Smart Solutions for Handling End-of-Season Excess Inventory
You’re not alone with end-of-season excess inventory: almost 60% of retailers still face excess inventory problems after the holidays (KPMG).
To counteract this effect, retailers have been refocusing on how to optimize their stores and their data to handle slow-moving products. In fact, investing in an efficient Inventory Management Software was one of the top three investment priorities for retailers in 2024.
Find out three smart solutions for handling end-of-season excess inventory and how retail POS systems come into play.
1. Leverage Your Data to Handle Excess Inventory
Before anything else, make the most of what you’ve experienced using your data.
Utilize your historical sales data to predict demand: by looking back on past sales performance, you can identify patterns in consumer behavior and see how similar products perform during previous seasons. Also check on industry and local seasonal trends to predict which products will be most in demand.
Then it’s all about refining ordering, tracking and stock replenishment. Thanks to historical data, retailers can predict the optimal quantities of products to order and when to order them. Fine-tune your ordering and replenishment strategy by using real-time sales tracking to gain visibility over your stocks throughout the season and reduce the risk of excess stock when the season ends.
2. Price Smart & Offer Promotions In-Stores
Offering prices and promotions to attract customers and boost sales of slow-moving products is key to get rid of excess stock at the end of season:
Implement dynamic pricing strategies to adjust prices based on demand, seasonality and stock levels simultaneously.
Create bundles of complementary products to encourage customers to buy more while clearing out excess stock.
Organize end-of-season promotions to create a sense of urgency and motivate customers to make their purchases before it’s too late.
Personalize your offers with exclusive discounts on overstocked items to reward loyal customers and encourage repeat purchases.
However, finding the right markdowns, for the right products, to the right customers, isn’t an easy task. To maximize these strategies, retailers can rely on intelligent inventory management software that can support efficient inventory forecasting and setting up prices and promotions to ensure they are targeted and relevant in clearing excess stock while protecting margins.
3. Prepare Your Store to Minimize Excess Inventory
To avoid excess inventory, do not underestimate the importance of using the display and layout of your physical store(s).
Optimize your visual merchandising to highlight products which need attention. Creating eye-catching displays placed in high-traffic areas will attract attention and encourage purchases. Tailor these displays to be seasonal or in anticipation of future events to make excess inventory feel fresh, timely and relevant. Here, IMS can assist in determining when and how often to refresh displays based on real-time sales data and store performance.
Also apply clear signage that advertise sales, clearance events or bundle deals prominently in-store: visual cues like “Limited Time Offer” or “Special Sales” catch the attention of customers and encourage immediate purchases to reduce unwanted stock.
The Takeaway
By leveraging data-driven insights, implementing smart pricing strategies, and preparing your store for successful end-of-season promotions, you can effectively clear excess inventory without sacrificing profitability.
The baseline to optimizing each of these strategies is for retailers to adopt a comprehensive, integrated approach to forecasting and inventory management for maximum seasonal profitability.
To find out how Management One can help you optimize inventory planning with advanced tools for demand forecasting and sales optimization,get a free consultation here.