BY REBECCA DECZYNSKI, STAFF REPORTER, INC./ www.inc.com / August 26th, 2022
Inflation is leading customers to buy early to get the best deals. Businesses should be prepared to help them get what they want.
Summer hasn't yet officially ended, but that's not stopping shoppers from getting started on their holiday shopping earlier than ever.
Inflation is driving 37 percent of customers to buy holiday gifts earlier this year, a survey by Salesforce revealed in June. And big businesses are responding: Just before Labor Day, Walmart released its annual top toy list a month earlier than it did last year, Axios reported. Sometime in the fourth quarter of this year, Amazon will hold a second Prime Day event, which it calls Prime Fall in a memo acquired by CNBC.
While customers typically do the majority of their holiday shopping closer to Black Friday and Cyber Monday, that may not be the case this year, says Mark Cohen, director of retail studies at Columbia Business School. Not only is inflation driving a fear among shoppers that prices may increase closer to the December holidays, but lingering supply chain issues raise concerns about shelves being adequately stocked in the next three months, he says: "Everybody's got a variety of motivations to to shop early."
So, it's in a business's best interest to make sure customers can do their holiday shopping early. That means making gifting items available as soon as possible. "I would set up right now, but be careful you don't set out the Christmas trees, too," Mark Cohen says. Even if customers have started holiday shopping, they are likely to grow irritated by such an overt, premature push to the holiday season.
And as for prices? It's not the time to push sales and price markdowns, Mark Cohen says, but it is a good idea to sell inventory early, because selling later will likely be more expensive due to inflation. Plus, adds Marshal Cohen, chief retail adviser at the global market research company NPD Group, you want to reach customers before they've hit their budget. For this reason, he adds that promoting layaway options may be a good idea for some businesses.
You'll also want to take a look at any existing return policies you offer, NPD's Cohen says: If you have a 30-day return policy, consider extending it to accommodate gift returns post-holidays. "Ease of returns is such an important thing," he says.
For small businesses, staying competitive with giants like Amazon and Walmart will remain as challenging as it ever was--but they can keep up, as long as they play to their strengths. That means maintaining strong customer service, keeping inventory levels up, and understanding customers' wants. "Now is not the time to breathe a sigh of relief and not begin your holiday hiring," Cohen from Columbia says. "It's not a good idea to step back and say, 'Things are back to normal.'"
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