As retailers prepare for the busy holiday season, they need to adequately prepare to face off against the resonating challenges felt by an inflationary market. Despite some gloomy outlooks for holiday spending pointing to a flat trend with less than a 5% increase in spending and rising consumer goods prices, there are ways retailers can remain resilient even during days of deep discounting found on Black Friday and Cyber Monday.
From embracing changing consumer behavior to being proactive in their promotional strategies, there are ways to prevent Ebenezer Scrooge from crushing the holiday spirit. Now that the holidays are nearly upon us, retailers need to make sure their promotions don’t sacrifice their margins and that they unlock profitability in their agreement management.
That’s why we’ve assembled four essential steps for retailers to unlock success this holiday season.
1. Manage Seasonal Promotions More Effectively
Seasonal promotions can hold great opportunities for boosting sales, but they are also rife with challenges when managing them and trying to maintain decent margins and meet customer expectations. However, by beginning the holiday discount season with the right vendor agreements that address and incorporate these promotions into them that allow pricing adjustments, retailers can create new opportunities that attract new customers and foster loyalty to augment their margins.
This front-end negotiation phase is only the beginning to managing promotion conditions so retailers need to ensure that all contract components are carefully monitored, providing real-time alerts for any deviations from the original margin calculations — which an automated agreement lifecycle tool can help with.
2. Maintain Agreement Management More Efficiently
In order to optimize these seasonal promotions, agreements need to be managed efficiently. Retailers can proactively plan their strategies as well as consider factors like discounts, product bundling and exclusivity when they establish agreements that account for promotions. By doing so, they create a basis from which they can ensure alignment in promotional activities through collaborative decision-making with their partners.
With effective agreement management, retailers can streamline communication, reduce manual effort and enhance accuracy, all of which maximize profitability. By incorporating automation into this process, retailers will have a more agile ability to respond immediately to market changes and fine-tune promotions for optimal results.
3. Discuss Promotion With Potential Vendors
With the extensive discounts that customers expect on Black Friday and Cyber Monday, it can be challenging for retailers to manage promotions and keep their margins. It’s imperative for retailers to incorporate promotions into vendor agreements from day one. These promotion partnerships leave room for pricing adjustments which open great opportunities for retailers to intrigue new customers and earn loyalty from returning shoppers.
These obviously help amplify margins for both the retailer and the partner. Managing conditions like promotions doesn’t stop at the negotiation phase. Automated agreement lifecycle tools can help retailers manage promotions from negotiation through implementation to ensure all contract components are monitored, reporting any deviations from original margin calculations.
4. Leverage Agreement Management Solutions
There’s no substitute for preparation, and when it comes to the holidays, retailers need to be ready to navigate a myriad of challenges ahead of time. By testing different promotion strategies and personalized offers and by considering external factors such as inventory challenges, shipping delays, and fluctuating input prices, retailers can be ready for anything.
Agreement management solutions can be invaluable ahead of the season, providing retailers with a comprehensive overview of historical agreements and facilitating scenario testing and simulations. By exploring multiple what-if scenarios, retailers can evaluate the impact of different variables on promotions and adjust their strategies accordingly. This proactive approach empowers retailers to anticipate and mitigate potential disruptions, ensuring seamless execution of seasonal promotions.
While every year is different, and every promotion may have its hurdles or setbacks, there is always an incredible opportunity for retailers to learn and improve. Analyzing the outcomes of promotions provides valuable insights that inform future agreements and operations. Retailers can identify patterns, assess the effectiveness of different promotional tactics, and refine their strategies for the following holiday season. By automating the determination of corresponding margins, retailers gain enhanced transparency, enabling informed decision-making. Comparing suppliers, customers, and assortments becomes easier, allowing retailers to identify the most lucrative strategies and forge stronger partnerships for future success.
Leveraging efficient agreement management and embracing technology-driven solutions are the real keys for retailers to unlock profit and better margins during seasonal retail promotions. Regardless of what this crazy season throws at retailers, they can navigate uncertainties, maximize sales, and ensure a joyous and prosperous holiday season — as long as they prepare now.
— Stefan Hilger, Owner and Executive Board Member, gicom