Are we in a recession? According to a recent Forbes article, our most significant economic minds can’t agree.
However, most Retailers would say we are and need to recession-proof our business. So how do we recession-proof the retail business? The best solution is to improve our inventory management! After all, inventory is a retailer’s most significant asset and expense.
Retail inventory management aims to ensure stores always have the right products in stock to meet customer demand while minimizing inventory costs and reducing the risk of overstocking or understocking. Inventory management involves various activities, including assortment planning, OTB, Item Planning, stock replenishment, and sales forecasting.
Macy’s had success with inventory management in 2022. They adjusted their assortment by omnichannel and reviewed the timing of their receipts. This change in their planning process resulted in a significant reduction over 2021; more importantly, it reduced the typical department store buying mentality.
Another technique used in retail inventory management includes holding back some OTB dollars based on sales forecasts and markdown optimization. This holdback helps retailers identify changing trends in customer behavior and preferences and then quickly adjust their inventory levels accordingly. For example, Kohl’s department is learning from its mistakes of 2022 and making changes to its markdown and OTB strategies.
Effective retail inventory management requires data analysis, current technology, and human expertise. By leveraging these tools, techniques, and resources, retailers can achieve greater efficiency, accuracy, and profitability in their inventory management processes.
Related Product
daVinci Assortment Planning
daVinci’s Assortment Planning solution transforms the way retailers manage their buying process, improving efficiencies, so merchants get back time to be merchants.
