From Thanksgiving through early January, most retailers focus on little besides keeping the shelves filled and getting customers what they want. It's a busy time that can make you forget that in January, things will slow down.
How slow business gets depends on the industry. In my days running a huge, independent toy store, we went from having six-figure days in December to having weeks that barely cracked $25,000 in January.
It's not fun, but in most industries, it's a reality. Nothing I could do as the manager of the toy store could make January's demand approach December's. What I could do was manage our business knowing that the slowdown was coming. Here are five ways how:
The retail business slows down for most companies in January. Image source: Getty Images.
1. Adjust staffing
In December, our staff more than doubled in size. Some of those workers were college kids who went back to school. In other cases, hours were filled by having part-timers work more hours.
As business slowed, I had to lower our staffing levels accordingly. Even though this should have been expected, many part-timers hoped to keep at least some of their extra hours. In most cases, I could not make that happen and had to have a lot of uncomfortable discussions.
2. Adjust inventories
Clearly, most businesses need less inventory once the holiday season ends. In many cases, you also need different inventory. At the toy store, for example, we sold a lot of under-$10 stocking stuffers in December. In January, that market mostly dried up and we had to adjust to a different type of clientele.
In general, our weekday January audience shifted to older men who shopped in our model department, with families becoming mostly weekend customers. We adjusted for that by making some different purchases and keeping a close eye on our budget.
3. Adjust hours
During the holiday season, we increased our hours significantly. Once the season ended, we not only reverted to our normal operating hours -- we actually shaved some hours off the schedule in certain departments. This is a bit of a tightrope act: You still have to serve your customers, but you can generally trim how long you're open as long as it's communicated to them.
4. Hold special events
Consumers may not be thinking about your business in January, so give them a reason to come in. This could be as simple as an invitation-only sale for regular customers or as complicated as holding a class or bringing in some other sort of draw.
At the toy store, we held Lego building events. learn-to-play gaming tutorials, art classes, origami lessons, and whatever else we could think of. It was about giving customers a reason to visit and making sure our business remained in people's thoughts even when it wasn't our high season.
5. Leverage loyal customers
Hopefully, you have a robust email list and/or a healthy social media presence. Engage with your most connected customers and give them reasons to visit. You might, for example, offer some excess holiday inventory at a deal price only to a select group of customers, or you may consider having events just for your social media followers.
This above all: Be realistic
The most important thing is to acknowledge that a different season is coming and make the needed changes. If you take too long to adjust, you can put your company in a hole that's hard to get out of. Make the tough calls now in order to ensure that you'll be on solid ground when business picks up again.
