MY HUSBAND AND I went shopping for a new table and chairs recently. It was long past time for something new, something more in keeping with our lifestyle today. And so off we went to traverse a few stores close to our home.
We embarked on our little sojourn armed with both the desire to find the perfect match for our lifestyle and the luxury of not needing anything immediately. We could wait for the right fit if that’s what it took.
After visiting a couple of stores, the realization dawned on us that inventories were not just light, but were, moreover, replete with dated styles and uninspiring options.
We weren’t entirely shocked, knowing that the pandemic has wreaked havoc on business for many months now, but it was, nonetheless, a little disheartening.
The experience reminded me of a recent conversation with one of my colleagues who, after relocating from one state to another, found himself needing to furnish his new home only to be disappointed by the dearth of options as he and his wife perused the stores in his new city.
What stood out for him was the realization that while there was inventory on the shelves, it was, to a large extent, uninspiring. It quickly became apparent that all the better goods had been sold and the businesses had not yet replaced those products.
Some might argue that certain products don’t have expiration dates — that if it doesn’t spoil, we shouldn’t worry about it. But the reality for consumers is very different.
The vast majority of sales come from products that have been in inventory for 180 days or less. Check your data; it doesn’t lie.
Accepting the 180-days-or-younger premise, what do you think happens when that faucet is turned off? What impact will it have on your customers when they find your cases populated with the goods you didn’t sell last year, or even the year before?
If you are one of the many retailers over-stocked with aged products, I can’t emphasize enough that you should be aggressive about turning that inventory into cash. Clear it out, auction it off, scrap it, stock-balance with your vendors (they’ll be more likely to work with you if you have been supporting them), have a 60/60 sale.
A case in point of how not to approach this is a retail client of mine. She sold a cross pendant and re-ordered it. That process repeated itself three more times until she decided that an aged cross she had in stock could be re-priced instead of replenished.
Fast-forward 18 months and she still has that re-priced cross in stock. Worse still, she lost the revenue from the cross she had been replenishing multiple times a year while she waited for the re-priced cross to sell.
I can’t tell you how many of those stories we hear and how many times filling a fast seller with a nonperforming product has failed. You cannot replace mint chocolate chip ice cream with vanilla and call it anything other than vanilla. It doesn’t work.
That advice is even more important in the midst of the pandemic. There is a reason we call them best practices. That’s where the sales growth and profitability come from.
Our retailers are experiencing 30 percent to 100 percent sales growth through the pandemic by following best practices.
They are replenishing their fast sellers and aggressively and appropriately eradicating their aged inventory. Some of them are in the best financial position they’ve seen in years.
We couldn’t be more proud of them.