How Entrepreneurs Capitalize On Holidays And Memorial Day Weekend To Increase Sales
When we open a business with a physical location, the first thing we consider is “location, location, location.” The reason why the location is so important is “foot traffic.” Foot traffic will be the most important source of initial sales in the beginning of your business. Your rent is not just an expense for overhead or space, but it’s a vital part of your advertising. Restaurants, retail, services and almost anything you can imagine will benefit from increased foot traffic. You’d be hard pressed to ever find a business that would have fewer sales from increased foot traffic.
Holidays like Memorial Day Weekend are free reoccurring events that artificially increase the foot traffic to your business. Small businesses that decide to close on holidays are likely losing thousands and mature businesses are losing millions. For example, jewelry stores report 28.6% of their annual sales occur during the holidays. Thus, more than a quarter of all sales in your store possibly occur during holidays. If you choose not to capitalize on these opportunities, then you’re choosing to make at least 33% less this year.
Opening during the holidays is the simplest method to capitalize on the increased foot traffic and perceived increased consumer buyer confidence. Entrepreneurs should tailor their services for the holidays to the best of their abilities – other than discounts. Discounts are common ways to increase sales, but “bundling” is significantly better for entrepreneurs. For example, Costco is known for their aggressively discounted pricing. But, more importantly is “how” they price their products than their margins. The Wall Street Journal reported that the average customer spends $130 dollars at Costco per visit in 2010.
Why does this happen? Costco will show terrific prices per unit, but they will be sure to make the total purchase total a specific amount. For example, regular chicken breast compared to organic chicken breast under Costco’s Kirkland brand will be half the price. But, the total cost for a package of regular and organic chicken breast is the same around $30 to $40 dollars. Costco “bundles” and engineers the prices to make sure that they earn more while providing value. Instead of offering discounts, entrepreneurs should find bundles to provide value without sacrificing their margins.
Lastly, you may wonder if it’s worth the effort to open during Holidays. Holidays provide increased sales, but it also leads to higher expenses in labor and more headaches. John Oliveira, Primabel Bar & Restaurant, recently experienced Mother’s Day. During mother’s day Oliveira had 3 times more business on that day than a usual weekend. But, he also had to deal with 3 times the work and stress compressed into a single day. Oliveira is a first generation immigrant who started his career in the military to eventually start a successful family business. He’s no stranger to hard work, but even John walks away drained during the holidays.
Annual holidays are going to affect your bottom-line. It’s not an exaggeration to assume that a third of your business could be sourced to the holidays during the year. Making sure you capitalize on those dates and properly using it to your advantage could make or break your year.