How To Efficiently Shop For The Holiday Season – Retail Philosophy
Published on 21 Nov 2022
With American Thanksgiving happening in a couple of days, the start of the holiday shopping season and the craziest time of year means only one thing; BLACK FRIDAY DEALS ARE UPON US! Have you started your holiday shopping yet? Maybe you have, perhaps you’re like the rest of us and haven’t even thought about holiday shopping. That’s ok because there’s a lot to do to make your holidays grand. If you read part one of this blog series, How to efficiently shop for the holiday season – Useful Apps, you’re on track to mitigating your household debt this holiday season. Part two of our How to Efficiently Shop for the Holiday Season series will focus on Retail Philosophy, how you can get into retailers’ minds and take advantage of all the holiday sales, ultimately saving you money this holiday season!
The Retail Mindset
To maximize your savings this holiday season, we first need to discuss retailers’ mindsets and understand why they have sales and promotions. The purpose of retail is to make sales, lots and lots of sales. Retail, specifically retail for clothing, runs on two separate seasons and store shelves need to be cleared of last season’s products to make room for the incoming inventory. Not only do you receive discounts and savings on great styles and fashions, but retailers make room for incoming inventory to keep growing their sales.
From a business and planning perspective, retail is always trying to grow and increase its merchandise productivity, which means the sales cadence and calendar are almost identical to the previous year. If a net new sale or new promotion is successful, retailers will be inclined to run the same sale with possible adjustments around the same timeframe; sales and promotions are cyclical, making them predictable.
However, there are exceptions to this. Covid-19 disrupted the entire business of retail’s sales cadence as brick-and-mortar stores were shut down for the majority of 2020 and 2021. Many retailers had to adapt to the changing environment. When Covid-19 shut down the world, there was already inventory in transit to Canada (international imports of merchandise take between 3-4 weeks to arrive at their final destination). This resulted in an overflow of inventory hitting retail brands with no storefronts to sell. Eventually, these items were sold at discounted prices to make back the initial investment. With brick-and-mortar stores closed to the public, there was a massive shift and investment into e-commerce. While e-commerce has been an avenue serving as a “digital storefront” the growth was unprecedented. According to Digital Commerce 360, in 2020, there was a 24% year-over-year increase in e-commerce sales, reaching almost $4.3 trillion!
In 2021 Covid-19 unexpectedly disrupted retail sales again. As the world started to reopen country by country, many countries in the east were still impacted and locked down. This meant that manufacturing and production were still at a standstill, causing delays and cost increases in freight and international logistics. As a result of these supply chain issues, retailers struggled to receive merchandise, leading them to protect their stock levels and breaking their sales cadence for the first time in recent years: no inventory = no sales = no revenue. With supply chain issues easing, we’ll start seeing the sales cadence return to some level of normalcy.
Fall and Winter Sales
Fall carries the broadest range of products with fall transactional styles (t-shirts, light pants) and true fall styles (denim, knits, sweaters and outerwear). Fall and winter is the most significant season across most retailers as transactional fall styles are ready to be on the sales floor by the end of July, with true fall items arriving at the beginning of September and the last of the fall deliveries arriving before the middle of October. As transactional fall styles start to show up in stores, retailers need to clear out the storage and floor areas of spring/summer inventory. In Canada, we have to deal with lovely winter and with that comes significantly thicker outerwear to help battle the harsh elements. The Canadian chill usually starts at the end of September, so these styles must show up before mid-October.
Most retailers usually create a sense of demand with a middle-of-season sale where only select items (such as transitional fall) and less productive items (slow sales) are advertised on sale. These sales will remove slow inventory and make room for the remaining deliveries.
There is another curve ball for fall sales, Black Friday. Americans love their Black Friday, and so do Canadians; everyone loves a good deal! With the recent growth in e-commerce, retailers have started incorporating Black Friday into their purchasing, planning and logistics operating procedures. With the out-of-ordinary influx of customers on Black Friday and Cyber Monday, retailers need to keep enough inventory on hand to support those sales and have enough inventory for December and Boxing Day. Black Friday generally has the same sales as Boxing Week; in recent years, many retailers have opted to run their Black Friday sales over a duration of weeks rather than a single day to control overcrowding and social distancing. In contrast, the difference for Boxing Week is inventory levels and an assortment of sizing, not pricing. In Canada, Black Friday has become bigger and better than Boxing Week.
To save money this holiday season:
- Buy all your gifts and holiday needs during Black Friday.
- Buy everything during boxing week if you’re seeing your family and friends in the new year to make up for holiday celebrations.
- Stock your fall basics for 2023 during those mid-season and Black Friday sales. A pair of black boots and a plain grey sweater never go out of style.
As we enter the holiday season, monitor your favourite retailers and look back on last year’s sales, as they’ll be a good indicator of what sales you’ll see this year. Retailers will promote their sales via emails, so check your inbox and junk box for all the saving opportunities! Along with email, retailers will promote their sales on social media and, through digital advertising, keep your eyes peeled. If you aren’t connected to your phone or subscribed to mailing lists, check out platforms like Milled.com. Similar to Paypal Honey (check them out in our last blog), Milled.com complies retailers’ promo emails into a searchable database that you can take advantage of. Their database will also give you a better understanding of what sales are coming in the future, allowing you to plan your holiday festivities, shop this holiday season efficiently and ultimately mitigate your household debt from growing this holiday season.
With the holiday season fast approaching, there is no better time to set up your holiday shopping list and start saving on your gifts and essentials. Understanding the retail philosophy and the reasoning behind these sales will help you get everything you need to be a holiday superstar. Check out part one of this series to effectively save on groceries and minimize the increase in household debt this holiday season.
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