Demand for products and services is never static. There are always periods of higher and lower demand. The demand for a particular product can be influenced by a seasonal factor – the time of year, holidays.
Seasonal demand
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Seasonal demand – what is it, types of seasonal demand, off-season sales promotion
Demand for products and services is never static. There are always periods of higher and lower demand. The demand for a particular product can be influenced by a seasonal factor – the time of year, holidays.
In the article, we will analyze in more detail what seasonal demand is, types of seasonality, how to find out the seasonality of a product or service, how to prepare for the start of the season, and how to keep sales in the off-season.
Seasonal demand – definition, types
Seasonal demand is a fluctuation in demand for a product or service under the influence of external factors. The change can be sharp (sales grow sharply or vice versa fall) and moderate. The season lasts for a certain period – days, weeks or months.
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Types of seasonal demand
Seasonal demand is divided into types according to two factors:
- definition of the season (holidays, holidays);
- degree of influence on demand;
Types of seasonality by definition:
Seasons. There are products that sell well only in winter or summer. For example, real estate in the private sector is more actively chosen and bought in the warm season (depending on the area), while in winter the number of object views decreases sharply. Winter clothes are bought more in autumn and winter, less often in summer.
Holiday season. Some goods are actively bought for Valentine’s Day, others for the New Year. For example, no one orders Christmas decorations by February 14th. Usually, demand increases during the pre-holiday period – within a month before the holiday date, the peak falls on the last 2 weeks before the start of the season and directly in the season.
Beginning of the school year. In the period August-September, the demand for school supplies, uniforms and stationery is growing.
Promotion period. On Black Friday, the demand for goods is higher than usual.
Business activity. This includes the holiday season, non-working days due to holidays.
Irregular events. The World Cup, Eurovision – during such periods, the demand for themed goods can rise sharply. Or, for example, if the country becomes the World Hockey Champion, children may want to play hockey, and then the demand for appropriate equipment may increase. Events can also negatively affect demand. For example, during the pandemic, many people were left without work or their income decreased, and their solvency decreased accordingly.
Trends. If there is a trend for a product, service or phenomenon, then demand increases sharply. An example is the high demand for simple-dimple and pop-it after they became popular on Tik-Tok. Before that, there was a similar situation with spinners. After the release of the series “Queen’s Move”, the demand for chess increased.
These types of seasonality can also be combined into two groups: cyclical seasonality (change of seasons, the season of holidays and vacations, black Friday, business activity) and eventful (influence of trends, events and newsbreaks). Cyclical seasonality is more predictable and easier to prepare for. With event seasonality, the business must respond quickly, and there is less time to prepare.
Types of seasonality according to the degree of influence on demand:
Rigid seasonality. The product is in demand for a short period. Demand rises sharply and also falls sharply. A typical example is Christmas trees and Christmas toys. Basically, such demand depends on holidays and irregular events.
Bright. Demand decreases and increases by 30-50%, and this period is extended in time. Demand is affected by the change in the season, the holiday period. For example, skis are most often bought for winter, but this does not mean that they are not taken at all during the rest of the year.
Moderate. Changes in demand fluctuate within 10-15%. The type of demand refers to goods that are bought at any time of the year. For example, flowers. An increase in demand can be observed before March 8, February 14, New Year, but in general, this product is bought all year round.
There are goods that have a minimal impact on the seasonal factor. For example, food, medicines, hygiene products, household chemicals, and the entertainment industry are always in demand.
How to find out the demand for products and services
A tool that will help determine the demand for a particular product. And also understand what type of seasonal demand it belongs to:
- Google Trends. There are more opportunities here than Wordstat, because in addition to the history of requests, you can see the dynamics of fluctuations in demand for goods by region, as well as see separately data on product cards and news. You can also compare data across multiple queries in Google Trends.
When you enter a query, Google Trends prompts you to specify its type. For example, if you just write “Chess”, the service will show all requests with this word. But some users were looking for the game, while others were looking for information about the musical “Chess”. To get more accurate data, it is better to immediately clarify the request.
- Data from analytics systems. Study how the dynamics of queries that led users to your site changed. You can get statistics from google analytics.
*This analysis method is best used in conjunction with Google Trends rather than as a standalone tool.
- Data from CRM. If you’ve been selling products for at least a year, preferably longer, you can cross-reference CRM data with Google Trends seasonality reports to get a clearer picture of your specific store.
How to prepare for the start of the season
You need to prepare for a period of high demand in advance – purchase goods, prepare website pages, create a marketing strategy. If the product falls under the cyclical type of seasonality, it is worth starting preparation 1-1.5 months before the start of the holiday season and 4-5 months before the start of the holidays. During the holidays, the change in demand is more gradual than during the holiday season. As mentioned above, in the case of event seasonality (trends, newsbreaks), you need to act immediately, so the preparation period will be even shorter. Exceptions are events that are known in advance, for example, the World Cup. First, you need to divide the goods into segments by type of seasonality in order to determine at what period it is advisable to start preparation.
By the start of the season, you should have resolved the following points:
Availability of products in stock. The worst thing is to refuse customers during a period of high demand due to the banal lack of goods.
The ability to quickly replenish the warehouse. It is impossible to calculate 100% how many units of goods will be bought from you, therefore, if the goods still run out, prompt additional delivery to the warehouse should be arranged. This point must be discussed with suppliers in advance.
Delivery. During a period of demand, people want to receive goods as quickly as possible. For example, if a person buys a gift by February 14, he does not need delivery on February 10 – he will simply buy the goods in another store.
Personnel optimization. During periods of high demand, the workload increases. It may be worth hiring temporary additional employees (for example, couriers with a daily fee, call center operators). Or motivate the current staff with bonuses and bonuses for processing.
Prompt processing of orders. It’s the same with delivery. During periods of high demand, customers will not wait long for their order to be processed. Although the need for quick order processing no longer depends on seasonality, it will be a plus at any time of the year.
Correction of all technical errors on the site. Before the start of the season, you need to test the site for errors and promptly fix them. If during a period of high demand your landing page does not open, the page takes a long time to load, or an error occurs when trying to checkout / pay for an order, this is a disaster.
Ready-made marketing strategy. It is necessary to prepare an advertising budget in advance, decide on the types of advertising, create creatives, plan the date and time for the launch of the advertising campaign. Advertising must be launched before the start of the season.
Smoothing seasonal fluctuations in demand
Is there life after the end of the season? Of course, it is difficult to keep sales at the seasonal level. But there are several ways to minimize losses when demand falls:
Organize promotions. For example, announce a sale of stock leftovers or simply offer a discount on seasonal goods. Many people like to shop ahead of time when the hype subsides. Especially if there is motivation in the form of a discount.
Expand assortment. In order not to live from season to season, you can add additional headings. For example, to sell sports equipment for winter and summer sports, and not just for winter.
Hire seasonal employees or outsource part of business processes during times of high demand. Instead of staff expansion and year-round wages with part-time staff. For example, you can have 10 permanent couriers, and hire the rest during the season. The main thing here is not to make a mistake and attract seasonal employees in advance in order to avoid a shortage of staff at the very peak of orders. Requirements for such employees should be adequate. A college-educated middle manager won’t wait to be hired as a courier for the New Year holidays. But it is quite possible to hire a student.
Avoid unnecessary spending. A typical mistake of newcomers to business is to start actively spending what they have earned after earning money during the high demand season. The money is spent on staff expansion, the purchase of additional equipment, office renovation, the purchase of large quantities of goods, personal needs. As a result, by the beginning of the next season, there may simply be no money left for really necessary things – launching advertising campaigns, training staff.
Conclusion
Surges in demand for seasonal items are common in sales. It is important not to ignore the seasonality factor, but to prepare for it in advance (the article says how). If you have a strictly seasonal product (for example, Christmas trees), it makes sense to work in parallel with other areas. For example, develop two online stores. On one there will be Christmas trees, and on the other goods of moderate seasonality, for example, watches. Then you don’t have to depend so much on the change of season.