Seasonal Planning: Three Tips to Survive and Profit From the Holiday Season

By Robert Coon

As the holiday season approaches you’re no doubt battening down the hatches for the season that is both the bane and blessing of every business. According to the National Retail Federation, one-fifth of all U.S. retail sales are holiday sales and with a 5 percent increase expected in 2006, it’s sure to be a busy time for any catalog business. It’s in this pre-holiday calm before the storm that planning, creativity and smart investments will help you get the most out of the season. Here are three tips to help multichannel merchants do just that:

1. Cut down on undeliverables. Whether it’s crazed online shoppers incorrectly entering their addresses or call center representatives (CSRs) miskeying zip codes, with carriers charging up to $10 per address correction, the cost of an incorrect address can negatively impact margins. Consider investing in an address correction service for your order processing and shipping systems.

2. Review the handling of backorders. Higher demand creates more backorders, but taking the time before the holiday rush to review standard operating procedures can prevent lost sales. Does your order entry software and e-commerce site cross-list enough merchandise to offer the customer alternatives to their original choice? If your CSR has only one alternative to offer a customer, you run the risk losing a sale because the alternative is back-ordered as well. Be prepared with incentives for customers to wait on a back-ordered item. A supply of goodwill items or a discount for future orders could ease the pain of waiting for that special holiday gift.

3. Use e-mail or direct mail campaigns to encourage early orders. Use demographic and order history information from your database to choose featured holiday gifts and create targeted mailing lists. Encouraging customers to order early can help avoid last minute shopping pitfalls like shipping delays, back-ordered items and longer wait times in the contact center. Getting ahead of the game can save you money in lost sales and even keep your seasonal hire costs in line.

Robert Coon is the President of Dydacomp (http://www.dydacomp.com), the Totowa, N.J.-based developer of Mail Order Manager (M.O.M.) software.