Excess inventory is one of the main challenges facing many marketers during the holiday season. So how can marketers manage the inventory throughout the peak shopping season? Here are some quick solutions shared by Roy Avidor, CEO and co-founder at Cymbio.Â
The holidays are a time for family, friends, and spending. But for brands, it is also a time for excess inventory. While a robust inventory is important during the holiday season, having too much can cause unwanted financial stress on brands. This year, according to The Washington PostOpens a new window , brands are sitting on a record $732 billion worth of excess inventory.Â
To avoid being stuck with unsold inventory and incurring unwanted costs, brands must be strategic about managing overstock throughout the holiday season.Â
Here are some of the challenges brands face and how to overcome them.
Inventory ChallengesÂ
New products, shipping delays, and over-estimating inventory needed for the holidays based on demands from previous years have created the perfect storm for excess inventory across industries this year.Â
Responding to supply chain demand and inventory shortages that became widespread in the earlier stages of the pandemic, brands found themselves ordering inventory en masse. Some retailers, such as Walmart,Opens a new window saw their inventory swell by a large percentage. This has created a situation where merchants find an overwhelming amount of excess stock on their hands, leading to challenges such as tracking inventory, lack of warehouse space, rising storing and shipping costs, and difficulties in getting orders to customers who want them quickly.Â
Going into the final quarter of this fiscal year, it is essential to have a handle on managing your business’s excess inventory. While at the peak of the COVID-19 pandemic, lack of inventory and empty shelves dominated the narrative, a surplus of inventory is expected to be one of the biggest challenges this year. However, with solid advanced planning, creativity, and consistent inventory monitoring, it is possible to clear out the overstock this holiday season.Â
See More: The Future of Web3 and E-Commerce Strategy
Managing OverstockÂ
Here are a few ways in which overstock can be efficiently managed.
1. Sell overstock on other channels
Turning to a multi-channel sales strategy helps minimize excess inventory when a brand has an overstock of a product. Brands can rely on social channels or marketplaces to get excess inventory in front of a new audience and move it faster. It is also a great way to manage overstock because the brand can list the product at a discounted price while still making a profit. Selecting the right products to sell on specific marketplaces is a great way for brands to achieve growth and move overstocked inventory.
2. Offer discounts on overstocked items
Many brands offer discounts to help reduce overstock inventory. The most common method is to offer a percentage off the original price. The holiday season is a good time to offer steep discounts to shoppers to sell off some excess inventory.Â
3. Keep track of inventory levels
To manage overstock, brands need to track inventory levels to see exactly what items are available. There are a few ways to do this, but the most effective way is to use software that can keep track of inventory levels in real-time to help forecast inventory levels, gain seller insights, and view order loads. This way, brands can see exactly how much stock they have on hand and can make adjustments accordingly.
4. Run paid ads to target overstock
Brands can run paid ads to target shoppers looking for deals. Ads such as PPC campaigns can help identify what keywords shoppers are using to search for deals on overstock items. They can also use retargeting to reach shoppers who have visited their site but did not purchase anything. By showing these shoppers ads for the items they were interested in, the brand can increase the chances of making a sale.
5. Store it until demand increases
If you have the warehouse space available, storing overstock items for a future season can be a good way to manage excess inventory. Items that may not be selling right now can come back into demand at another time, such as seasonal items. Storing items will allow brands to hang on to most of their value and sell them closer to their original price point at a later date.
6. Turn overstock into something new
One way to move excess inventory is to find a way to repackage it to maximize its appeal. This could involve changing the color or design of the packaging or bundling items together with other products. For example, a brand could create a package of related items at an attractive price point and market it as a special holiday bundle.
See More:Supply Chain Issues Foster Retail Marketing Evolution To Bolster Consumer Loyalty
7. Start holiday sales earlier
Major shopping days like Black Friday or Christmas are no longer one-day events. With many brands offering steep discounts throughout the month of November and December leading up to Christmas and extending well into the New Year, using this additional time is a good way to move excess inventory.
When it comes to tracking inventory and managing overstock, brands will be able to lower storage costs, increase sales, and optimize efficiency by setting new habits like the ones above.Â
How a company manages its inventory during this year’s holiday season will set the tone for the new fiscal year and build the foundation for a successful 2023.Â
How are you managing inventory overstock this holiday shopping season? Share with us on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window .
Image Source: Shutterstock