A nightmare before Christmas: Avoid a retail crisis this festive season

Retail crisis
After all, the festive season can also bring some unexpected, and not always joyful, surprises for small business owners. Indeed, a retail crisis can come about from logistics hiccups, problems with cash flow or even bad weather. They all have the potential to make the coming weeks less about jingling tills than juggling problems.

So, how can smaller vendors handle whatever retail crisis Christmas brings, while still having a happy and productive end to the year?

Delivery dilemmas

Presents under the tree are an essential part of Christmas, so failing to get orders to customers is a disaster any retailer must avoid.

When delivery firm City Link went bust on Christmas Day two years ago, about a million parcels were stuck in its depots, with SMEs and major retailers scrabbling to find alternative providers.

Whether a company sells online, or uses a combination of bricks and mortar and ecommerce, having a robust, trusted logistics set-up is vital, especially during the festive celebrations. Having a back-up plan to avoid a retail crisis doesn’t hurt either.

Getting products onto the shelves quickly, then out of the door just as fast can be the difference between success and failure at this time of year, so supply chain and courier services must be up to the job.

  • Find the best courier for your size of business based on cost, turnaround time, and ability to track parcels. They will represent your business to the customer, so choose carefully.
  • Test both orders and returns processes before the Christmas rush hits.
  • Keep details of a second-choice courier firm to hand in case problems emerge with transportation, or if your usual company can’t honour delivery dates.
Another pragmatic way to minimise logistics difficulties is to encourage people to use a click-and-collect service, with customers ordering items online or by phone, then physically coming to a store to take them away.

This removes the hassle of parcel deliveries being missed at home, and the returns process also becomes easier if an individual can see what they’ve ordered in the shop.

Plus, there’s always the possibility someone may buy extra items in store once they’ve seen what’s on offer.

Weather washouts

Some disruptions to trade can’t be foreseen, and many businesses have found their happy Christmas deflated by bad weather. Storms can have a big impact on footfall on the high street – heavy rain last December saw many shoppers buy online or use retail parks.

Another blow came because temperatures were mild, so clothing retailers struggled to sell the expected levels of winter wear.

Then, the winter floods of recent years saw many SMEs left with damaged stock they couldn’t sell, or work premises out of action, causing a major retail crisis as firms had to shut up shop altogether.

Long-term forecasts aren’t reliable enough to predict such things, but it is wise to imagine every such eventuality – and possible response.

Drawing up a risk assessment and business contingency plan is the best way to be prepared if something unfortunate occurs.

  • Weigh up how the company could operate if any of these elements were out of action. For example, would the company’s e-commerce function still work if the physical store were closed?
  • Ask yourself: what are the key elements to the business? Identify essential processes and equipment, as well as vital suppliers, customers, and staff.
  • What would be the first thing to do if things go wrong? Which emergency service should be called, or which are the necessary employees, suppliers, or customers to contact if a problem arises?
  • Devise a recovery strategy, whether that’s making an agreement with another business to share space temporarily if disaster strikes, or planning with a third-party supplier that they could look after customers if you were unable to do so.
  • Keep an up-to-date list of temporary workspace providers, so you can relocate at short-notice if required.
For guidance on pricing strategy and protecting against the Christmas crimewave, continue on the next page.

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