In case you missed my article in TotalRetail, here it is.
As the calendar turns toward September, shorts, shirts and swimsuits must make way for sweaters and slacks in retail stockrooms. But with consumers everywhere staying home, some retailers’ inventories may be bursting at the seams with backlogged products.
Whether they’ve slowed their buying to keep balance sheets in check or are simply reaching the end of their supply of seasonal items, retailers are facing unprecedented inventory challenges, and getting those last few items out the door as efficiently and profitably as possible has never been more important. Furthermore, as the current environment forces impromptu closure of individual stores and malls to thwart exposure to confirmed cases, getting to those precious last few items may be tougher than ever. From motivating prospective shoppers to rewarding return customers, here are three essential strategies to help brands erase their backlogs:
What should retailers do with inventory in their closed stores? Can digital sales data be incorporated into inventory management on a brick-and-mortar level? How should brands prepare for seasonal inventory changeovers? The only way to successfully manage all these unprecedented challenges is through the clarity of omniscience. To avoid further issues and keep up with demand, retailers need real-time visibility to know precisely where and in what quantities their products reside in stores and warehouses.
Operational agility and knowledge are the name of the game. Retailers must be able to shift at a moment’s notice while seizing opportunities to improve their inventory operations. For many, the most sensible option is to invest in technology that helps automate inventory and order management processes, allowing workers to focus on creative sales and other strategies that require a human touch.
Retailers need to incorporate "event" sales to get distressed inventory out the door — from once-a-year blowouts to private events for top customers. Stores are utilizing heavy promotions and branded event sales to entice customers and drive purchasing, but clearance and markdowns are also integral in the inventory cycle as well as in generating revenue. It's imperative that retailers fully understand the difference between promotions and clearance, where their inventory falls in these categories, and the marketing budget and bottom line repercussions of each.
Retailers should opt for event sales to help rid themselves of distressed inventory at a rapid pace without getting shoppers accustomed to constant discounts. Conversely, markdowns can be instrumental in moving unproductive inventory amid these challenging circumstances while drawing discounts from a separate budget. Once sales are live, collecting accurate, real-time data could be the key to unlocking smarter sales targeting. In order to preserve margins, retailers need customer intelligence to help them decide when and where and to whom they should offer discounts.
Retailers can’t forget about the epicenter of any business strategy: the loyal customer. As consumers adapt to changing times and shift their buying habits, it's imperative that retailers listen, understand and act on the changing demands of today’s shoppers.
With consumers trying new brands at increasing rates, it’s more difficult than ever to retain loyal customers over the long haul. Returning shoppers are a key demographic for distressed inventory, and retailers can leverage their insight into these customers’ preferences to offer them personalized and exclusive in-store or online shopping experiences.
Whether it’s limited-stock items, private shopping events, special discounts or generous rewards, selecting the right, targeted approach to customer retention could make the difference between a tidy storeroom and a warehouse full of aging product.
With the help of the right technology and some diligent strategy, retailers can successfully deploy a variety of tactics to work through excess summer inventory. By implementing innovative inventory management, standout sales and customer engagement, retailers can clear their backlogs and look ahead to next season.