If you track inventory levels from the last few years on a line chart, it might look like the retail industry suffered a heart attack — and that wouldn’t be far from the truth.
The pandemic sparked different consumer buying patterns, the supply chain crisis, and thanks to the “bullwhip” effect, overstocking. The growing popularity of returns has added more uncertainty for retailers looking to maintain healthy inventory levels — even after sales have been captured.
Despite more ups and downs than a roller coaster, retail is alive and well, but as I mentioned in the first CEO Corner blog, it must embrace an omnichannel approach. Purchasing wholesale and maintaining healthy inventory levels is now more nuanced than ever, requiring a firm grasp on the two main channels of commerce.
Multinational giants like Nike have recently experimented with reducing wholesale and focusing on D2C sales, but the inventory glut they’ve found themselves with serves as a warning sign to specialist brands with fewer resources.
In the current climate, specialist retailers are left in a difficult position. If they don’t order enough of a product, they risk a shortage and the loss of modern consumers — who are increasingly demanding and decreasingly loyal.
But if they go too far in the other direction, they fall victim to overstocking. Retailers that are overly ambitious with their wholesale orders risk being left with a mountain of dead stock at a time when warehouse floor space is more expensive than ever.
When retailers play the wholesale guessing game, there are rarely any winners. So, how can they figure out what products to carry in their stores while keeping stock levels in the sweet spot?
In times gone past, a retailer’s life was simpler — and slower. If a consumer wanted an item that was out of stock, the retailer would order from the supplier, who would then inform the retailer of an estimated delivery date. Once the order had arrived, the retailer would have to process the product before handling the final part of fulfillment.
But with the breakneck pace of modern commerce, retailers must work out what consumers want well before reaching the store. How do retailers do this? The same way they play a Battleship game — by making calculated guesses and hoping to hit the target.
Unfortunately, games like this always involve a string of misses, which can be particularly costly against a backdrop of rising inflation and wavering consumer loyalty.
Thankfully, the world has evolved, and retailers no longer have to play guessing games. Instead, they can harness the greater connectedness of modern commerce to gain better insights into the products they stock and consumers' desire for them.
With real-time data on sales, inventory, and turnover, retailers are better positioned to understand the right moment to place wholesale orders and the right products to order.
Identifying fast-selling, slow-selling, and obsolete products may seem straightforward, but without accurate data, it’s always a bit of a gamble. By relying on precise, current data from the brands they stock, retailers are now suitably positioned to make proactive rather than reactive decisions.
Quivers’ comprehensive software gives retailers valuable real-time product data from a variety of sources. This data is paramount in allowing them to make informed wholesale purchasing decisions — and isn’t the only way Quivers de-risks inventory.
At the risk of sounding like a broken record, commerce is now omnichannel. And that’s why Quivers’ solution to wholesale works so well. Only by matching product supply with consumer demand through other sales channels are retailers able to fully de-risk their inventory decisions.
Our extensive toolkit connects specialty brands with retailers and allows them to offer various popular fulfillment options. Take Ship-from-Store and BOPIS, which allow brands to convert on their websites, regardless of inventory levels. This gives retailers an additional sales channel and a chance to reduce inventory. Likewise, Quivers Ship-to-Store uses the brand’s inventory which means that retailers can quickly fulfill orders — even if they don’t have product stock.
I stand by my belief that through greater collaboration and more data, we can create a world of commerce where brands, retailers, and consumers all come out as winners — without having to hazard a guess.