How can businesses prepare for the Christmas period?

19 Oct 2021

For many businesses – especially those operating in the retail and hospitality sectors – Christmas can be one of the busiest times of the year. Preparing your sales and marketing strategies ahead of time is key, and with a bit of research, you can use changing consumer spending habits to your business’ advantage.

Christmas shop window display

Christmas spending in 2021

Earlier this year, eBay Ads UK commissioned Censuswide to conduct a survey of 2,000 UK consumers who celebrate Christmas. 27% of the survey’s respondents said they planned to start Christmas shopping and preparations earlier than they did last year. 41% anticipated finishing their Christmas shopping before the start of December. 

When asked the same question in 2020, only 25% of consumers who celebrated Christmas said they were planning to finish Christmas shopping before December. 

Earlier this week, the BBC reported on what consumers can expect in the run up to Christmas. 

Peter Wilson, the Managing Director of the global shipping firm Cory Brothers, said consumers should order items in a “timely fashion” to make sure they arrive in time. Although stock would be available, he said there might be less choice than usual. 

Gary Grant, the Founder and Chair of one of the UK’s largest toy sellers, The Entertainer, explained that although his 170 stores are “very full right now”, demand “will outstrip availability due to the shortage of drivers to move the company’s stock.  

Understanding supply and demand 

All business owners know that supply and demand can have a huge impact on profitability. The Covid-19 pandemic and the energy crisis have shown that external factors can influence a company’s ability to meet consumer demand and make a profit.

Understanding the laws of supply and demand can help business owners make good decisions, not just at Christmas and during times of uncertainty, but all year round. 

Supply and demand are the two economic pillars that form the foundations of a market economy – an economic system in which production and prices are determined by unrestricted competition between privately owned businesses.

The term is used to describe the relationship between buyers and sellers, and explains how pricing and availability affect the transaction of goods and services. 

Demand is the quantity of a product or service that customers want at a specific price. Supply is how much of the product or service the ‘market’ can provide. 

Impact on prices

Typically speaking, when the cost of an item falls, demand increases, because more people can afford it. The amount supplied, however, usually decreases, as the item is seen as less commercially lucrative. On the other hand, when prices rise, people tend to buy less – but suppliers supply more. 

At the moment, international supply chain issues mean demand is exceeding supply, which is driving up prices for consumers. ​​

The Leeds based toy designer, Boxer Gifts, manufacturers its products in China. Its Managing Director, Thomas O'Brien, said there's "plenty of stock" but the real problem is that "everything takes longer and is horrendously more expensive" which means the company "will be struggling to keep price increases to anything lower than 10%".

Supply chain issues aside, there are a few techniques that business owners use to manipulate market conditions in the run up to Christmas. 

Menswear shop window display with discounts

Menswear shop window display with discounts

1. Offer discounts 

If you want to drive up demand for your products or services in the lead up to Christmas, consider offering time-sensitive discounts such as seasonal promotions and cheaper prices on bulk orders. 

2. Restrict supply 

Some business owners manufacture their items in smaller batches in order to reduce supply. In doing so, these items have the potential to become more valuable to consumers due to their ‘exclusivity’. 

3. Influence demand 

Understanding your customers’ shopping habits in the run up to the festive season is key to meeting existing demands. However, you can also ‘create’ demand for other items. This could be particularly useful if you’re experiencing shortages of some items due to supply chain disruption. Who knows, you might even start a new consumer trend! 

If you’re looking to purchase additional stock early to protect your business against shortages and delays, you could be eligible for business finance. You can apply for a variety of different types of finance for this purpose, such as supply chain finance or a revolving credit facility. Use our free tool to see what you could get.

Find finance for stock

Additional preparations to consider

As well as considerations around supply and demand, there are lots of other things you can do to prepare for the festive season – particularly around marketing. You don’t have to spend lots of cash to set your business up for seasonal success either. 

4. Plan your social media strategy 

Have you created a social media plan for Christmas yet? 

If you leave it to the last minute you might find you’re too busy to use social media to your advantage. Think about how you’ll get people feeling festive, increase engagement and drive sales. Video is the most shareable form of content. The production value doesn’t have to be flawless: just focus on telling your brand’s story in an authentic way. 

5. Take a look at last year’s data

It feels like businesses are being thrown curveballs at every turn at the moment. The market is unpredictable, and no year’s the same as the last. That said, there’s no harm in looking at how you performed last Christmas. 

Whether you an online retailer or a restaurant, ask yourself:

  • What were our “best sellers”?

  • Which days/weekends were the busiest? (If you’re online, check your Google analytics)

  • Which campaigns had the largest impact on demand?

6. Consider different channels

It’s not too early to schedule your festive blog posts, schedule Christmas offer emails and create new Pay Per Click (PPC) campaigns. Think about how you’re going to promote the products and services your customers are looking for during the festive season. 

If you want to guide consumer demand to another product or service (perhaps due to a lack of supply elsewhere), how are you going to create a “buzz” around it?

Leverage the power of your website’s blog to promote items and offers. Segment your email marketing lists based on subscriber behaviour, and be sure to communicate your Christmas opening hours ahead of time. Crello’s blog post is full of good ideas. 

Finally, if you’re looking to secure business funding ahead of the Christmas period, you’ve come to the right place. We can help you secure finance to boost cash flow if you’re experiencing supply chain problems, or finance to hire more staff ahead of a seasonal peak. Whatever you need, see what you could be eligible for today.

Get started

Joe Morley
Joe Morley

Head of Unsecured Lending

Joe has worked in the alternative lending space since 2015. During this time he has helped hundreds of SMEs access millions in essential funding ranging from long-term asset-backed lending to short-term unsecured revolving credit lines and beyond. In his role, Joe manages and supports a large team of Credit Finance specialists.

Subscribe to our newsletter today

Sign up for the best of Funding Options sent straight to your inbox.