Selling ‘Scary’ Before ‘Merry’
Step into any big-box store right now and you'll find an impressive array of battery-powered jack-o-lanterns, "Frozen" costumes and candy sugary enough to warrant the lifetime silent treatment from your childhood dentist.
In a few weeks, bristling electronic turkeys will replace the bristly witches’ brooms, and shortly thereafter, the leaves will fall and faux snow will coat holiday displays. Snowmen will pop up where skeletons hung before, staying there until the year comes to a close with a big ball drop.
While effective inventory management should be a year-round priority, it's particularly important for retailers in the last three months, when holiday cheer brings festive shoppers to stores. Companies have expanded their product offerings for Halloween and Thanksgiving, but their bottom lines will suffer if they make costly inventory management mistakes. Here are the three best ways to manage seasonal inventory:
1. Brew the perfect inventory balance. It's not unusual for a product to sell out in a particular color or size (SKU) in one store while a nearby location has a surplus of that exact item. Imbalanced inventory is a lose-lose situation for retailers hoping to profitably make room for the next holiday's products.
Managing Halloween inventory is even tougher. What sells not only depends on what's trending nationally, but also local preferences. Each year brings new "hot" costumes, making it almost possible for businesses to forecast sales using historical data.
Poor inventory management results in lost revenue and steep markdowns — a double whammy for retailers. Out of stocks drive paying customers towards competitors, while surplus items sit on shelves until they're sold for less profit. Worse yet, it's too late to avoid the costs of imbalance when businesses finally realize the problem.
Interstore inventory balancing using predictive analytics is an increasingly popular way for retailers to get ahead of the imbalance. According to a Gartner report, 70 percent of the most profitable businesses will manage their processes using real-time predictive technology by 2016.