There is a traditional cycle of seasonal sales in retail; everyone knows that hats, mitts, scarves and other winter gear go on sale as spring returns, just as everyone knows sales spike at the holidays. Those predictable, seasonal cycles have served retailers well over the years, allowing them to time sales and meet customer demand while maintaining profit margins. But in a hyper-competitive landscape, every edge is necessary in order to impact the bottom line, and not all seasonal sales spikes are as obvious as snow shovels and jackets.
Case Study: Using Data To Uncover Hidden Seasonal Trends in Russia
Discovering less obvious seasonal sales spikes requires data analysis. Only by looking closely at trends can retailers hope to uncover buried secrets in their customers’ spending habits. In Russia, e-retailer Ozon.ru used analytics to process 16 years of data. They discovered that in addition to hats, coats and gloves, their customers purchased more books in the winter than any other time of the year. Ozon teams were able to take that information and use it to strategically recommend and price books as winter closed in, leveraging this hidden insight to increase revenue and strengthen customer relationships.
Market Changes or Short-Term Trends? Only The Data Knows For Sure
When analyzing seasonal sales spikes to make strategic pricing decisions, retailers must look at more than just the calendar. If a grocery store raises prices on ice cream and sales climb from May to September, it would be logical to conclude that the market will sustain that price increase over the long-term. However, a long-term increase might not be the right move. Seasonal spikes do not guarantee a long-term trend. Perhaps that summer showed a 5-degree increase in average temperature or a disproportionate number of rainy days kept families away from ice cream parlors.
Outside influences can appear like seasonal trends, which means retailers must have access to a variety of data points in order to time seasonal sales and prices correctly. Without understanding the bigger picture, retailers can’t accurately identify long-term trends that will lead to success. Misguided assumptions based on logic or feelings can lead businesses to make poor decisions that can actually lead to a dip in sales over the long term.
Seasonal sales trends have always been important for developing long-term strategies – but retailers should dig beneath the surface to uncover hidden trends and preferences. When retailers collect the right data and ask the right questions, they can capitalize on the unique seasonal spending habits of their customer base, improving the bottom line and strengthening customer relationships all at the same time.