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12 Ways to Prepare Your Small Business for Holiday Sales

12 Ways to Prepare Your Small Business for Holiday Sales
Credit: Pixelbliss/Shutterstock

It's easy for small businesses owners to feel overshadowed during the holidays by the extreme deals and flashy adverts offered by big box stores, but a wave of interest in shopping local and supporting homegrown enterprises is helping small businesses thrive.

In fact, 94 percent of consumers value the contributions small businesses make to their communities and 83 percent plan to do at least a portion of their holiday shopping at small, independently owned retailers or restaurants, according to a recent survey. Small businesses that find ways to capitalize on this goodwill will secure their fair share of the $720 billion in retail sales expected this holiday season. 

Though there is no one-size-fits-all approach to preparing a retail operation – whether ecommerce or brick-and-mortar – for an influx of business during the holidays, a blend of time-tested, common-sense steps and innovative approaches can help small businesses take on the holiday sales rush.

Here are 12 key steps that business experts and experienced owners agree can help small businesses get the most out of the holiday season.

Planning is ongoing for every business, but preparation for the busiest shopping time of the year should include a detailed review of last year's holiday sales performance. This information can be used to determine inventory, tailor deals, create promotional offers and set revenue goals for the season.

"Make sure that the goals you set for yourself are reasonable and attainable," said Stefan Lewinger, founder and CEO of Sock Fancy.

He also reminds fellow business owners that they don't have to define their goals solely on revenue: "Other metrics, like customer engagement and social media following, are ... great tools to measure your success."

Alex Tran, marketing specialist with Hollingsworth, recommends using analytics to manage, distill and interpret all the information you need to shape your business goals for the holiday season.

"There is software that tracks POS, inventory, etc., and can help you forecast what your business needs to succeed," explained Tran. "Without data, you will not be able to make informed decisions."

Also, spend some time researching the holiday sales strategies of your top competitors and determining the marketing approaches you will use to reach your target customer. Lewinger suggests getting your products included in holiday gift guides or "best of" lists. 

During the holidays, it may be necessary to have more funds readily available to increase inventory, hire seasonal staff or set-up holiday displays. 

"If pre-holiday business has been slow or you otherwise don't have sufficient cash on-hand to give the season your very best shot, talk to your banker or local community lender about securing a line of credit or short-term loan," said Paola Garcia, a small business advisor at Excelsior Growth Fund.

According to Garcia, many lenders have reasonable interest rates and repayment terms, and quick turnarounds from approval to funding. However, business owners should shop around and be vigilant of predatory lenders.

"Be sure that you know what you're signing up for before you agree to any loans or lines of credit," advises Garcia.

Additionally, business owners should reach out to their payment processor to discuss a potential increase in transaction volume or negotiate a higher credit limit, if necessary. Most small businesses have credit processing limits written into their merchant account contracts, according to Geoffrey Scott, a payments consultant for Motile.

"While seasonal fluctuations are taken into account, to an extent, by your processor, a huge spike could potentially freeze your ability to process credit cards during the busiest time of the year," said Scott. "The onus is on you to begin this process – don't expect them to bestow any early holiday gifts without prompting." 

You need to make sure your technology is ready and able to handle the onslaught of holiday shoppers. You don't want to lose potential customers because your website is down or you can't process credit card orders. This means taking the time earlier in the year to upgrade security software, test checkout and payment processes, check the usability of search functions, and make sure your website is user-friendly and able to handle an increase in traffic.

"Small businesses need to ensure that all channels – whether in-store, online or mobile – are all up to date and running smoothly," said Chris Francis, vice president of market development at Worldpay. "They must run the necessary tests and evaluations to ensure their technology is working properly, and to avoid any bugs or malfunctions from losing sales."

One of the most prominent trends impacting holiday sales is omnichannel retailing, which is defined as an integrated sales approach that creates a seamless shopping experience for customers regardless of whether they are shopping from a desktop, mobile device or store. For example, these customers may buy online but pick up the item in the store, or they may use a smartphone app to compare prices and then make a purchase through a company's website.

"By embracing all available sales channels, small businesses can enjoy increased sales during the holiday season," said Francis. 

According to Francis, omnichannel shoppers are more likely to return to make additional purchases and to recommend brands to family and friends, so you'll want to not only increase contact with their customers, but increase the value of that contact, too.

One way businesses can be responsive to omnichannel shoppers is by honoring online coupons and in-store deals interchangeably.

"Make sure that all of [your holiday deals] are scannable for your in-store sales," said Mike Catania, CTO and founder of PromotionCode.org.

There is nothing worse than running out of the must-have gift and having to turn away customers. Therefore, make sure you are fully stocked and have plenty of your best sellers readily available. 

"Stock up on your most popular items, the latest trends in your industry and specially branded or crafted gifts that make your merchandise stand out," said Garcia. "Talk to vendors and see if you can get discounts for buying in larger quantities or extended payment terms."

According to Amit Mathradas, general manager and head of Small Business North America for PayPal, there has been disproportionate holiday shopping growth from online channels. According to Deloitte's retail holiday sales forecast, overall e-commerce sales will grow by 17 to 22 percent from last year's shopping season, with online sales accounting for 57 percent of all purchases.

Establishing an online store is imperative for all small businesses interested in capturing this ever-growing segment of the holiday market. It's a great way to show off your holiday specials, showcase unique products and build community with your customer base. Don't fret if you don't have time to get your entire inventory online before the holiday rush, though.

"Make a small selection of what you feel will be hot this holiday season and offer those items up for online purchase and shipping to the customer's front door," said Christopher Mohs, vice president of strategy and operations at Cora + Krist.

To further capitalize on the growth of online business, Mathradas recommends merchants focus on reducing shopping-cart abandonment (adding items to a virtual shopping cart but not completing the purchase), particularly on mobile devices.

"Online sales and an emphasis on mobile are categorical imperatives," he said. "A site not rendering properly on a mobile device, or any hiccups in payment processing, can cause a ripple effect in terms of lost sales."

Acquiring new customers always requires more time and money than getting repeat customers to come back, and this is especially true during the holiday season. You can encourage existing customers to make holiday purchases by engaging them with exclusive online offers, in-store events and personalized discounts and promotions.

"Based on their past buying history, you already know exactly what will appeal to them most and can create personalized campaigns that will convert them [into repeat customers], " said Jurgen Nebelung, vice president of e-commerce and digital at Tea Forte. "Loyal customers spend on average 67 percent more than new customers."

Use tools such as search engines and social media so your customers can find you and stay informed about your products and services when they are ready to buy, Mathradas said.

"Look at every way to build your digital brand, from posting on Instagram to taking out cost-effective ads on social media networks, like Facebook, that can boost online visibility and keep your business front-of-mind for target audiences," added Garcia. 

She also suggests that if you have an email list, you should send weekly updates that highlight new merchandise and other specials. Other opportunities for interacting with prospective customers include responding to comments and reviews of your business, developing targeted promotional campaigns, and creating Pinterest boards centered around gift giving ideas or themes.

"Investing in search terms via Google ensures that you are easily found by customers looking for similar products," noted Mathradas. "This is especially critical for [niche] businesses ... to target the right customer as they follow the path to purchase."

During this high-stress time of year, businesses should perfect the customer experience. For traditional brick-and-mortar retailers, this can be as simple as extending your hours for the holiday said Nebelung. For online brands, you'll want to have your customer support team on-call and ready to address any customer complaints at a moment's notice.

"Using your deep understanding of your customers, you can create an enjoyable and hassle-free customer journey, from browsing to check-out to returns," Nebelung added.

You can distinguish yourself from your competitors and win the hearts of last-minute shoppers if you can offer free shipping or quick delivery.

"Free shipping raises the perceived value of your product and simultaneously lowers buyer friction," said Augustin Kennady, media relations director for ShipMonk.

Businesses that ship a large amount of items may want to consider outsourcing this function.

"Some companies that ship 500+ packages a month can outsource their shipping and warehousing operations to a third-party logistics company," said Tran. "There are companies who tailor plans that work for businesses of any size."  

But even businesses that operate on a smaller scale can find ways to improve their delivery options. For example, some may offer a local delivery service that caters to their immediate community, or they can tap into the resources offered by e-commerce giants.

"If customers place orders on our site and we can't ship it fast enough to meet a holiday delivery date, we will drive them through to our Amazon store to leverage Prime's fast shipping," explained Nebelung.

Additionally, brick-and-mortar retailers worried about online sales eclipsing their foot traffic this holiday season can offer an in-store-pickup option for online purchases. Customers save on shipping costs and retailers gain more in-store foot traffic, which may lead to additional sales.

One of the most important ways small businesses can stand out and draw in customers during the holidays is by creating events that highlight their unique products and connection to the local community. They also can offer exclusive customer experiences that can't be easily duplicated by large retailers.

"A fun event or pop-up shop is a sure way to draw in your customers during the holidays. You can offer a special in-store consultation from the experts, or even something as simple as wine and cheese while you shop," said Nebelung.

A few other ways to draw in customers include offering free lessons and product workshops, curating gift boxes that highlight a variety of your products, partnering with other small businesses in the area to host joint events, and even garnering positive press by forging relationships with charities in your city.

You can also build your brand by getting involved in your local business district or Chamber of Commerce, according to Garcia.

"Take part in any Main Street shopping district special events," she said. "Some areas also have season-long events that provide a wealth of marketing and brand-building opportunities."

How you interact with shoppers after the holidays will leave a lasting impact and help determine if they become repeat customers. Lewinger advises finding ways to maintain the momentum of the holiday season well into the new year. Use this time to streamline the process for handling returns as well as develop a strategy for encouraging customers with returns to use their time in your business to make additional purchases.

"Find ways to engage with the new customers you made over the holidays as well as reaching out to other potential customers," said Lewinger. "Planning for the post-holiday season can be just as important to make sure you can hop right back into regular sales once the holiday rush comes to an end."

Additional reporting by Nicole Fallon. Some source interviews were conducted for a previous version of this article.

Paula Fernandes

Paula is a New Jersey-based writer with a Bachelor's degree in English and a Master's degree in Education. She spent nearly a decade working in education, primarily as the director of a college's service-learning and community outreach center. Her prior experience includes stints in corporate communications, publishing, and public relations for non-profits. Reach her by email.