Inventory’s Role in Contingency Planning
3. Keep and maintain a markdown calendar. Know when you must take markdowns to sell through overstocks. Have reporting systems in place to provide you with up-to-date visibility of overstocks and shortages by product to support buying and markdown decisions.
4. Profile your most and least important products, then buy them differently. For high-impact products, buy extra inventory that can be used for opportunity marketing to drive additional sales but will also remain viable for the post-peak (if you must carry the inventory for extra weeks or months). Similarly, identify your least important products — i.e., the ones you can accept running out of early in the season. If you buy less than 100 percent of forecast, be prepared to direct consumers to alternative products once out of stock.
Be ready when marketing needs to drive last-minute customer traffic. Have inventory reporting already in place so you can instantly support marketing efforts by identifying products with the best sales potential and adequate inventory.
By creating timely, workable contingency plans supported by reliable inventory planning systems and reporting, you really can be the hero when it matters — at the end of the year.
Joe is Vice President of Product Solutions at Software Paradigms International (SPI), an award-winning provider of technology solutions, including merchandise planning applications, mobile applications, eCommerce development and hosting and integration services, to retailers for more than 20 years.
Joe is a 34-year veteran of the retail industry with hands-on experience in marketing, merchandising, inventory management and business development at multichannel retail companies including Lands’ End, LifeSketch.com, Nordstrom.com and Duluth Trading Company. At SPI, Joe uses his experience to help customers and prospects understand how to improve sales and profits through applying industry best practices in merchandise planning and inventory management systems and processes.