home Work and education What is sales seasonality? Seasonal factor in trade: how to effectively sell seasonal goods

What is sales seasonality? Seasonal factor in trade: how to effectively sell seasonal goods

Developing a sales plan and ensuring this plan is a pressing issue in the current economic situation. An incorrectly drawn up plan leads to direct losses - both in the case of excess storage of goods in the warehouse, and indirect losses - in the event of a shortage of goods in the warehouse, which leads to lost profits, deterioration of service, and even unnecessary bonus payments to sales managers.

One of the problems that greatly influences the preparation of the plan is the seasonality of sales of some goods. Some products, for example, running shoes, are more popular in summer than in winter. But heaters sell better in the cold season. These products are seasonal.

The confusion is also caused by the unstable macroeconomic situation, when inflation pushes prices up, and declining consumer demand forces sales to decrease in quantitative terms. In addition to negative factors, positive factors can also influence - both for the company as a whole - if the company is actively growing, and for specific product positions - if you invest a lot in marketing the product, then the demand for them can grow faster than the growth of the company. All this introduces a corrective element into the forecasts, because it is no longer so clear to rely on information about sales history without taking into account the real situation.

Therefore, when drawing up a sales plan, take into account the seasonal factor and trends in the company.

How do I calculate the plan to take into account seasonal variations?

What is a seasonal factor - “seasonality”? This is a planned and regular deviation of product sales from average values. Seasonality is often calculated monthly for a calendar year relative to the previous calendar year for each product for which a sales plan is being built and for each outlet individually, and the final plan is compiled by consolidating the obtained values.

To calculate odds, I recommend calculating in unit terms. If you calculate in monetary terms, then the number of influencing factors increases many times over and this, in addition to increasing the volume of calculations, also greatly increases the chance of error.

Calculating annual seasonality coefficients is quite simple - you need to take the average monthly sales at the end of the year (the amount of sales for the year divided by the quantity), and then, for each month, calculate the deviation of the actual sales volume from the annual average.

(Consumption per month / Average annual consumption = Seasonal coefficient)

If our sales schedule is something like this:

Then, based on the calculation results, you should get something like this table for calculation (for 2010):

Seasonal odds:

But the task is not to calculate the coefficients as such, but to calculate the sales plan according to the current actual sales values for the year. Let's assume that we conduct an analysis at the end of April 2011 and calculate the sales plan for May 2011:

And our plate will look like this:

The task is to understand how much we should sell for May, taking into account current actual sales volumes and seasonality. To do this, we will bring each of the months of the current year to a single base, removing from them the seasonal coefficient that we know.

(Actual Consumption per month / Seasonal coefficient = Ots Average annual consumption)

We get these values:

Which means that if we take into account seasonal factors, the expected average monthly for the year is 246 units/month.

From this, knowing the expected average for the year and the seasonal coefficient in May (calculated in the previous step), we calculate how many sales are expected in the month of May by multiplying the expected average annual sales by the calculated seasonal coefficient: 246 * 1.44 = 354.4 units.

Thus, we continue to formulate a sales plan for each month until the end of the year, adjusting according to actual sales data.

Unfortunately, these laconic calculations are not entirely correct...

We took into account the influence of seasonal fluctuations, but did not calculate the influence of the general trend. If your demand falls (or grows) by 10% every month for objective reasons, then without taking these movements into account, your newly drawn up plan will become untenable and, as we said above, will lead you to losses.

How to assess the impact of a trend?

The result of its calculation looks something like this (orange line):

The problem is that this method is difficult to use when calculating in Excel. But you can try to use simply linear functions, calculating the average monthly sales at the state “at the beginning of the year” and “at the end of the year” (taking into account seasonality), and assessing how it has changed over time. Or simply taking as a target value the one you would like to focus on (“I’m sure that sales volume should increase by 10%”).

Be that as it may, the result of the calculations is the resulting monthly trend “slope” coefficients for each product at each retail outlet for each month where you calculate the sales plan. The problem is that in a normal situation, within a year this is not a straight line, but bends smoothly.

The resulting coefficients are used to adjust the estimate of average annual sales, which, let me remind you, we rely on to estimate future sales.

If we assume that in current economic realities, unit demand will fall by 10% by the end of the year, then the monthly adjustment factor should be approximately equal to 0.987. This means that by this coefficient we will change the estimated monthly average within the current year according to the trend coefficient for each month:

(Actual Consumption per month / Seasonal Coefficient * Trend coefficient = Ots Average annual consumption)

And the calculation of the current values will look like this:

We noticed that the result was 349.8 pieces. instead of the previously calculated 354.4 pieces? It seems that this is not very much, but if you have billions of dollars in turnover, then such an error costs a lot.

To increase the quality of work with seasonality, it is necessary to recalculate the annual seasonal coefficients for the previous year, relative to the identified trends. But if you do not want to carry out a large amount of calculations, even such a small clarification for the current year can already qualitatively improve planning.

It is important that these calculations are carried out and adjusted regularly, according to actual data, in order to obtain the most adequate sales plan and understand how you will ensure and control it.

In real work, professionals usually use more complex approaches. The calculation is carried out not by months, but by weeks, or even by days. More factors influence target values. And the forecast model goes beyond the usual average calculations. But the approach presented above is something that anyone involved in planning can apply, even without special tools.

If this is too labor-intensive to do manually, and if you have 10 retail outlets and 15,000 products, then welcome to us. Our supply management solution Mycroft Assistant automatically collects sales data, analyzes the current state of sales, and independently calculates the optimal operating model and influencing factors. And based on the data received, it generates a sales forecast for each product at each retail outlet. And based on these forecasts, it issues recommendations on the need to replenish stocks so that you rationally ensure this sales plan. So, if you want to optimize your company’s work, but don’t know the best way to do it, welcome to us.

Depending on the time of year, goods are purchased more often or less often. Since this indicator is extremely important for entrepreneurs and owners of online stores, the term “seasonality” was introduced and divided into different categories. Essentially, it is the degree to which sales of a product fluctuate depending on the time of year.

Seasonality level for different products:

tough- sales decline reaches up to 100%. Marketing methods are powerless in this case. These are mainly holiday products, like valentines, red New Year's hats, Easter decorations;

average- reduction in buyer activity by 30-40%. This is the case when certain promotion methods help increase sales during the off season. These include ice cream, wedding suits and dresses, plastic windows, and services for their installation;

moderate- decline by 10-15%. In this case, there is no point in spending resources on increasing sales during the low season, since the benefits do not correlate with the risks.

To best reveal the problems of promoting goods out of season, we conduct a step-by-step study:

We analyze individual product items that consumers are looking for out of season;
We study competitors' offers;
We make recommendations for an SEO strategy;

In order to carry out such complex work, we use the service Serpstat.

How high is the frequency of individual product items?

As an example of analyzing a seasonal product, we conduct research on a separate seasonal product. In this case, we kill two birds with one stone: we consider a product that is difficult to promote, and draw conclusions about the prospects for growth in its sales.

Now it’s the height of summer, and the temperature outside the window jumps to +28 C. We take a traditional winter product - skis. We enter the request “buy skis” and select a search engine. Go to the “Selection of phrases” section.

When comparing the frequency for the last month and the annual average, the gap ranges from 30 to 50%.

However, for some requests the frequency has not changed, and this gives a wide springboard for maneuvers.

High-frequency keywords are much harder to promote if there are no significant resources, so the option for small stores is semantics with an emphasis on mid- and low-frequency queries.

We compare with indicators for low-frequency keys. For example, we take the request “buy Fisher skis”, and we get the following results: the number of similar keywords is less than for high-frequency keywords, and they are requested much less often.

On the other hand, their conversion rate is high. If you add these keywords to your keywords and properly build an SEO campaign, your sales will increase.

One of the additional sources of traffic for seasonal products is search suggestions, which are often used by users.

Enter the key into the search and select a search engine. Go to the “Search Hints” section and filter by toponyms.

The search results show that in the ski niche it is worth paying attention to children's equipment.

What does the competitor offer?

One of the main tools for promoting a product is the introduction of competitors' ideas. In the context of seasonal goods, this is especially true. If you borrow “fresh” solutions from competitors and use them in a different wrapper, the damage from seasonality will be minimized.

Let's say we know that with the onset of summer, the number of gym visitors drops. To combat this, many are developing a discount system. Proper presentation of such a commercial proposal will work more effectively. For example, if a visitor receives an additional percentage discount for every extra kilogram, the promotion will attract more traffic.

Using such ideas is not the only advantage we get from analyzing competitors. It is important to note usability and design details that have changed due to the promotion of a seasonal product.

We conduct an analysis of competitors using Serpstat. To do this, enter a query, select a search engine, and go to the “Leading Pages” tab. We group the data by potential traffic level.

Now we discover the leaders of potential traffic and analyze their sites. For example, the ski store predelanet bases its policy on reviews and sales. At the same time, an outdated, colorful design repels a potential client. We combine successful solutions in promoting seasonal products, high-quality design, and get the maximum number of customers.

Even the low season of product sales is not difficult to revive if you take measures to optimize your SEO campaign. These actions are the foundation in the process of leveling out the damage that seasonality causes to profits:

definition of keywords with which the SL is replenished;
analyzing search tips and using them for further promotion;
comprehensive research of competitors, and implementation of the best solutions in design, usability and discount system on your website.

If you have your own store selling various products, or you are optimizing sites that sell various products, use the information you receive to your advantage.

Notes

Seasonality takes into account the influence of external factors on changes in sales. The main feature of the seasonality indicator is that we cannot influence its changes. For example, an increase in sales of flowers and sweets during the March 8 holidays or an increase in ice cream sales in the summer. We cannot influence with you the hot weather or the presence of holidays. Consequently, all these factors are external and relate to seasonal fluctuations.
Seasonality calculation excludes internal factors of sales changes We exclude all fluctuations in sales in the current period associated with store activities that are not planned in the future. For example, holding or lack of goods on the shelf.
Only comparable store sales are used –

Advice:

Do not use monthly averaging; use deviations from the current period. You can often come across a recommendation - “when calculating the seasonality coefficient, calculate the average sales value for the period and look at the sales deviation relative to each month.” As a result, this method leads to calculation errors, since it does not take into account which month you are planning sales for.

Seasonality of demand is a phenomenon in which the demand for certain goods and services changes under the influence of external factors. Such factors may include: time of year, weather, events, periods of business activity and even days of the week. The simplest example: champagne and tangerines are in high demand during the New Year holidays, and by wedding photographers in the summer. The cycle is equal to one calendar year and all statistical indicators are maintained within this period.

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Types of seasonality

Fluctuations in millet products can greatly influence some types of business, so it is customary to distinguish 3 types depending on the degree of influence:

tough,
bright,
moderate.

Highly seasonal products are in demand for a very short period of time. Let's take New Year's paraphernalia as an example - they are bought only once a year. For bright ones, sales fluctuations reach 30-50%; an example is outdoor sports equipment (skis, snowboards, bicycles). For moderate - fluctuations in sales do not exceed 10-15%. Such products are called all-season.

Specifics of promoting seasonal products on social networks

Of course, there are certain specifics not only of sales, but also of promotion of such products on social networks. First of all, you need to determine in what period you need additional sales: hot or low. Intensified promotion and the fight against competitors are not always relevant precisely during periods of increased demand: sometimes it is necessary to find new customers precisely during periods of falling sales.

Conducting high-impact advertising campaigns;
Attracting opinion leaders;
Increasing the mass of positive reviews;
Active work with negative feedback almost online;
Stay in touch 24 hours a day via all channels: instant messengers, social networks, mail, telephone;
Active posting from one to several posts per day.

During a period of falling demand, it is enough to carry out supporting measures to increase potential customers and retain the existing base:

Advertising campaign in quiet mode;
Regular posting;
Planned work on reviews (unless there is a surge of negativity, of course);
Thinking and developing a strategy for periods of increased demand.

It happens exactly the opposite, when seasonal products need new customers during low periods. This is mainly true for small companies that have formed a base of regular customers and do not have the opportunity to expand during the season. For them, the optimal strategy would be to attract new clients or liquidate balances in the off-season.

If you are confused about what actions you need to take during low and high demand periods, please contact us . We will offer an action strategy that suits your business.

In any case, you need to take into account the specifics of promotion on social networks and the principles of interaction with the audience. All work related to the management of business communities, community management, processing of negativity, and periodic mailings must be carried out year-round.

How to keep sales during the low season

When your phone, social. networks and messengers stop heating up with the number of requests, the question arises of how to stay afloat and what to do with the team. We can offer several ideas.

Planning

Firstly, it is very important to know your periods of rising and falling demand in order to prepare your business. We have given a detailed example of how this can be done. Knowing these months, you should “accumulate fat” in order to survive painlessly during periods of falling demand. Many entrepreneurs are dizzy with the success of high sales volumes during periods of high demand and they make typical mistakes: expanding their staff, updating equipment, renovating their office, or moving to a new one. Afterwards there often comes a bitter retribution for rash steps. That's why we plan and save.

Diversification

A good way to neutralize seasonal surges is diversification, that is, expanding the range. For example, sellers of sleds and cheesecakes switch to bicycles and scooters in the summer. A highly specialized business can establish you as a professional in a specific field, but promises to live in leaps and bounds from season to season.

Stock

To support sales during the low season, you can launch promotions and special offers. The offer can be anything - a month of work as a gift when concluding an annual contract, 3 for the price of 2, just a discount on some items. The main thing is that the promotion solves exactly your problem: ensures an influx of operating funds, liquidates inventory, and so on.

Seasonal employees

If you have a need for low-skilled labor - assembly, delivery - it makes sense to hire additional personnel just for the “hot” time instead of maintaining such workers all year round. This strategy is not applicable to everyone. For example, we cannot do this. Our team members undergo an extensive period of training and mentoring before working independently with clients.

Outsourcing

A variation of the previous strategy is outsourcing, that is, transferring part of the work for seasonal services to professionals: courier service, call center, SMM agencies, and so on.

Vacations

Vacation periods should only be arranged during the low season. This way you can reduce costs for employees, as well as some indirect costs: electricity, tea with cookies, toilet paper, in the end. We had a funny period when it felt like toilet paper was just being flushed down the toilet. Here's a pun. After one of the employees left, the balance was restored.

Nowadays, even in many large enterprises, it is becoming common practice to give vacations only in certain months. What can we say about small and medium-sized businesses, when any expense can hit your pocket hard.

Development

Now - during a period of calm - is the time to start developing your business: analyze weaknesses, review business processes, test new services and prepare as much as possible for the next high season.

Take into account demand factors such as seasonality for products when planning your business and promotion strategy.

Currently, in a fiercely competitive market, every entrepreneur relies only on his own resources and capabilities. Hoping to earn maximum profit, many businessmen rely on seasonal sales. And this is quite justified, because, as marketing statistics show, sales volume is directly related to a short-term rise or decline in consumer activity. Such fluctuations in consumer interest are usually called seasonality.

Seasonality is periodic changes in the demand for a product, depending on certain factors, usually the time of year. However, seasonality is not always tied to any single factor. We can talk about the presence of seasonality only in the case when the maximum peak and decline in product sales is observed for 2-3 years in a row, and the difference in the cost of the product at the peak and decline in sales is 30-40%. Typically, the seasonal cycle is 12 months, although significant fluctuations in demand can be observed within one week or one day. However, such changes in consumer demand are not considered seasonal, since no additional measures are required to equalize demand. It is enough for an entrepreneur to understand these market features and take them into account when planning business.

Types of seasonality

As a rule, there are two types of seasonality:

production;
consumer.

Demand for goods classified as seasonal depends on natural (climatic) factors. Classic examples of production seasonality:

growing and selling fruits, vegetables and berries;
earthmoving activities;
work on landscaping garden plots.

However, it is worth noting that production seasonality related to the cultivation of agricultural crops is smoothed out due to the development and improvement of technologies for processing, storage and procurement of products, as a result of which the entrepreneur has a unique opportunity to sell his goods throughout the year.

Consumer seasonality is directly related to the following important factors:

It is no secret for entrepreneurs that coping with the challenges of seasonality is very difficult. This task requires additional financial investments, which many companies cannot afford. Only a self-confident entrepreneur who has a well-thought-out business plan and has sufficient funds to resolve this issue can take such measures.