seasonality your business how to handle adapt cash flow

Seasonality & Your Business – How to Take Advantage of Seasonality

Written by: | June 3, 2021 | Leave a Comment

In some industries you hear a lot about seasonality, but what does that mean for your particular brand, and how can you take advantage of it?

This blog outlines seasonality, tips to help cope with the quiet times, prep for your busy season, and how to make the most out of both your busy season and the fact that your business (or those you deal with) experience seasonality.

As always, our focus is on skin care, hair care, and beauty brands, but this article can apply to any industry.

What is Seasonality in a Business?

Seasonality refers to trends and events that happen on a predictable schedule. Busy shopping events and holidays, summer vacations, and crop harvests are all examples of seasonality.

Seasonality clearly affects many sectors of retail sales. The main “holiday shopping period” is focused, in the West at least, around the months of October through December. This can trigger seasonal employment, too. We’ve seen how Amazon.com hires over 100,000 seasonal workers, and that’s true for many other large national retailers like Target.

Cyclical effects, on the other hand, are not bound by calendar years but instead are cycles of events or factors that occur at less predictable times. Think of cyclical recessions, unemployment, and trends that come and go and then come again, like fads in the makeup  and fashion worlds.

However, because seasonality is predictable, we’re going to focus on it and how you can make the most of it.

Why is this useful to know?

Seasonality is about predictability and is used to make buying, inventory, staffing, product launches, and advertising decisions, so it’s important to understand how it affects your particular business.

Prices can also vary depending on the type of business you’re purchasing from. Supply and demand will shift as different types of consumers place orders for various seasons. For example, crop harvest times for certain ingredients shift around the world, and understanding when supply is highest means you’re more likely to get a better price. Even if your business isn’t affected by seasonality, your suppliers may be.

At Essential we don’t alter our prices depending on the season, but we do recommend customers place orders (especially those in our Contract Manufacturing division) for products now for this year’s holiday shopping season.

Unsure about seasonality in your business? Here’s how to find it (if it exists)

You may instinctively know which are your busy and which are your quiet periods, but you may realize that you always sell out of that one product in April so for that item, you may be subject to seasonality.

Here’s a rough guideline: Review sales data from the past 3-4 years. Covid-19 altered many sales cycles and trends, so it’s wise to go back a few years before 2020 if you have the data. Look for notable increases or decreases in sales and track them—is there a month or period that stands out? Try to remove that natural growth over time your business might experience.

 

How to Cope with the Quiet Times

The most obvious challenge with seasonal businesses is managing cash flow during the quiet times. You’ll need to create and sustain reserves of cash as much as possible in the busy seasons, but luckily most beauty brands are not as vulnerable to seasonality as other industries.

Activities Before and During Quiet Periods

Marketing! Develop brand awareness, and work to create and promote content. Stay “top of mind” for either the good times to come that are associated with your seasonality or simply how your amazing products are the perfect purchase year-round. If you sell a sea salt hair spray, create a video of how to make it work on winter hair.

 

Follow up with leads for both customers and retail partners. This is a time to remind them of your services, availability, and good fit.

 

Get Feedback. Solicit referrals, reviews, and testimonials to get ‘social proof’ that feels more authentic to your customer. Take time to remind your customers of your brand and consider offering incentives for them to provide testimonials or reviews you can use in your own marketing.

 

Diversify. Spend time preparing for the busy season or finding new ways to tap into a different type of seasonality. In skin care, for example, the spring and summer are the busy season for sun-based products like sunscreen and sunless tanner. If you find the winter sunny vacations aren’t providing enough business, consider tapping into what is seasonal in the winter: think body and hand balms, holidays spices, and more.

 

Subscriptions can be an excellent tool to maintain sales numbers during the off-season. More on this later, but consider offering products at a slight discount if they agree to purchase one a month.

 

Optimize and streamline any processes that need a little work. This might be upgrading equipment, or finally getting that website up and ready. Take time to polish up skills, confirm you’re processes make sense, and perhaps even give your storefront a facelift.

 

Preparing for Your Busy Season

Work with suppliers early—several months in advance—to secure your hero products or ingredients with time for any unexpected delays. You’ll need time to fully stock your own shop or retail partners.

Nurture any soft leads for sales opportunities. This might be reaching out to a local retailer, booking a slot in a farmer’s or craft market, or perhaps preparing and sending samples out via giveaways.

 

 

How to Take Advantage of Seasonality

Market and sell your services when your customers need you. This is mostly relevant to people who sell on to other retailers: the retailers are buying in advance of their busy season, so start selling to them in advance of their buying time to raise awareness.

Be sure to market your seasonal products well in advance to increase awareness and “warm up” your buyers. Consider an event or giveaway during the launch of your product to build hype around your product launch, while leaning into what makes your brand special. Within the beauty industry, introduce trends and show lifestyle ads using your product in a certain setting or season so customers understand why they should buy it.

Create scarcity by only selling a product at one time of the year. We’ve all seen the “here for a limited time” that fast food restaurants and coffee shops market, encouraging the sale of the specific seasonal item (think pumpkin spice lattes and unique flavors). This is a common tactic in promotions when you hear “limited time”. It may feel a little gimmicky, but it can create genuine buzz.

For skin care, however, most consumers want their daily products on a daily basis, so ‘scarce’ products are best suited to truly unique smells with more limited appeal—only offer a mango-scented room spray during August, for example.

Holidays

Seasonality often comes hand in hand with some sort of emotional or nostalgic factor. Winter holidays are full of nostalgia, excitement, warmth, travel, and family time. Do you have products that complement those experiences? Or perhaps you can market your normal products in a way that speaks to those emotions?

If you have the time or the staff, offering gift wrapping can be a nice touch and makes it easy to offer your products as great gifts.

Create a gift guide for your brand. This can be as simple as advertising “for those with dry skin” or reference geography to highlight how family and friends in northern states might need a winter skin balm, or a rejuvenating body polish.

 

Seasonality with Essential

As we mentioned, our prices don’t change based on seasonality, so our tip instead is to give yourself enough time to order in advance for your busy season. This is particularly true for our Contract Manufacturing customers, where sourcing specific ingredients, planning production schedules, and receiving packaging mean you should order now (early summer) for the holiday shopping season.

Let us know what influence, if any, seasonality has in your business. We’d love to hear any tips or tricks you’ve learned to manage seasonality, or avoid it altogether!

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