The Power of New Part 2
A few years back July of 2008 to be exact an article that I wrote appeared in this magazine entitled The Power of New. In case you missed it the article dealt with how new merchandise was the catalyst to increased sales.
Inventory Freshness
I was prompted to tackle this subject again after speaking with a store whose numbers appeared to be in line and even below plan but was experiencing a sales decline. When I review a store’s merchandising figures an area of great concern to me is the freshness of the inventory. I like to look at the current stock level and the flow of new merchandise and attempt to determine just how fresh the inventory is.
What I determined in this case was that the overall store inventory level was increasing over last year and their stock plan yet very little new inventory had been received in the past ninety days. What this told me was that though technically overstocked the store was very much understocked on current inventory hence the main reason for the declining sales.
Merchandising Mantras
Have a hunch buy a bunch! A clever saying to be sure and the alliteration is spot on. The problem is that more often than not this market mantra ends up being the nucleus of the merchandising plan for those that stray off course. Naturally that is where the problems start.
It’s one thing to take a “flyer” occasionally on a hot item or new line. I actually encourage this for stores I work with in moderation. However when stores place orders without deciding how all of the pieces will fit together that leads to an assortment of potential problems.
You will recognize this symptom
In a store that claims they have nothing to sell yet appear on paper to be over inventoried. Due to “assortment creep” taking place over a number of seasons the stock level has swollen to the point that nothing makes sense.
- Too many lines are represented
- Needed markdowns have not been addressed
- Too much end of season merchandise is not being continually cleared
- And the list goes on.
Summary of The Power of New Part 2
The article revisits the importance of maintaining fresh inventory to boost sales highlighting a case where a store’s declining sales were linked to an overstock of outdated merchandise despite appearing well-stocked on paper. It emphasizes the pitfalls of poor merchandising strategies such as “assortment creep” which lead to inefficiencies and the illusion of having nothing to sell.
“In a store that claims they have nothing to sell yet appear on paper to be over inventoried.”
Real-World Examples of Inventory Freshness and Merchandising Strategies
The concept of keeping inventory fresh and strategically managing merchandise is vital for retail success. Here are some real-world examples illustrating these principles in action:
- A fashion retailer noticed declining sales despite having a full stockroom. After analyzing their inventory they discovered that their stock was outdated and not aligned with current fashion trends. By introducing new seasonal collections and clearing out old stock they revitalized sales and attracted more customers.
- An electronics store was struggling with overstock issues resulting in cluttered shelves and a confusing shopping experience for customers. By implementing a strategic inventory management system they focused on stocking the latest tech gadgets and regularly updated their offerings which led to increased customer satisfaction and sales growth.
- A home goods store faced challenges with “assortment creep” where they had too many similar product lines. By conducting a thorough inventory review and streamlining their product offerings they were able to focus on best-selling items improve store layout and enhance the shopping experience ultimately boosting their profitability.
