How to Avoid the January Sales Slump at Your Store

Here are the best remedies for your shoppers’ holiday spending hangover.
Post-holiday retail sales tend to keep your inventory stagnant, but you don't have to let it hit your bottom line. (Photo: Creative Lab/Shutterstock)

Customers are quick to open their wallets around the holidays. But come the new year, a spending hangover sets in — even though your store still needs to move merchandise.

“There’s a natural decline after all the consumer spending in November and December. However, retail stores can stave off declines by capturing the post-holiday traffic when customers come in to make returns or redeem gift cards,” said Carlos Castelán, managing director of The Navio Group, a Minneapolis-based business consulting firm that works with retailers.

Wondering how to avoid the retail sales slump this January? Here are some creative ways to drive spending at your store after the holidays.

Stock up

Carlos Castelan headshot

“Retail stores can stave off declines by capturing the post-holiday traffic when customers come in to make returns or redeem gift cards.” – Carlos Castelan, The Navio Group (Photo: Carlos Castelan)

No one can buy much of anything if your shelves are bare. Make sure your store is brimming with a fresh array of merchandise in January.

“Ensuring availability of products maximizes the potential of making a sale or building a longer relationship with customers who may come back to your store to return or exchange gifts they received,” said Castelán.

Related: The Friend Zone: Boosting Sales by Focusing on Relationships

Consider stocking up on the products that align with customers’ needs this time of year. Since many shoppers are working on their healthy new year’s resolutions, for example, health-focused products like exercise gear, nutritious snacks and blenders are sure to fly off the shelves.

Put seasonal merchandise on sale

Seasonal merchandise can quickly turn into dead stock. Put your holiday products on clearance as soon as possible, said Castelán.

“Discounting seasonal products can maximize sales. It encourages a customer to purchase in the moment and clears out inventory to make room for new products,” he said.

The cost of products for the holidays will be fresh in customers’ minds in January. Capitalize on this by branding the sale as a way for them to get a bargain on seasonal items.

“You can get really aggressive with your discount, going as far as 60-70 percent off. Remind customers that it’s an opportunity to get a great deal on items they’ll need next year,” said Castelán.

Capitalize on returns and exchanges

Returns are an unfortunate reality for retailers after the holidays. But rather than begrudging them, look at returns and exchanges as a way to learn more about your shoppers and increase the potential for satisfactory sales.

“You really have to know who your customer is and understand what they want. Many people just want to exchange for different sizes or colors, so make sure you have inventory and knowledgeable staff who can steer the customer in the right direction,” said Castelán.

Train your staff to ask questions about why a customer is returning merchandise. Then, use their answers to help them find a product that fits their needs. Helping shoppers leave happy helps you avoid giving refunds, and boosts the likelihood that they’ll shop at your store again in the future.

Incentivize gift card spending

gift card

Develop a strategy to encourage shoppers to redeem gift cards. (Photo: Andrey_Popov/Shutterstock)

Chances are good that you sold a bunch of gift cards around the holidays. Develop a strategy that encourages shoppers to redeem their cards on products with a high profit margin.

“Think about ways you can create special bundles around things people might redeem their gift cards for. They might end up spending more if you offer a gift with purchase or another value add,” he said.

Related: Why and How to Offer Gift Cards

Offering a bonus provides an extra incentive for the customer to make the purchase that day, and allows you to avoid giving a discount that dips into your profits, he added.

Refresh your visual merchandising

Your store might look a little less than festive once you put away all the holiday decor. Give your visual merchandising some attention to create an enticing atmosphere for shoppers, said Castelán.

“It’s really important to make sure your store feels fresh, new and exciting so you can capitalize on the momentum of customers making exchanges. If they see the same merchandise displays they saw two months ago, they’ll be less likely to buy something,” he said.

Host in-store events

When customers are cutting back on spending after the holidays, you need to find new ways to compel them to visit your store. Hosting a series of no-purchase-necessary events will encourage them to stop by and maybe take an item or two home with them.

“The events should be less about selling products, and more about education, gathering socially and community engagement,” said Castelán.


“We are letting customers bring in old charm bracelets and we’ll turn them into necklaces or a belt.” – Diane Lloyde-Roth, L’Armoire (Photo: Diane Lloyde-Roth)

Diane Lloyde Roth, owner of L’Armoire in New Canaan, Conn., has found that hosting events at her boutique spurs sales in January.

“One year, we did a clothing update event, where customers could bring in things they didn’t wear often and we showed them how to style it or alter it. If it just wouldn’t work, we helped them donate the piece to Dress for Success,” she said.

“This year, we are letting customers bring in old charm bracelets and we’ll turn them into necklaces or a belt. It’s a great way to update an old fashion piece.”

Customers might be reluctant to open their wallets after splurging in December. But if you keep your store fresh and capitalize on returns, you can avoid a sales slump in the new year.

Related: 5 Year-End Tasks to Start Your New Year on the Right Foot

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