sales; a study of shoppers found that 57% of discount code users would not have made a transaction if they hadn’t received a discount. Because you’ve done the work calculating your margins and organizing your inventory classification, you can set smart discounts. Look for items that:

A inventory by building gift bundles in your ePOS. Look to the ePOS’ reporting capabilities to find which products are often bought together as a jumping-off point. By promoting gift bundles in easy-to-see places in-store, you can encourage impulse buys and unsure shoppers. Don’t forget your online shop while you’re organizing your holiday promotions. Searching for discounts has become a regular part of the shopping process for 62% of shoppers, so don’t give them a reason to click away. Your eCommerce discounts might differ from your in-store promotions - consider offering free shipping online if you don’t usually.

• Have a relatively wide profit margin • Are selling well, but not like a super-star • Can be easily paired with other items Essentially, you should be focusing your discounts on your B category of inventory. For a one-two promotional punch, pair B and C inventory with

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“57% of discount code users would not have made a transaction if they hadn’t received a discount”

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Your all-in-one retail technology solution The most complete inventory management system, a connected online store, a personalized loyalty program, and a secure payment processing solution: you can have it all.

Kim from Things I Like Things I Love

Manage and grow your traffic Your inventory is the heart of your business. Once you’ve got your stock optimised, you’re free to focus on getting more foot traffic in the door.

An organised inventory also makes launching an eCom store simple. If you’ve already done the work to set up your categories and products, bringing in more customers could be as simple as adding an eCom integration to your ePOS and hit launch. Potential shoppers will expect you to have a presence online, so thinking of your physical location, online store and social media presence as one unified face of your business when building your holiday strategy will suit you well. You can save time on the back end with an integrated ePOS system that handles more than just sales.

Get found online Online shopping has become a fact of our lives. In 2018, at least four out of every ten purchases were made exclusively online, from research to purchase. Today’s reality is that your customers don’t think in terms of online and brick and mortar shopping anymore. Their world is omnichannel, and how they interact with your business is going to keep evolving. This is good news for retailers, because multichannel shoppers spend an average of three times more than single channel shoppers. Your local customers are online as well. Around 18% of local smartphone searches lead to a purchase within a

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day. Keep in mind that there are 5.6 billion daily Google searches; you have a lot of room to connect with local shoppers here. Listing your business on Google my Business gives you control over what people see when they Google you or find you on Google Maps. Verify and optimise the information and visuals on Google my Business and convert more searchers into shoppers by telling them your story. Your ePOS may have tools and integrations to give you an extra search engine boost as well. Lightspeed’s ePOS works with two partners that boost your chances of turning local searchers into online shoppers: NearSt and Pointy. Working with expert tools means you don’t have to waste valuable time - your inventory will do the work for you.

Showcase your business on social media If you’re doing the work to be found online, do you know what potential shoppers will be finding? They should be finding reviews, as displaying your reviews online can increase conversion rates by a whopping 270%. An impressive 86% of shoppers read reviews for local businesses, and 91% of them trust your online reviews as much as personal recommendations.

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“Reviews are social proof: your products are good, and your potential customers can take someone else’s word for it.”

When they’re making holiday shopping decisions, you want potential customers to seriously consider you. Leveraging your reviews as promotional efforts taps into the power of word of mouth marketing. Reviews are social proof: your products are good, and your potential customers can take someone else’s word for it. You can even use negative reviews for marketing; 89% of consumers read a business’s response to a bad review, so respond carefully and let them know you’re listening. Encouraging reviews, possibly through incentives like discounts, gives your business an easy source of usergenerated content. User-generated content is valuable on social media, because you’re showcasing the social proof that your shop is a smart stop. Potential consumers are more likely to believe people who aren’t on your payroll - they trust the authenticity. Once you have some user-generated content to work with, you can start building it into a comprehensive social

media strategy. Social media marketing can be intimidating, but if you keep the 60/30/10 rule in mind, building your strategy will be simple:

as an eCommerce platform that you can list products on to make sales without potential customers having to leave the site they’re on.

• 60% of your posts should be engaging, share-worthy content (blogs, product tips, demos, editorials, brand aesthetics and the like)

Instagram is a similarly important mini-hub for eCommerce, with 70% of shoppers using it to discover new products. Taking the time to step up shoppable posts widens your reach beyond your own eCommerce site.

• 30% of your posts should be curated content (influencer content, industry news, insider tips and user-generated content such as reviews) • 10% of your posts should actively promote you (products, sales and events) Managing your social media presence takes a little work, but with your ePOS streamlining your inventory management, you should have the time to stay active. Making the effort is worth your while; Facebook’s more than 2 billion monthly active users don’t just visit the site to talk to one another. Facebook doubles

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Work with influencers for holiday marketing Influencer marketing taps into the same feelings that user-generated content and reviews do, encouraging conversion by adding an air of social authority to promotional posts. During the holidays, you can utilise influencer marketing to promote all the work you’ve been doing to optimise your inventory. Influencer marketing is an investment likely to pay off. 40% of millennials believe their favourite influencer understands them more than their friends. That effect translates to results: the top 13% of businesses using influencer marketing are earning $20 for

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“The key to successful influencer marketing for many retail businesses isn’t working with the biggest names on the platforms, but rather with micro-influencers that carry weight in specific, local spheres.”

each $1 spent. Overall, 70% are earning $2 or more for each $1 spent - it’s worth a shot to see what kind of effect influencer marketing can have on your holiday sales. Don’t get intimidated by approaching influencers. The key to successful influencer marketing for many retail businesses isn’t working with the biggest names on the platforms, but rather with micro-influencers that carry weight in specific, local spheres. To make your holiday influencer campaign more impactful, work with the influencer to come up with a narrative. Consider having your chosen influencer showcase the product bundles you built with your ePOS.

Build a loyal customer base Building a loyalty program from your store helps you encourage shoppers to become regulars. After all, 75% of customers will return to a store after receiving an offer - what better way to ensure they see the offer than through an engaging loyalty program?

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Developing an app-based points and reward loyalty program is a customerpleasing way to encourage in-store traffic. 83% of customers are more likely to buy from a business that has a loyalty program, and 59% of customers prefer loyalty programs tied to smartphone apps. In addition to points and rewards, start crafting tailored email and SMS marketing promotions for your customers. Both channels are important - emails are a staple of digital marketing, and SMS messages have an 82% open rate. Careful, though: a lot of spammy SMS promotions will quickly turn a golden opportunity into a shut door. Turn to your ePOS for help here. Because your ePOS system should already be storing customer data, it may be primed and ready to help you craft promotional strategies, possibly through a loyalty program add-on.

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Case studies

How Brompton Bicycle gets ready for the holidays with Lightspeed The UKâ&#x20AC;&#x2122;s largest bike manufacturer, Brompton Bicycle, builds and designs their unique folding bikes in London. Conceived in 1975 by Andrew Ritchie, in a flat overlooking the Brompton Oratory, today Brompton Bicycle makes over 45,000 bikes per year. Every single Brompton bike is hand brazed, with R&D as well as testing, taking place in-house.

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Challenge

Solution

With clients pouring into its central London location, especially during the busy holiday season, Brompton Bicycle needed an ePOS with a smart inventory management system. They wanted to keep track of what their customers were buying, identify stock that wasn’t moving and manage this data in one place. Being a high-end retailer, “the Rolls Royce” of bikes, customer experience was also important. They needed a retail management system that would keep their queues down - allowing their staff to offer the highest level of customer service - and keep their workshop operating efficiently. Brompton Bicycle wanted to ensure they had the products their customers were looking for while providing a great experience during the holiday season.

They went with Lightspeed—the ePOS used in their New York store. Feedback from the London team was immediately positive. With Lightspeed’s unique inventory system, management could set custom reorder points, track unit costs and anticipate shopping trends. The data compiled by Lightspeed helped Brompton Bicycle get ready for the holiday rush. “We look at the data of last year and our sales figures, and try to identify any bestsellers that might be coming up,” says Assistant Store Manager, Eilis Keegan. “Without Lightspeed, we wouldn’t be able to maintain our very high level of customer service. Lightspeed is streamlined, super easy to use and makes life a lot easier!”

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Brompton Bicycle continues to grow with Lightspeed and take over the bike market with their unique folding bikes made for city life. Keegan is excited about what the future holds and is passionate about the brand. “Quality, heritage and fun - that’s what Brompton stands for.”

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Papillon Living gives customers more ways to shop for the holidays Walking through the doors of Papillon Living in Brighton is like stepping into a world of sensory pleasures. Flickering candles, exotic smells, contrasting colours and intriguing objects all work in harmony to create a truly unique shopping journey, worlds apart from the utilitarian feel of many retail environments.

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Challenge

Solution

With customers flocking to their retail boutique, Papillon Living owners Stephen Anderson and Andrew Allen were ready to make the leap to an online store. They understood their target market stretched beyond their store’s radius and they wanted to be wherever their customers were, especially during the holiday season. Specializing in gifts you’d want to keep yourself, Papillion Living was a popular store to visit for the perfect present. They wanted to give their customers more ways to buy, but they were only willing to expand online if their e-commerce solution was both easy-to-use and capable of providing a cohesive on-brand experience. They were concerned they’d be unable to replicate the sensory journey of their physical store - an experience for which they’d become famous.

Lightspeed’s integrated eCommerce platform was a perfect fit. Anderson and Allen synced their in-store ePOS to their new online store and have been delighted with the impact on their operations ever since. With a fully integrated system, they can manage their digital presence to reflect their brick-and-mortar and accommodate all of their customers. Papillon Living used Lightspeed’s eCom design templates to keep their online store on-brand and authentic. They’re able to deliver the same experience to shoppers worldwide that helped them achieve their success in-store. “Being able to sell 24/7, to us, has been a revelation,” says Andrew.

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For Papillon Living’s owners, customer satisfaction is the driving force behind their business. Their focus on delivering a unique overall experience, in-store and online, has helped them scale their small gift shop to what it is today; a thriving interior business that attracts customers and gift givers countrywide.

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Ask an expert: 7 of your top holiday questions, answered

Author: Lory Ajamian is the VP of Marketing at Lightspeed, the leading point of sale provider for independent retailers, online merchants, and restaurateurs. Graduating from McGill University with a degree in Mathematics and Statistics, Lory has a decade of experience in sales operations, data, and lead generation.

The holiday season is upon us, and it’s never too early to start getting ready. From choosing an ePOS to planning your inventory, there are many different angles to look at before the holiday rush hits. So we asked Lightspeed’s VP of Marketing, Lory Ajamian, to share some of her best tips and insights to help get you ready for your busiest season.

from sales reports with the help of your ePOS can be your best bet in understanding what you need to stock, how much you need to stock and even how to schedule your employees.

1. Which factors are most important when considering an ePOS system?

The shopping experience is not just online or offline, it’s an omnichannel experience. While there is definitely a shift towards online shopping, the shopper journey isn’t just about pressing “buy” on a computer. Customers are using a variety of channels to make their purchases, and they expect a seamless experience throughout. Customers are savvy and they expect personalized service that translates smoothly from offline to online.

Before going in and buying an ePOS, figure out what your specific needs are. Is mobility and flexibility important? Are you planning on adding a new location? Are analytics important to you? Do you offer services like appointment scheduling that require add-ons or integrations? All these factors are important to consider as you start your ePOS search. Finding a cloud-based ePOS with a strong support team is key. Remember, an ePOS is not just about using new technology, it’s about finding a business partner that will help make your life easier.

2. How important is data when preparing for the holiday season? Getting ready for the holidays means planning ahead. The best way you can do that is really understanding your products and what your customers been purchasing throughout the year. Pulling and understanding data

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3. How are shoppers’ habits changing, and what does this mean for retailers’ approaches to sales?

4. What tactics should retailers implement to maximise their holiday sales? The holidays are a busy and competitive time. In order to stand out, you need to have a strong marketing mix. The types of tactics will definitely depend on your customer base, but there are certain best practices all retailers should be following. First, you need to have a strong search engine optimization strategy. At the very least, customers should be able to find you easily online. Make

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it a priority to list your business on tools like Google my Business. Next is being active on social media—and that doesn’t mean being active on every social media channel. You just need to be where your customers are. Depending on the type of products you sell, you should also consider an influencer marketing campaign, this type of tactic and approach is growing more and more popular and important, especially in areas like clothing and fashion. Last but not least, start a loyalty program. A loyalty program will help motivate customers to come to you instead of your competitor and will help create a stronger relationship with your customers, that will last beyond the holiday season.

5. How should retailers handle underperforming stock in holiday season? Holidays are a time to think about your high performers and other potential big sellers. The name of the game? Making it easy for customers to find the products they’re looking for. Your first order of business is learning what those products are and being fully stocked. Using an ePOS can help you identify your high performing and underperforming stock and figure out what you should display. This doesn’t mean you should completely forget about your dusty stock. While you shouldn’t focus your

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marketing efforts on promoting these products, you could still have things like flash holiday sales to inspire last minute gifts or stocking stuffers, or even bundle stock. All-in-all there’s plenty you can do to move dusty stock to be able to focus on your high ticket items.

6. How important is an omnichannel approach, and how can smaller & independent retailers implement such an approach? In this day and age, if you’re running a business, your approach should be omnichannel. Customers are everywhere now, and shopping doesn’t just happen in store, or just online for that matter. An omnichannel approach is important because it allows you to be wherever your customers are and give them the same quality experience in every channel.

7. How can independent retailers

compete with the likes of Amazon on Black Friday? The best way to compete with competitors like Amazon on Black Friday is to be prepared! By pulling sales reports from your ePOS and understanding what your customers are looking for during those big days, you’ll be able to put a strategy in place well before the day comes. The best way to start? Go omnichannel strategy and target customers across different channels. Provide them with personalized content and a consistent experience, stay active on social and offer products they actually want (based on the data you’ve collected). Black Friday is the time to utilize all the tools you have at your disposal.

As a small business owner, this doesn’t need to mean a lot of money. It can be as simple as understanding the different channels your customers use. What platforms do they use on social media? Is your website mobile friendly? Is it easy to find your store on a search engine? By answering these questions and creating a consistent experience across all touchpoints you’ll be well on your way to providing a seamless omnichannel customer journey.

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About Lightspeed

Lightspeed (TSX: LSPD) is a cloud-based commerce platform powering small and medium-sized businesses in approximately 100 countries around the world.

With smart, scalable and dependable point of sale systems, itâ&#x20AC;&#x2122;s an all-in-one solution that helps restaurants and retailers sell across channels, manage operations, engage with consumers, accept payments and grow their business.

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Headquartered in MontrĂŠal, Canada, Lightspeed is trusted by favorite local businesses, where the community goes to shop and dine. Lightspeed has grown to over 800 employees, with offices in Canada, USA, Europe and Australia.

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Cash in this holiday season with the all-in-one ePOS ✓ Plug-and-play hardware Hassle-free hardware kits so you can start selling fast.

✓ Multi-location management Manage your store and open new ones without a hitch.

✓ Inventory management Use pre-loaded vendor catalogs to order inventory.

✓ Secure payments Accept any payment type and keep customer information safe.

✓ Advanced reporting Know exactly what customers want to buy.

✓ 24/7 support Get the help you need, whenever you need it.