The Local Approach to Creating Just-in-Time Demand
Retailers struggle each holiday season with an inevitable inventory imbalance. Some order too much of one product and not enough of another. The vagaries of the economy, the increasing influence of e-commerce, online marketing and a greater recognition of evolving shopping habits made this past holiday season one of the trickier ones to project. As a result, it's created chaos regarding inventory management.
In short, you need to have just the right amount of the right products in stock (historically, Cabbage Patch Kids or Tickle Me Elmos) to keep the hordes at bay in December without having to liquidate a pallet of products in January. While inventory management and the ability to create a “just-in-time” model on the supply side is widely understood, the ability to manage just-in-time demand may keep you from having to offer a free Furby with every $20 purchase come Jan. 15.
How can retailers prepare not only for major holiday seasons like Christmas but for seasonal events and product launches to ensure the right product moves off the shelves at the right time? There's a secret weapon for driving product demand and it all starts at the local level.
Both small and large retailers should begin by evaluating their local digital advertising strategy in order to determine new ways to drive foot traffic to their stores. For instance, a retailer with excess inventory of a new toy could target only neighborhoods within a certain radius of stores with the excess stock. Rather than create a national or even regional campaign, the retailer can pinpoint neighborhoods where this toy would be of most interest.
Targeting at the neighborhood level helps to curb wasteful ad spending, eliminating the need to run a costly national campaign that would be irrelevant to most. By reaching prospects at the neighborhood level with digital campaigns, retailers can get much more targeted and serve the right ads to the right prospects at the right time to create demand for a product. For instance, if in-store sales are slow, retailers and the brands they carry can create campaigns that incentivize local consumers to make purchases.