[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.the-future-of-commerce.com\/2022\/07\/07\/retail-inventory-management-outlook\/#BlogPosting","mainEntityOfPage":"https:\/\/www.the-future-of-commerce.com\/2022\/07\/07\/retail-inventory-management-outlook\/","headline":"Overstock, under-stock, out of stock: Retail inventory management outlook","name":"Overstock, under-stock, out of stock: Retail inventory management outlook","description":"After two years of turbulence, retail inventory management remains a tough job. Find out how retailers can tackle the challenge.","datePublished":"2022-07-07","dateModified":"2023-12-13","author":{"@type":"Person","@id":"https:\/\/www.the-future-of-commerce.com\/contributor\/david-rand\/#Person","name":"David Rand","url":"https:\/\/www.the-future-of-commerce.com\/contributor\/david-rand\/","identifier":662,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/27af23cf29ea2b57936ae1099d10f2b43bf9e7528abe792c2ae825d887981c44?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/27af23cf29ea2b57936ae1099d10f2b43bf9e7528abe792c2ae825d887981c44?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"The Future of Commerce","logo":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2023\/01\/logo-foc-schema-app-1.png","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2023\/01\/logo-foc-schema-app-1.png","width":172,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2022\/07\/Retail-inventory-management_FTR.jpg","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2022\/07\/Retail-inventory-management_FTR.jpg","height":375,"width":1200},"url":"https:\/\/www.the-future-of-commerce.com\/2022\/07\/07\/retail-inventory-management-outlook\/","about":[{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/commerce\/","name":"Commerce","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Commerce","http:\/\/www.wikidata.org\/entity\/Q26643"]},"Future of Supply Chain",{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/retail\/","name":"Retail","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Retail","http:\/\/www.wikidata.org\/entity\/Q126793"]},"Retail Trends, Data, News",{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/e-commerce-solution\/supply-chain-e-commerce-solution\/","name":"Supply Chain","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Supply_chain","http:\/\/www.wikidata.org\/entity\/Q1824206"]}],"wordCount":835,"keywords":["AI In Retail","Commerce","COVID-19 Supply Chain","Future of Supply Chain","Inventory Management","Retail Trends","Supply Chain"],"articleBody":"Sometimes retailers just can\u2019t catch a break.Last year, pandemic-driven supply chain disruptions led to empty store shelves and racks, frustrating shoppers who were emerging from quarantine. Trying to get ahead of future need, retailers ditched just-in-time inventory (JIT) approaches and ordered an abundance of product.But that strategy backfired as buying patterns changed and inflation led consumers to cut back, creating major retail inventory management headaches for brands.Things don’t look to get easier for retailers anytime soon. What should they do in the meantime? How can they tackle the inventory challenges?      2022 holiday shopping: 3 ways retailers can brace for impact                As a recession looms, retailers face a cloud of uncertainty this holiday shopping season. They're preparing by focusing on supply chains, customer loyalty, and omnichannel strategies.      Retail inventory management nightmareToday, as gas prices and overall inflation soar, consumers are curtailing discretionary purchases and becoming much more selective with where and how they spend their hard-earned dollars. According to recent reports, for instance, consumers have been spending less on goods and more on services, such as travel.This turn of events has left major retailers with large inventory surpluses that they can\u2019t quickly or easily move.Target and Walmart were among the first to acknowledge the problem when reporting sharp declines in profits in May. Abercrombie & Fitch, Best Buy, Costco, Dick\u2019s Sporting Goods, Kohl\u2019s, The Gap, Macy\u2019s, and Urban Outfitters are among others acknowledging inventory woes.      40-year ache: Inflation forcing consumers to make choices, cut back                "Hey Siri, find cheap food." Consumer spending is weakening as sky-high inflation forces shoppers to tighten their belts. How can brands keep customers?      For consumers, it means many items we all sought last year to make our lives in confinement more comfortable will probably be much cheaper. Indeed, big chains are likely to take a financial hit and offer markdowns on everything from sweatpants and pillows to television sets, living room sofas and air fryers.On the other hand, prices for items related to things people might need now as they travel and socialize, such as luggage and makeup, could hold their own or even increase.https:\/\/twitter.com\/leadlagreport\/status\/1531454419753107458?s=20&t=tvRMbkXJherclvgl6VogTwTake a breath: Inventory planning prioritiesRetailers, meantime, likely face uncertain times through at least the end of the year. Economic, social, health, and political turbulence will make sure of that.Economist views vary on whether recession is imminent \u2013 stock market gyrations aside. So, nobody\u2019s crystal ball is offering brands much insight right now to help with retail inventory management planning for the next several months.For most, this means they will:Hit pause. Big-box retailers know the worst thing they can do right now is overreact. The first thing any company must do in a crisis is figure out the problem. In this case, retailers need to reassess what\u2019s still selling and what\u2019s not, whether it makes sense to shift back to a JIT inventory model, and how to more accurately forecast sales in increasingly uncertain timesEmbrace smart software. Retailers will explore new and emerging technologies to help avoid the missteps of the past several months. For some, that will mean predictive analytics. Others will embrace ERP tools. Still others will invest in tools to help see and manage their sprawling customer, sales, and inventory data. Many will also explore artificial intelligence, machine learning, and other automated tools to glean actionable insights and recommendations for balancing inventory with anticipated demandPlan for known milestones. Many of the retailers who acknowledged inventory challenges say they hope to clear the excess to make room for traditional milestones, namely back-to-school and the holidays. Those priorities never change, regardless of conditionsOverhaul the supply chain. Numerous retailers are already learning from the problems of the last few years and are working to transform their supply chains. In fact, Gartner research shows that 96% of retailers plan to invest to make their supply chains more agile, and 90% are planning investments to improve resilienceRemember customer experience. This is still the age of the customer. Excess inventory doesn\u2019t have to be rolled into some big sale filled with items people may not really want. But if it\u2019s bundled with other merchandise as part of experiential marketing activations, consumers could see it as more valuable. Who doesn\u2019t like to win something when attending a physical or online event? And such swag could be far more valuable from a marketing standpoint than it would be if it were buried \u2013 sad and lonely \u2013 on markdown tables at the back of a storeRetailers like Walmart expect it will take a few quarters to work through most or all of their excess inventory. Until then, they have an opportunity to get ahead of future challenges while applying technology to stay in touch with shifting customer sentiment, behavior, and demand.  Flexible. Agile. Future-proofed.The power of hybrid, composable commerce is real.Discover real-life examples of success HERE.\u00a0"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"2022","item":"https:\/\/www.the-future-of-commerce.com\/2022\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"07","item":"https:\/\/www.the-future-of-commerce.com\/2022\/\/07\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"07","item":"https:\/\/www.the-future-of-commerce.com\/2022\/\/07\/\/07\/#breadcrumbitem"},{"@type":"ListItem","position":4,"name":"Overstock, under-stock, out of stock: Retail inventory management outlook","item":"https:\/\/www.the-future-of-commerce.com\/2022\/07\/07\/retail-inventory-management-outlook\/#breadcrumbitem"}]}]