All Dressed Up with Nowhere to Go: Reopening Retailers’ Inventory Dilemma
Retailers reopening their doors this summer are facing many store operations challenges; not least among them is addressing unsold inventory. From sporting goods, to home goods, beauty, and especially apparel, merchandise across categories was left sitting in warehouses and backrooms when non-essential retailers shuttered their doors this spring.
Social distancing didn’t just close stores, it also meant that consumers stuck at home had fewer reasons to purchase non-essentials. For example, in March clothing sales were down as much as 90 percent, leading to an 11-year high in the inventory-to-sales ratio. Different retailers are taking different approaches to righting this ratio, but they all require fast implementation and consistent store execution.
Strategies for Dealing with Unsold Inventory
As we move through the first phases of recovery, retailers need to clear out their old inventory, reset stores for the summer, and make room for new stock. So, what are the options for moving unsold stock?
- Sell Off Inventory in Bulk – This inventory obstacle may actually be a boon for off-price retailers, as their full-price peers liquidate unsold stock to resellers.
- Store the Basics – For some retailers, the best option may be to hold on to their inventory. Basic items are out of season now, but can still be sold for full price next year.
- Stock the Clearance Rack – Moving into the start of summer, many retailers would normally be planning seasonal sales; this year these sales will be bigger and better than ever.
- Expanding Clearance Concepts – Some retailers are even experimenting with new discount concept stores or store-within-a-store approaches to deal with the unusually high volume of leftover inventory.
Supercharging Summer Discounts
No matter what other strategies retailers employ, sales events will play a big part in moving this inventory surplus. As more and more places reopen, many consumers are excited to get out and about and make up for lost time. Major summer sales are not just an opportunity to clear out stock, they’ll also be a major draw for customers ready to return to normalcy.
Fast execution will be key to making these sales a success. There’s only a short window between when stores are able to reopen and when summer sales need to be ready to go. To execute engaging, effective summer clearance and promotional events, store associates will need to implement prices changes, manage inventory, and reset displays, end caps, and store sets—quickly, cleanly, and precisely.
Execute Consistently Across Every Store
This is a tall order for many stores, as store managers and associates are already juggling new health and safety processes, new fulfillment and service models, and other store operations challenges. Intelligent, prioritized communication and task management will be key to executing summer clearance events and clearing out this inventory backlog.
Real-time, mobile-first store execution solutions enable corporate merchandisers, marketers, and other stakeholders to create step-by-step visual projects for sales events and distribute them to relevant stores, ensuring adequate in-store workload capacity to get projects completed on time. Associates are then able to see assigned tasks and activities, making it simple to efficiently execute promotions.
At the same time, store and field managers gain real-time visibility into task completion. This visibility enables managers to validate that summer sales are executed correctly and empowers them to manage by exception. As a result, when a customer steps inside the store, they find enticing, well-organized displays, driving sales of both leftover inventory and new stock.
Reflexis is dedicated to simplifying store execution! To learn how our real-time task management and visual merchandising solutions can help, contact us at firstname.lastname@example.org.