How to Take Control of Seasonal Inventory

The Christmas season is well and truly upon us and with it, the challenge of managing seasonal inventory. As decorations go up and excitement in the retail industry is increasing, we need to be fully prepared for the unique set of challenges that face retailers at this time of year. In this article, we will be looking at tips to ensure that you are managing your seasonal inventory and the biggest challenges in doing this effectively.

Seasonal Inventory – the basics:

Seasonal Inventory can be defined as the products where sales fluctuate due to their demand at different times of year. This can apply to products affected by the weather, holidays or events.

Seasonal Inventory Examples

Typically in most industries, there will be periods of high and low demand and fluctuations arise whether it be due to the changing of seasons or more usual events such as the recent pandemic.

Some more common types of inventory can include:

• Holiday Inventory – products where consumers typically purchase in high demand at specific times of year i.e. Christmas and Easter.
• Seasonal clothing – it makes sense that customer habits in the fashion industry change with the seasons.
• Event Inventory – national or global events such as the World Cup and Jubilee provide opportunities for retailers to provide t-shirts, flags, bunting and other related merchandise.

The Three Biggest Challenges of Seasonal Inventory:

• Out-of-Stock (OOS)
• Storage
• Dead stock

Out-of-Stock (OOS)

A study conducted by the IHL Group reports that out-of-stock items could be costing retailers a staggering $1 trillion a year and affecting 32% of shoppers – highly frustrating news and not helpful to your brand.

Companies affected by seasonal inventory will be predicting future sales and storing stock for periods of high seasonal demand. Where the high demand exceeds the stock available, companies will find themselves in an out-of-stock situation.

Storage

When stockpiling products for future times of high demand, naturally a big concern can be storage implications. Without careful management of costs and handling, problems can easily arise.

So the essential question is always: how much do you store? A careful balance of the cost of storage and handling must be weighed against the cost of satisfying the rise in demand.

Dead Stock

This refers to stock that you can’t sell and can be a huge financial loss which is difficult for retailers to stomach. This is made even more of a challenge where seasonal inventory is concerned. Retailers who stockpile seasonal products are faced with the pressure of meeting the demand in such a way that they aren’t left with dead stock when the season comes to an end.

Failure to manage seasonal inventory can mean retailers are stuck with dead stock with no means of getting rid of it, so managing seasonal inventory means that the details matter. Meeting the demand requires retailers to be accurate in their forecasting to avoid these issues.

Top Stock Management Solutions from RMS:

• Create kits and bundles
• Live multi-location stock updates
• Matrix items – stay in control of specific levels of stock within categories
• Transfer stock between locations

Here are 5 Strategies for Managing Seasonal Inventory:

• Monitor your inventory data

Staying in control of your inventory is essential for monitoring stock levels throughout the year and planning ahead for seasonal demand. Low levels of inventory are less of a worry if you have a solid supply chain.

Key things to look out for include sharp drops in sales and making use of OpSuite’s EPoS will keep track of daily sales, stocks and trends. An ideal position will be where you can maintain a level of stock which meets the seasonal high demand, without being left with too much when the demand falls. OpSuite’s comprehensive reporting tools allow you to see what has sold and when, effortlessly keeping track of stock levels to keep you ahead.

• Use your data to forecast accurately

Though implementing digital systems, using past sales trends gives you a better understanding of what to expect in your forecasting. Retailers can pinpoint what will sell and when, adjusting stock levels to maximise profit. Boost your profitability by planning ahead for seasonal high demand.

• Discounts

Where you are tracking sales and noticing slow-moving stock, use your EPoS to make strategic discounts across your inventory. By keeping up with your inventory data, OpSuite’s tools allow you to apply discounts competitively where needed and manage stock effectively.

• Bundle Products

To encourage demand for seasonal products, bundling items can be a smart move. OpSuite’s EPoS allows you to combine complementary products, for instance baubles and tinsel, to boost sales. This can be especially effective when the season is over. By suggesting customers make great savings by stocking up for next year, retailers can appeal to customers by offering them the opportunity to invest wisely.

Similarly, bundling a slow-moving product with one in high demand increases the perceived saving on both items while simultaneously encouraging customers to spend more. Better Marketing reports that return rates are significantly reduced by marketing part of a bundle as a ‘free gift’.

• Presales

In order to gauge the demand for seasonal inventory, consider running a presale to test which products will be the best sellers and which will remain unsold. Undoubtedly the greatest challenge is predicting what will sell in any given year.

No retailer wants to be left with surplus stock that is costly to store and may remain unsold for months. Inevitably where this occurs, retailers will be forced to sell at steep discounts. Running a presale could reduce the risk of being left with high levels of

Using OpSuite’s pricing tools, retailers are in control of what sells and for what price. Engage customers with a presale and accurately track the popular products to make smart decisions for seasonal inventory.

Key Takeaways:

• Making a smart investment in an EPoS is the first step to expertly managing seasonal fluctuations in sales.
• OpSuite’s Retail Management System can handle the challenge of managing seasonal inventory. Stay on top of your stock across multiple locations, distributing between warehouses and stores seamlessly.
• Use OpSuite’s reporting tools to track historical sales and forecast for future high demand products.
• Adjust pricing with OpSuite’s cloud-based system and bundle products to manage seasonal inventory effectively. Stay on top of customer demand with real time data, limiting dead stock and maximising profitability.

Get in touch with RMS to answer any questions about our OpSuite Retail Management System. We have extensive retail knowledge to find the best system for your business. Whether to discuss how we can help your business thrive or give you an estimate, we’d love to hear from you.

Why choose RMS?

RMS have worked with ambitious businesses for over 18 years, supplying tailored software solutions and EPoS hardware from the Shetland Islands to the Seychelles. We work with businesses in most retail verticals, contact us and discover how we can support your business to increase profits with the latest technology.