When Should You Prepare Your Store for Christmas Inventory?

Christmas brings a peak season for many businesses across various industries. From online stores to supermarkets, clothing stores, gift shops, discount stores, warehouses, chocolatiers, automotive stores, and a lot more – almost all businesses tend to see a significant impact, and it’s hard to think of businesses that don’t. However, businesses often stock up too little or too much for too short or too long a duration during the season. What we present here is a simple and practical guide that can help your business understand when the right time is for you to stock your store for Christmas. And yes, as we explain, the information shall also help you estimate the quantities. For further reading related to that, there’s a link to a well-written article that we share with you!


Christmas Loans

Do You Have Historical Data?

Historical data can be of great help as an accurate indicator of trends for your business. After all, every business is unique, and often, trends tend to have a pattern. Yes, each year is also unique. If your business model hasn’t changed significantly, historical data can be an invaluable tool for making decisions about whether to stock your store for Christmas. Forecasting is often efficient using current market data in combination with historical market data and historical data of one’s own business.

Indicators like: previous years’ sales and market performance, and year-on-year growth, can be used to create an estimate for the current year’s forecasts of the Christmas season. Accordingly, inventory and duration of promotional sales will be in need to support sales.

Your Industry is a Key Factor

This is one of the significant factors to understand. The industry in which your business operates plays a crucial role in how Christmas impacts the business. Specific industries like clothing, logistics, gift, stationery, etc., see a sharp rise, while industries like adventure sports, education, etc., see a slowdown. Not to forget, industries like nightlife, entertainment, and banking can see varying trends from business-to-business and year to year depending upon numerous factors.

Understanding your industry, and the impact of Christmas can help you know how best to respond to the decision. It leads to a decision on whether to stock your store for Christmas is needed or not. By taking advantage of the trends, consumer behavior, and seasonality, businesses can enhance their focus on sales and marketing. They can drive sales of the right items to the right consumers during various seasons.

The 80-20 Rule

If trends across the market are to be spoken about, the 80-20 rule is strongly valid for Christmas sales. Study the data and trends related to Christmas sales across the US, and it becomes easy to see two trends:

    1. Close to 80% of the increased sales of most stores and businesses come from close to 20% of the items sold
    2. Close to 80% of the increased sales tend to go from close to 20% of the average promotional period

But why is this data useful? Stocking up is not a one-time activity. The data helps to understand whether to stock your store for Christmas is a good decision or not.

Suppose your business was to utilize this data effectively. In that case, all that would need to be done to get it right is that an estimated 20% of the added inventory would need to be stocked up in the earlier days of the promotional period. After that, the increase in sales, the trends of demands for various items, etc., can be tracked. Knowing that the peak days could see roughly four times the sales in a quarter of the number of days. This data should help you decipher better estimates of what to stock for the true peak days. 

Other Factors to Consider

There are a few other factors that can help your business to respond on stocking for Christmas:

  1. Competition: One factor that is very hard to ignore is competition. Analyzing competitor responses to the season can help your business get ideas, forecasting, and focus points to work on. 
  2. Trends: A trend in business is often considered a friend, and thanks to the strong impact of social media today, trends are stronger and more significant than ever before. It’s unwise to ignore trends that may eventually leave a huge impact during festive seasons.
  3. The Economy: This is a strong external factor that significantly impacts the non-essential expenditure of the average buyer. Global, federal, and state economic health substantially affect the average household’s Christmas expenses. Depending on what markets you cater to, a slowdown or an uptrend can significantly impact your business’ performance.
  4. City Events: December may not be just about Christmas – a lot of big events come up during the season and depending upon which city your business is catering to, any major event in the city may impact your business, and such factors also need to be considered while taking decisions about stocking your store.
  5. Your marketing strategy: As much an impact as external factors may have, internal factors, including your marketing strategy, may have the potential to unlock significant opportunities and may also have the potential to impact business far beyond what any external factors may have.
  6. Your sales efforts: Your sales are likely to be the ultimate factor that shall result in the outcome that the season holds for you.

Need Financial Help? Get an Inventory Loan for Christmas

Stores forecasting/expecting a huge demand increase during Christmas often use loans to stock up for the season. We at BusinessCapitalUSA are an alternative lender offering a simplified and quick solution for funding. What more? We accept Christmas business loan requests from bad credit businesses and business owners! Choose us to get a quick loan for Christmas that gives you the cash boost that adding inventories for the season may require. You can also use the funds to drive your marketing strategy and enhance your sales efforts. We are here to provide financing to make the best out of the season. Business Capital USA wishes you a strong season ahead and a Merry Christmas!

Further Reading

Statista – US Christmas Season Data

Forbes – How Much Stock to Order for Christmas