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7 Ways to Avoid Excess Inventory in the Holiday Season

Brands can take steps to avoid carrying excess inventory into the new year.

For retailers, the holidays can be a stressful time. Keeping up with the increase in demand can mean longer work hours, a chaotic store and difficulty in achieving effective retail inventory management.

Unfortunately, many brands cannot properly manage demand or optimize inventory, leading to a lot of unsold products sitting in stores and warehouses. In fact, unsold inventory costs the U.S. retail industry an estimated $50 billion a year.

Put simply, excess inventory is expensive. Dead inventory negatively affects your profit margins and cash flow by tieing up working capital, taking floor space away from more popular products and increasing storage costs.

Brands can take steps to avoid carrying excess inventory into the New Year and incurring all the related costs.

Sell on alternate channels

Brands can explore new selling opportunities to expand their visibility, reach new customers and capture additional sales. As consumers begin their holiday shopping, your brand needs to be where the customers are. Retailers that can’t provide their customers with a cohesive experience across multiple channels will lose out on potential sales.

Using an online marketplace such as Amazon not only improves your overall online presence but also allows customers to browse and purchase your products at their leisure, beyond your physical store hours. Being present at multiple steps of their buying journey gives you more touchpoints to influence their decision and encourage a purchase.

A pop-up shop in a new location can attract new customers and make your brand more accessible to existing customers. Even better, pop-up shops create a perception of urgency and exclusivity, a feeling that may not be achievable at your regular location.

Organize your floor space

To make the buying experience as enjoyable as possible, your store layout should be simple to navigate. Busy shoppers may not have the patience to hunt through a crowded store to find the specific product or bargain they’re looking for. To lessen some of the chaos, brands can use their retail inventory management and sales data to predict the seasons most popular products and place those at the front. Slow-moving inventory can be moved by the cash at a discounted price to encourage impulse buys.

Bundle products

Bundling products is a great option to clear inventory while keeping a relatively high-profit margin. You can make slow-moving inventory seem more attractive by bundling it with in-demand products, bundling the same unit at a discounted price, or with complementary products.

By leveraging the popularity of other products, or advertising the price discount for same-unit bundles, shoppers will perceive the bundle as a bargain and will be more inclined to purchase.

Get into the holiday spirit

During the holiday’s customers are pressed for time and pressed for cash. Understanding their needs and offering resources to make their shopping experience easier can be the difference of whether they purchase from you or from one of your competitors.

Free gift wrapping can be a great value-adding service and incentivize customers to purchase more than they planned to. Brands can also simplify their decision-making process by creating holiday gift guides. Gift guides can be a great way to alert customers of the products you carry and a great opportunity to remarket and reposition some of your slow-moving inventory.

Run holiday promotions

The most obvious way to clear out inventory is to discount old stock. Holiday promotions can be a successful incentive for customers to visit your store and purchase in bulk. Using your existing customer information and inventory data, you can curate the sale items to fit their tastes and promote the sale through email or social media.

To learn more about the importance of holiday sales, click here.

Liquidate remaining inventory

If you’re looking to just get rid of your inventory, liquidation is an option. While your profit margins may suffer, liquidating can remove your inventory quickly and reduce your overall inventory costs.

Donate to charity

If all else fails, you can donate your excess inventory to charity— it is the season of giving after all! Fortunately, this can be a win-win situation for both parties, as the charity receives a much-needed donation and, on top of your improved brand image, donated items can be eligible for tax rebates.

During the holiday season, businesses need to be able to balance and optimize their retail inventory management to make as many sales as possible without having excess inventory left over.

From bundling to donating, these strategies can help you juggle the demands of the holiday while minimizing your inventory costs!


Published: 12/7/2018