Ready to dive into the topic of preparing your retail business for the holiday season?
Now, you might be wondering, why are we discussing holiday shopping in the middle of May? Shouldn’t we be focused on getting through the last month of school and planning summer holidays? Well, as our guest, Shashi Behl, Owner & Founder of Joydrop, reveals, the holiday season holds immense significance for retail businesses, with a staggering 40% of their annual revenue generated in just six weeks. It’s a time when retailers need to be proactive and start their preparations as early as May, if not earlier. In the dynamic world of retail, efficient inventory management and effective pricing strategies are crucial for business success. Join us as we explore the conversation and gain knowledge that can help entrepreneurs navigate the challenges of inventory management and pricing in the retail industry.
Shashi, a passionate retailer herself, shares her insights and experiences in this episode. She loves the intricate details of retail and finds joy in witnessing the psychology behind a successful transaction. It’s that moment when a customer finds the perfect gift or item and their face lights up with satisfaction. As Shashi points out, retail engages all our senses, making it a fascinating journey that requires attentiveness and adaptability.
Despite the challenges faced by the retail sector in the past couple of years, Shashi highlights the positive takeaways and the importance of getting comfortable with the uncomfortable. The sudden halt in sales during the pandemic forced retailers to rethink their business strategies. Shashi, like many others, faced a period of discomfort but swiftly embraced the situation. She recognized the need to let go of preconceived notions and adapt to the ever-changing landscape. Setting short-term goals and focusing on controllable factors allowed her to navigate through uncertain times and find new opportunities.
Inventory Management for Growing Businesses
Managing a large inventory, especially in a constantly evolving market, presents unique challenges. Shashi shared her approach to inventory management in her own retail business, Joydrop. To make the task more manageable, she organizes her inventory into twelve departments. This categorization allows her to focus on specific areas and make informed decisions. By analyzing previous sales data and budgeting accordingly, she can plan purchases effectively.
The Open-to-Buy Approach
To further streamline inventory management, Shashi highlighted the usefulness of an Open-to-Buy system. Open-to-Buy is a tool that leverages historical data, budgeting, and planning to assist retailers in making informed purchasing decisions. It provides a structured approach to ensure that businesses maintain optimal inventory levels while factoring in cash flow, delivery times, and market trends.
Pricing for Profit
With the current economic challenges, including rising shipping rates and inflation, pricing decisions have become more crucial than ever. Shashi emphasizes the importance of approaching pricing dynamically and without emotional attachment to money. She highlights that profit is not a dirty word but rather a means to build a solid business and contribute positively to the community. Shashi delves into the top-down model, focusing on finding the balance between increasing prices and reducing expenses. She also underscores the significance of actively engaging with the team, encouraging collaborative discussions, and listening to their innovative ideas.
“Don’t price just based on breaking even, you’re pricing for a profit.” – Shashi Behl
The Changing Landscape of Marketing
Sales, inventory, and pricing strategies are essential elements of any successful retail business. But what about marketing strategies? Marketing strategies have seen remarkable transformations in recent years. With the emergence of new platforms and technologies, reaching and engaging consumers requires constant adaptation. Shashi highlighted the importance of staying up to date with evolving marketing practices and platforms. From malls to social media, the way businesses execute their marketing plans has significantly changed.
Understanding the Difference: Marketing vs. Branding
During our conversation, an important distinction was made between marketing and branding. While the terms are often used interchangeably, they represent different aspects of a business’s identity. Branding encompasses the core values and DNA of a business, reflecting its unique identity and message. On the other hand, marketing involves choosing the right channels and tactics to effectively communicate that brand message to the target audience. Shashi emphasized the significance of consistency in branding, messaging, packaging, and delivery. Regardless of the platform or medium used, the core values and brand identity should remain consistent.
Utilizing Resources and Networks
Don’t forget about the importance of utilizing resources and networks in the retail industry. Joining retail associations, such as the Retail Council of Canada, provides access to valuable industry information, networking opportunities, and cost-saving alliances with credit cards and shippers. Additionally, seeking out small business retail groups and connecting with fellow entrepreneurs can offer support, insights, and potential collaborations.
Embracing Face-to-Face Interactions
While digital marketing has its merits, face-to-face interactions remain a powerful tool. Meeting people where they are, engaging in conversations, and building relationships are invaluable aspects of marketing. Entrepreneurs should not underestimate the value of personal connections in establishing trust and fostering customer loyalty.
Getting your retail business ready for the holiday season is no small feat, as Shashi Behl reveals. With a substantial portion of annual revenue generated during this critical period, retailers need to be proactive and begin their preparations early. Shashi’s invaluable insights on efficient inventory management, effective pricing strategies, and adapting to the ever-evolving retail landscape can give you the competitive edge you need to thrive this upcoming holiday season. By incorporating these strategies into your business plan, you’ll be well-equipped to navigate the challenges of inventory and pricing, and make the most of this lucrative time for retailers.
