Holiday Season Retail Playbook: Optimizing Inventory, Workflow and Fraud Protection

Retailers face immense opportunities and significant challenges heading into the holiday season. Put simply, the sales volume retailers see is typically far greater than the rest of the year, so preparations must be tight.

A successful holiday sales season requires thoughtful planning and strategic use of technology to optimize operations, manage inventory, and protect against fraud. For retailers, it’s crucial to properly train staff and leverage tools to stay competitive and meet customer expectations during the holiday rush.

1. Leverage data to anticipate customer demand.

The holiday season typically brings a surge in customer traffic and sales; failing to meet demand can lead to missed opportunities. Retailers must use data from previous holiday seasons to understand buying patterns and trends. Reviewing historical data and considering factors like consumer preferences, best-selling items and current trends can be a gold mine when planning inventory.

For example, a sudden increase in demand for custom-designed rings or luxury watches can signal where to focus inventory investments to avoid over- or understocking issues and employee time.

2. Connect in-store and online inventory systems.

With more customers shopping across multiple channels, having inventory systems and channels that aren’t integrated can result in missed sales, backorders or dissatisfied customers. In fact, online sales during the 2023 holiday season reached a record $222.1 billion, a 4.9 percent increase from the previous year. Synchronizing in-store and online inventory systems ensures that retailers can provide a seamless shopping experience, no matter where or how the customer is buying.

An integrated point-of-sale (POS) system allows retailers to monitor their entire inventory in real time, giving visibility into stock levels and inventory that is failing to move. This transparency is essential for managing orders, especially when consumer demand and holiday promotions drive higher sales volumes. For example, if a popular necklace is purchased online, the store’s overall inventory should immediately reflect this to prevent customers from ordering products that are out of stock. A unified inventory system also enables flexible fulfillment options like buy online, pick up in-store (BOPIS) or ship-from-store. This agility is key during the holidays, when customer expectations for convenience and speed are higher than ever.

3. Guard against fraud and payment risks.

The financial repercussions of fraud are immense — in the U.S. alone, credit card fraud losses are projected to exceed $12.5 billion within the next two years.

The holiday season is a peak time for these attempts, making it critical for retailers to implement robust payment security and fraud management strategies. Jewelry, for example, is a high-value product that is easy to resell, which can make it an ideal target for bad actors.

It’s essential that retailers are aware of common types of fraud, including unauthorized payment fraud (e.g., stolen payment details), overpayment fraud (when customers overpay and request refunds through alternate methods), friendly fraud (when legitimate purchases are disputed as unauthorized) and card present fraud (the use of stolen or counterfeit cards in-store), so they can implement effective fraud prevention strategies.

One way retailers can prevent fraud is by ensuring that they use technologies that support secure payment methods, such as EMV chip cards and mobile payments that offer extra layers of protection against counterfeit transactions. In addition, fraud detection tools, such as those within a POS system, can monitor for suspicious activity and flag transactions that fall outside normal patterns, such as high-ticket purchases or multiple transactions in rapid succession.

Training staff to spot fraud is equally important. Employees should recognize tactics like social engineering, fake IDs and unusually large orders. Verifying identity is also important, especially when handling online orders that are picked up in person or processing refunds and exchanges. With the surge in holiday sales and returns, implementing verification steps and limiting cash refunds can help protect against losses.

Polishing Retail Operations for the Holiday Season

Fine-tuning your retail operations to meet increased demand while also safeguarding the business is an important part of holiday preparation. By utilizing data-driven insights, synchronizing inventory across channels, and implementing strong fraud prevention strategies, retailers can deliver top-tier customer experiences while protecting their bottom line.

Nick Gurney is the general manager of Jewel360, the cloud-based point-of-sale system designed for leading jewelry retailers.