Don’t want to lose money during high traffic seasons?
It happens to every retailer. You suddenly see demand ramp up and your shelves aren’t able to meet that demand. Customers leave empty-handed.
Or…
You have TOO much inventory on hand. Margin killing purchases sit on shelves that should be selling.
Here’s the issue…
Seasonal inventory can be one of the hardest challenges to overcome. Proper inventory preparation can be the difference between your store winning and losing money.
The good news is that there are tools and options that can help you. Technology and AI powered inventory optimization can help you finally get ahead of seasonal inventory crunch time instead of reacting to it.
What you’ll learn:
- Seasonal inventory problems
- Biggest seasonal challenges
- Smart tech = solutions
- How to create a seasonal strategy that works
Seasonal Inventory Problems
Seasonal Sales doesn’t start and end with Christmas and Cyber Monday.
Expect sales trends to fluctuate throughout the year based on the season, weather, holidays, social trends, etc. Therefore creating this gap of not having too little inventory or too much.
Statistics show:
Retail managers are already feeling the pressure of seasonal inventory. Chain Store Age says 76% of retail managers have experienced higher levels of stock outs (empty shelves). Yikes! Especially during peak seasons.
But it doesn’t stop there…
In order to avoid stock outs, some retailers will order too much inventory to play it safe. Which leads to dead inventory that you’re forced to mark down to sell.
Don’t fall victim to this common issue. A smart AI inventory management platform can help you avoid these problems by accurately predicting demand.
Biggest Seasonal Inventory Challenges
Okay, now let’s breakdown each pain point that retailers experience:
Poor Demand Forecasting
Seasonal products don’t forecast well with traditional models.
Why? Because they aren’t sold year-round. So you can’t use typical year over year stats to predict demand.
Take winter jackets for example. If it’s a warmer winter than normal your sales will plummet. But by then it’s too late. The season has passed you by.
Stockouts – Empty Shelves
Running out of stock during peak season is bad for business.
Not only are you losing out on the sale of that particular item. But now you’ve also lost that customer to go buy it somewhere else.
According to AllAboutAI Artificial Intelligence inventory management lowers the rate of out of stock by 78%.
That’s a big deal if your storage solutions are lacking.
Overstock and Mark Downs
The same can be said for ordering too much seasonal inventory.
You’re:
- Tying up cash flow
- Paying to store it
- Worried you won’t sell it in time
And when the season is over you’re forced to mark down everything just to sell it.
Mark downs equal loss of margins.
Inaccurate Supply Chain Lead Times
Lead times have never been more unpredictable.
Shipping costs fluctuate during peak season. Products have the potential to get stuck in port. Storage fees are more expensive.
When one delay happens it sets off a chain reaction of events that can disrupt your seasonal strategy.
Forecasting these issues and having visibility into your supply chain will help you solve these issues.
Returns Processing
Peak seasons = More returns
Not only is your store working overtime with higher traffic. You now have to process returns and figure out what to do with the returned inventory.
Ideally you can restock products but that isn’t always the case. Formatting returned items into your inventory is a challenge during peak seasons.
Smart Technology = Solutions
Okay, solutions time!
Thankfully AI powered inventory optimization is here and it’s game changing!
Instead of using gut instinct and boring ole spreadsheets, smart inventory tech can help you utilize the vast amounts of data that your store collects to predict seasonal trends and demand.
Here’s what smart tech can do:
With advanced intelligence and automation you’re able to:
- Use predictive analytics that take weather, local events and historical data into play.
- Have access to real time inventory visibility across all channels and locations
- Automate your replenishment so it adjusts to spikes in demand
- Receive dynamic pricing suggestions to help you meet your margins
Specialized algorithms assess hundreds of factors most retailers don’t even know exist. Catching trends earlier and adjusting forecasting as needed.
Creating a Multi-Channel Strategy
Seasonal strategies should work across all channels.
Whether that customer is shopping online or in-store your inventory levels should reflect that. If a customer buys online for store pick up those items need to update across the board.
Implementing technology that flows through every channel and location used to take weeks and thousands of dollars in IT spending. Cloud-based platforms have changed that.
Seasonal Prep Starts Earlier
We’re seeing a trend of seasonal preparation starting earlier each year.
Instead of waiting until November to start loading up on holiday inventory. Many retailers are spreading those costs and purchases throughout several months. Nudging into Q4 rather than crushing it all at the end of October.
Accurate long-term forecasting is essential to make this work. As is scaling your inventory up or down as the season progresses.
Creating Your Seasonal Inventory Action Plan
You’ve made it this far. Now it’s time to take action!
Step 1: Review previous years seasonal data.
Take a deep look at how your store performed during previous seasons. Which items sold through? Which items should you have ordered less of?
The more seasons you compare, the easier it will be to spot trends.
Step 2: Mark your calendar.
Once you’ve identified the holidays or events that impact your sales. Mark your calendar and start planning ahead.
For some that could mean starting in January. Others may have additional seasonal trends that trees pass.
Step 3: Upgrade your forecasting methods
Spreadsheets aren’t going to cut it.
Look into AI software that can analyze more quantitative and qualitative data.
Step 4: Communicate with your suppliers.
The better relationship you have with your suppliers, the more likely they are to work with you if you suddenly see a spike in demand.
You’ll also want to make sure you have a plan for returns. No one wants to be bogged down with returned inventory after a major sales season.
Conclusion
Seasonal inventory will continue to be a battle every retailer fights. But that doesn’t mean you shouldn’t be armed with the best weapons possible.
Technology and AI powered inventory management can help your business:
- Lower the chances of running out of stock during peak seasons
- Reduce excess inventory
- Quicker response to demand
- Increase customer satisfaction
Once you’ve mastered your seasonal strategy, you’ll leave your competition in the dust.
