Over the last few years, times have been particularly tough for the retail industry. The fallout from the global financial crisis of 2008 – and the subsequent recession which followed it – hit retailers hard, with a number of major retail chains failing altogether. However, the factors which affect the retail industry are more than just economic. In fact, seasonal factors – or seasonality, as it’s usually referred to within the industry – can either boost or hamper retail sales depending on the weather conditions and the time of year. Maintaining profitability through periods of inclement weather can be difficult, but retailers must be prepared to deal with it when it comes.
Bad weather and retail sales
Bad weather is hardly an unknown phenomenon in Britain, so retailers which fail to take this risk into account are almost certainly condemning themselves to failure. Clearly, prolonged periods of wet or wintry weather are likely to deter shoppers from hitting the high street. You might think, therefore, that sunny weather will have the opposite effect. This may be true in some cases, but long spells of hot weather can also put people off going out to shop – and this is because many of them will find better things to do with their time. It’s not just bad weather, therefore, that can have an adverse effect on retail sales. Retailers must take this into account.
Seasonality and labour availability
The availability of labour can also fluctuate depending on seasonal factors. For instance, many if not most retailers will look to recruit additional labour over the Christmas period, when demand for retail goods tends to be at its most intense. However, given that the competition for labour is also intense over the peak festive season, retailers that fail to plan ahead properly run the risk of falling victim to labour shortages just at the time when that labour is most needed. This can, in turn, put considerable stress on strain on managers trying to run those retail firms affected.
Planning is crucial
It should therefore go without saying that adequate planning is essential for retail firms if they are to avoid being adversely affected by seasonal factors. Through developing detailed inventory and sales plans, you can ensure that your business is well-equipped to see out any seasonal fluctuations in trade, stock and labour availability without too much trouble. You’ll probably find that the more effectively you plan ahead, the higher your profits are likely to be. The importance of good planning, therefore, should be clear.
This is where your point of sale system can come in particularly useful. You can use this system as a resource when looking at what you’ve sold in the past and when you’ve sold it. Extract old data according to category and timing, checking sales data to ascertain more information on how seasonality has affected your business in the past. When you go through your sales data, you can make allowances for one-off factors such as unseasonal weather, one-time sales promotions and so on. Once you have a solid sales plan in place, you can then devise an inventory plan to help you cope during the coming months.
This post was written by Dani Butlerson on behalf of UK Point of Sale, a leading supplier of bespoke point of sale solutions in the UK.