Understanding Your Inventory Needs
Remember that one time when you excitedly opened boxes of new arrivals only to find items that were already gathering dust in your backroom. Now, that's a fashion retail facepalm moment. If you're a seasoned retailer or just starting out, it's probably clear by now that running a successful business means being acutely aware of what your store needs, and stocking accordingly.
For this exercise, letās go down memory lane and recall those times you either over or understocked. Did they leave your customers unhappy because there were too many options to choose from. Or did you feel like a deer in headlights because you could never get the right sizing for everyone interested.
For smaller brands, it could even be something as simple as overestimating how many pieces would actually sell for their first collection drop. It seems like an easy way to get started is by tracking what's selling and what isn't. This way, you know exactly what inventory needs to be restocked and which ones can be paused for a while.
Don't forget to take customer feedback into account too. This insight can help with optimising your inventory as well as forecast trends more accurately. All it takes is more or less some careful planning and thoughtful actioning to ensure thereās something for everyone - including yourself and the business.
Implementing Just-In-Time Inventory
Thereās nothing worse than not being able to fulfil an order or sell a product to a potential customer because you have run out of stock. Yet, overstocking can be a problem, too. Having products take up your resources or even expire without being sold is not something you want as a business.
Thatās where Just-In-Time Inventory comes in. This method of inventory management focuses on receiving the goods you need from your suppliers only when needed. Seems simple enough. But if your timelines donāt match up, and if there are seldom delays along the way, your JIT model could fail.
Which is why a good system for automating orders and tracking shipment progress is necessary for this to work out for you in the long run. JIT inventory management requires collaboration and communication between you, your supplier, vendors or storage facility as well as your customers. You will need to analyse and understand their patterns or create benchmarks with them so that everyone is on the same page. If that doesnāt happen, you may find yourself in a situation where you donāt have the products you need when someone tries to buy them from you or place an order with you.
But once you have worked out the kinks in terms of using automation software and setting benchmarks between stakeholders, your system will become more efficient and dare I say unstoppable. And who doesnāt love efficiency.
Leveraging Technology for Stock Management
You know those days when youāre looking at three spreadsheets, five columns and not a single clue if youāre about to understock or overorder. Iāve been there. Managing inventory by hand was already a drag before tech started popping up everywhere - now itās just outdated, if Iām honest. There are kind of programs out there that can easily integrate with your current system, manage your entire inventory and provide real-time updates on orders placed and items left.
If youāre not on it, you probably should be. The right technology will automate your day-to-day operations and increase your accuracy in calculating demand, stock levels and even costs. If you have an online store, it can also link your inventory data from across multiple sales channels in one centralised platform so nothing slips through the cracks. Some tools also have predictive analytics that help forecast demand based on historical trends so youāre not shooting darts in the dark while ordering stock.
Tracking patterns of sales across different months of the year and different types of products makes it easier for you to anticipate high-traffic periods or know what products need scaling up. It seems like it also keeps your product costs under control because it knows exactly how much is being consumed - so forecasting spending is more accurate too. This may sound like a dream but I promise, itās not as hard as it sounds to set up.
Streamlining the stock management process means increasing efficiency in replenishing bestsellers and reducing dead stock - all while reducing human error. There are options to choose from based on complexity too, so even if your business isnāt an enterprise-level operation (yet), there are simpler tools made for small businesses or even those starting out by bootstrapping with eCommerce platforms like Shopify or BigCommerce.
Regular Inventory Audits and Assessments
That sense of panic when you realise you have ten times the number of size 8s but not a single 10 left. Or worse, you start writing down an inventory that may as well be in Russian because it makes absolutely no sense to you and now you have to go down the rabbit hole that is not knowing what you have in stock. Whether itās a spreadsheet gone wrong or a disgruntled employee who thought making up numbers would be fun, an unreliable inventory system can reportedly mean a businessā demise. If thereās one thing that comes from years of experience, itās that inventory audits are absolutely essential and should become a weekly or monthly part of your business routine.
These regular checks help businesses validate their stock, identify discrepancies and prevent fraud or losses by employee theft. And yes - people will steal from you. But donāt rely solely on spot checks - a full audit where every single item is quite a bit accounted for can save time, money and some really awkward conversations.
If youāre still using pen and paper or even something as basic as Excel for your inventory - these donāt typically integrate with sales so itās best to get with the times, right. Inventory management systems can help keep everything in one place without giving you the headache of manually inputting every last detail. One thing Iād recommend though is to train your employees on how to use these systems efficiently so they donāt mess things up while inputting new information.
After all, audits can only be useful if theyāre accurate and show exactly how much is in stock at any given time.
Forecasting Demand Accurately
You know that feeling when you pop into your storeroom and find a mountain of tops that seemed like a good buy three seasons ago. Thatās the problem with getting forecasting wrong. Seems like such an easy idea - anticipate what sells, stock up, sit back and watch the tills ring. More or less.
But I think anyone whoās ever worked in fashion retail will tell you this doesnāt happen often. Demand for some products is obvious - formal wear during wedding season or warm clothing just before winter. More or less. But then you have those pieces that were supposed to be bestsellers but have been languishing on racks for months.
Plus, the pandemic threw all previous models out of whack with consumer behaviour becoming a whole lot more unpredictable. In the last few years, even fashion stalwarts have gotten it wrong sometimes. Sort of. The solution I hear many managers talk about is making use of sales data and analytics to predict future demand.
There are specialised tools available now that can take into consideration current trends, market shifts and historical purchases to recommend seasonal buys and quantity estimates. If your brand has multiple outlets in different cities or geographies, these tools can factor in climate and local festivals or events to help make decisions. The one thing Iām always wary about when it comes to technology is how much it relies on data collected previously - which isnāt always relevant or useful for predicting future trends (especially after COVID). A healthy mix of experience-driven insight from your merchandising team, coupled with new-age analytics is probably the way forward.
Strategies for Reducing Excess Stock
Thereās a spot in the storeroom where the stock keeps building, no matter how many times you walk past and tell yourself itāll shift. Like an ominous pile of hangers in the back left, gathering dust. More or less.
Weāve all had a moment of panic looking at that big stack of excess stock after a season has ended - especially if you were convinced people would go nuts for that trend. There are ways to deal with it that don't involve deep discounting or donating (although sometimes both those options have their uses). I am all for a pop up sale or a collaboration with another business to offer ābundlesā that use up overstock.
For some businesses, this may look like offering three items for the price of one. For others, it could be using other online channels to offer the same stock at a different price point to move it out of the main inventory - while still making some money on it and not deep discounting. Another way to tackle the looming issue is to offer staff incentives for high ticket items that may be last in season, or trying something like hosting an event where people are free to try on whatever they want - and get some extra love from you as a brand with little add-ons.
This works especially well if you have deadstock left over from previous launches that might feel relevant again now. Keeping your customers engaged and on your site longer is another way to get them to buy more. Some brands offer multiple payment methods so there are no mental roadblocks for the customer.
Others suggest an additional product before checkout that's related to what they've already added to cart. I've even seen stores ask customers if they'd like free products once they have met a certain cart total - to get rid of excess stock in a positive way that's good for business and makes for happy return customers.