Memorial Day Weekend has passed, marking the beginning of the summer season for many people. In the world of consumer packaged goods, this means a bigger emphasis on summer-related products, such as sunscreen, red solo cups, ice cream, hot dogs, updated packaging for the 4th of July, and even fireworks. 

In fact, the July 4th holiday is the peak season for many products. Whether you’re a manufacturer, wholesaler, distributor, retailer, or DTC business, you need to be ready for your customers’ increased demand in this seasonal category. 

By planning ahead and preparing in advance, you can avoid excess inventory after the holiday and capitalize on this important sales period. Today, we’ll review the difference between seasonal packaging and seasonal inventory, the impact of seasonal campaigns, and how to plan ahead to reduce excess inventory after the season.

Seasonal inventory vs seasonal packaging

Seasonal packaging is when companies will update their products’ packaging to be more closely related to a certain season, holiday, or event as a way to market their product and increase sales during that time period. For example, a snack brand may update its packaging to include snowflakes during the winter holiday season or footballs during the Super Bowl. 

Seasonal inventory is stock that is in high demand during particular times of the year, such as cranberries during Thanksgiving, sunscreen during summer, hot dogs around July 4th, or stationery products when children are going back to school. The packaging may be the same year-round, but the demand is inherently seasonal.

In both cases, these types of products will experience an increase in demand followed by drastically reduced popularity shortly after the relevant holiday or season. 

In terms of liquidation, many companies will take into consideration their seasonal packaging, but it’s easier to forget to take into account how their seasonal inventory will impact revenue.

Impact of seasonal campaigns

Capitalizing on seasonal products and packaging is a marketing strategy that most companies utilize. In fact, 42% of new product launches were seasonal in 2014. After all, the retail market is a highly seasonal industry, where seasonal products are often the most profitable items in your store. 

However, seasonal products and inventory can often be a hit or a miss, and a lot of excess inventory after a holiday or season is indicative of a failed seasonal campaign.

It’s important to be mindful that planning for seasonal inventory comes with increased upfront costs, including packaging and labor costs, and purchasing the new inventory in bulk. Additionally, consider the costs of storing your excess inventory if the campaign doesn’t do as well as you hoped.

Seasonal campaign mistakes

Let’s take a look at some of the common mistakes to avoid if you’re running a seasonal campaign:

• Don’t make the mistake of not planning ahead. Seasonality can be a tricky thing to plan for. While it’s fairly easy to predict when the 4th of July or Labor Day will fall, seasonal products and inventory can be dependent on other factors such as weather conditions and supply-chain complications. You’ll want to establish guidelines and deadlines before your customers begin expecting deliveries of your products.
  
  
• Don't overestimate demand. There are plenty of reasons why demand might exceed expectations, but these are few and far between compared with instances where demand ends up being lower than anticipated (which means there will be some leftover stock). It's important not only from an operational standpoint but also from a financial one—you don't want all those extra costs weighing down your bottom line unnecessarily!
  
  
• Don't overspend on packaging design and implementation. While attractive packaging is certainly part of what makes consumers choose one product over another (sometimes even subconsciously), don’t go overboard here! You should always look at different options first before deciding which ones would best suit both your needs as well as those of your customers.
  
  
• Don’t focus on a too-specific holiday. For example, if you put Christmas trees on your packaging and you have a lot of inventory left after Christmas, you won’t maximize your value recovery as well as you would if the packaging had more general winter season imagery such as snowflakes.
  
  
• Don’t update your packaging so much that it’s unrecognizable to your customers. For example, Coca-cola updated their cans to white for their Arctic Home campaign which ended up receiving backlash when customers mistook the updated packaging for Diet Cokes. A mistake like this isn’t only costly and impacts your brand, but can pose risks to consumers who rely on packaging to identify dietary needs, such as sugar-free, low-fat, or diet versions. 
  
  
• Don’t make the mistake of not having a plan for excess inventory. If you're producing any type of seasonal product, it's important that you have practices in place for dealing with excess inventory when seasons end or demand drops off unexpectedly.

Successful seasonal campaigns

Now that we know what not to do in planning your seasonal campaigns, let’s review how to make sure you have a successful campaign:

• Successful seasonal campaigns involve sales, discounts, and promotions. Promotions should be planned ahead of time so that you can line up with your brand identity and ensure that the promotion aligns with your goals for each new season. For Pride month in June, Skittles updates their product to be gray to support the only one rainbow that matters. This year, they are adding to their campaign by working with artists in the LGBTQ+ community for the packaging designs and including QR codes to learn more about the artists and educate further. You might also want to run an end-of-season sale so that people will purchase your seasonal products or inventory at a discount before the season rolls around again the following year.
  
  
• Make minor changes to the design of your products; don't make any drastic changes that cannot easily be removed later on. For example, ribbons, labels, bottle neck hangers, and hang tags can be removed after the holiday, event, or season so the product can be sold as normal.
  
  
• Market your product as limited edition, if applicable (for instance: "Backyard BBQ", "Patriotic Picnic Set"). 
  
  
• Use seasonal themes or colors instead of holiday-specific imagery. For the 4th of July, for example, try using sun or beach imagery vs. fireworks and red, white, and blue colors. This will extend the shelf life of your product well after the 4th of July holiday. 
  
  
• Get creative. Just because your product has a slow season doesn’t mean you can’t take a chance. Take a page out of Kleenex’s book - during their slow summer season, they updated their tissue packaging to look like fruit slices resulting in brand new customers without cannibalizing sales on their regular packaging.
  
  
• Consider adding value to your seasonal product or packaging by making the packaging reusable, which allows your brand logo to remain on your customers’ minds. Or, you can take a page out of Nutella’s strategy and offer personalized packaging.
  
  
• Think outside the box - literally. Instead of focusing on how to change your product’s packaging, think of different ways you can interact with your customers. For the Hollywood movie award season, Kraft Heinz led a successful “Heinz on Film” campaign that encouraged fans to find movies that featured a Kraft Heinz ketchup bottle. Kraft Heinz gave away free ketchup to participants and the campaign resulted in 52x the engagement on social media, increased household penetration, and increased positive brand sentiment by 350%.
  
  
• Lastly, it’s important to stay mindful of local conditions. For example, in some areas of the country, it will get warmer later and the customers may not be ready for BBQ supplies as early as in warmer states.

Preparing for the 4th of July

Being thoughtful of your 4th of July packaging and inventory strategies will reduce the amount of inventory you have leftover, therefore helping you save money.

However, excess inventory is inevitable - whether it’s seasonal or not and even with a successful seasonal campaign. Therefore, it’s a good idea to make sure you have a solid liquidation plan in place as the 4th of July holiday is quickly approaching in a month. 

Discount retailers and wholesalers will buy the excess inventory from you at a lower price and sell that product to a different audience. They may also be interested in purchasing some of your overstock products at the end of their season, before the end of their season, or at any other time during the year.

You might not want to sell all of your excess inventory at one time because this could hurt sales to primary retailers. It is important to consider how much stock is left when making decisions about how much to sell through liquidation channels and when it needs to be sold by. 

As you can see, there are many ways to reduce excess inventory. However, as excess inventory is inevitable, it is critical that your organization has a network of secondary buyers to sell to, tools in place to automate the liquidation process, and understand the logistics of dealing with excess inventory.

To read about trends in the grocery and food industry, check out Spoiler Alert's latest E-Book:

The State of the Food Supply Chain.