Holiday shopping outside Saks Fifth Avenue, NYC.


The holiday season is one of the biggest times of year for retailers. It is high-pressure and high stakes, as over 40 percent of annual retail sales occur during these few months. And the increasing complexities of the retail industry and the modern consumer create more factors than ever for retailers to consider when dealing with the holiday season, especially when it comes to inventory.

The decisions retailers make regarding their inventory during this period have the potential to turn a poor year into a successful one, or vice versa. But there are five suggestions in particular that retailers should do to ensure they make the highest profit and end the season with the healthiest inventory levels.

1. Understand Their Markdown Schedules for Better Brand Control

Each company has its own markdown calendar that has been honed to best maintain a strong cash flow and low inventory levels. This schedule can change in response to the fluctuations in the purchasing strength of the season. But retailers need to understand the repercussions of impulsively marking down their items, a frequent occurrence during the holiday season.

Once an item is on sale, it’s hard to put it back to full-price, as customers know they can get that item for less. And while markdowns are necessary in the retail industry, fully understanding the impact of these discounts will help retailers be more mindful and keep control of their brand image and price point to get the most inventory sold at the highest price.

2. Reconcile Inventory for Heightened Understanding of Product Supply and Demand

Inventory reconciliation is a daunting task to be certain, especially these days as products are being purchased, shipped, and returned across all channels — in-store, online and through mobile applications, shipped from both stores and warehouses — in every combination possible.

But knowing exactly what is in stock, where it is located, how long it’s been there and what items are moving/not moving is invaluable. A retailer’s worst fear is overselling product not available while simultaneously not selling product left in the warehouse. Understanding the level of supply and demand of products can put retailers in a strong position going into and during the holiday season to successfully sell their inventory.

3. Look to Secondary Sales Channels for Increased Allocation Options

Retailers should also look beyond their usual sales channels to secondary ones to move their inventory. These secondary channels can include global off-price retailers, global small businesses, e-commerce sites, mom-and-pop stores and even consignment shops.

For example, global markets all vary from each other in terms of product, demand, customer type and selling price-points. Items that may be out of season or not in style in the U.S. may be in high demand elsewhere, and selling these items through these secondary channels can reap a higher, maybe even full, price abroad. Being open to looking beyond the full-price e-commerce and bricks-and-mortar stores for sales channels can help retailers achieve higher profits and a better holiday season overall.

4. Update Backend Systems for Easier Inventory Reallocation

Selling inventory in secondary channels can be a challenge, as negotiation tactics can be different and the process more complex. Buyers look at product differently than full-price buyers and thus request different types of deal structures. In addition, all inventory needs to be tracked, priced and shipped, processes which also vary between “regular” sales channels and these secondary options.

But these difficulties should not steer retailers away from actually reallocating their inventory. Having up-to-date, robust backend systems in place to support the movement and pricing difficulties of these secondary channels can allow retailers to fully maximize the holiday season.

5. Streamline Inventory Management System for Better Communication With Buyers

The selling process for these secondary channels is usually done remotely, using spreadsheets, e-mails and other documents to convince buyers to purchase. Many retailers, especially those new to e-commerce, have few images of their products, and these images are usually scattered or hard to find.

Having a streamlined inventory management system including rich content such as images allows retailers to show buyers what it is exactly those buyers are purchasing. This better communication leads to retailers selling their merchandise at higher prices and ultimately making a better profit.

The holiday season is one of the most critical times of the year for retailers. Developing effective inventory strategies is key for all retailers and can help them optimize sales during the holiday season and throughout the year.

Ronen Lazar is the cofounder and chief executive officer of Inturn, a global B2B online software platform.

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