Rethinking inventory to reach new levels of success: Treads ‘N’ Threads
Since 1998, this outdoor apparel store has been a Gunnison, CO staple. By 2020, however, owners Kelly and Chris Osness understood that they needed to rethink their inventory and increase cash flow.
In just six months, Management One and Retail Expert Carrie Watson helped them increase sales, reduce inventory, and create new opportunities for growth in spite of COVID closures and other disruptions.
Treads ‘N’ Threads succeeded for years on account of the passion and hard work of its owners, Kelly and Chris. Over time, however, they realized that their genuine passion for merchandise had led them to carry far too much of it. The only path forward, as far as they could tell, was to increase the store’s footprint in order to house more and more.
To make matters worse, their seasonal, tourism-driven customer base made accurate merchandise planning seem far too complicated, which led to them make huge bets on product that didn’t always move.
With so much cash tied up in inventory, the store began to hit financial challenges that Kelly and Chris knew could have been avoided. That’s when they reached out to Carrie Watson to make a new kind of investment in their cherished business, and the results speak for themselves.
Creating realistic targets
By analyzing the store’s past sales and accounting for Kelly and Chris’s goals, Carrie created an ideal class structure for their inventory. With proper categorization, it became much easier to see where they were over-buying, and where there was opportunity for growth.
From there, Management One and Carrie provided a 12-month sales forecast that fully and accurately accounted for the non-traditional sales cycle that comes with tourism-based clientele. This allowed Kelly and Chris to plan their inventory month-by-month, based on reliable estimates for their fluctuating traffic.
With proper categorization, it became much easier to see where they were over-buying, and where there was opportunity for growth.
Reaching new levels of success—during a global pandemic
All stats as of October 2020
Slowing down buying to increase sell-through
Once Kelly and Chris began to purchase based on sales projections by class (rather than relying on instinct), their average monthly inventory came down. In fact, in 2020 their inventory ownership went down by 29%.
With so much less inventory, one might be afraid of losing opportunities for sales. In fact, sales increased by 3.73% (comparing similar time periods for 2019 vs. 2020) despite store closures for COVID.
With less inventory, and increased sales, Kelly and Chris were able to focus on the freshness of what was on the sales floor, which in turn created new opportunities for selling more to repeat customers over time.
Sales increased by 3.73% (similar time periods, 2019 vs. 2020) despite store closures for COVID.
A new focus on sales and merchandising
As a result of lower inventory ownership, the sales floor at Treads ‘N’ Threads suddenly came alive. There was more space to move, more opportunities for visual merchandising, and a better experience for the customer.
Instead of commenting on all the cool stuff, customers began to talk about how easy it was to find what they were actually looking for. Older merchandise, which had previously been invisible due to the sheer volume of goods on offer, began to move—especially thanks to promotions designed to clear out long-held items
This new shift in priorities created new opportunities for training the sales force. Due to Carrie’s experience-backed strategic guidance, salespeople learned to ask more questions, sell what’s in stock, and guide clients to shop for the entire family. Selling metrics have increased as a result, compounding the transformative effects of Kelly and Chris’s dedication to data-driven merchandise planning.
Instead of commenting on all the cool stuff, customers began to talk about how easy it was to find what they were actually looking for.
Learn more about retail expert Carrie Watson
Carrie's passion is to encourage communal commerce by coaching retailers. Her mission is to help business owners and buyers find peace of mind by adding stability to their cash flow and encouraging sustainable operations.