Don’t Get Buried in Seasonal Inventory!
Every holiday season retailers have the exhausting challenge of getting all their holiday inventory out the door before Christmas, dealing with the aftermath of returns and figuring out what to do with all the leftovers.
Whether you are swimming in a million size XXL men’s robes or you’re out of stock on candy canes, this list will help you create an escape plan.
Step 1: Organize
Set yourself up for success! Tag all of your products that are specific to the season with the day they are no longer highly desirable. In other words, if you are selling Christmas products, then their date would be 12.25.15. You may have other systems to identify seasonal items but make sure you are able to quickly sort and decipher when the end of the selling cycle is for all of your products.
Step 2: Consolidate
Whether you are an online store or a brick and mortar retailer, you should be starting to move all seasonal merchandise together. Yes, start moving it BEFORE Christmas. This will help ensure you know where all of it is, your customers can find ALL of it easily, and you can quickly mark it down together. (If you have an online store this can be done by making a seasonal section.)
Step 3: PURGE!
Create reports that have ALL seasonal merchandise for all categories and start purging your stock rooms. This really should be done throughout the weeks leading up until Christmas, but it is not too late.
Step 4: Audit
Make sure you aren’t missing any seasonal products by creating a plan to audit seasonal item inventory and ensuring they are all pulled out of stockrooms, removed from warehouses, and consolidated on the sales floor, in your database, on the backend of your eCommerce stores and in your stockrooms. Ideally all of your stores’ stockrooms have a seasonal area that you continuously purge for each holiday.
Step 5: Segment Promotions
Based on Inventory
Use your tagged dates to set up segmented promotions to your email list or in-store customers. For example, you can tier your “last-minute” sales based on your inventory levels of certain products with more extreme specials or bundles for products that have high counts.
Based on Customer Segments
Find your specific customer groups that buy on discounts and send special promotions with deep savings for the high count categories. You can also segment the people who bought last minute last year, or typically shop clearance after holidays. See how to quickly set up these segments here.
Step 6: Create Markdown Cadence
Use your list of seasonal products and determine the very last day that you can have them in your inventory. This will be influenced by your new product lines that are replacing them as well as your brand guidelines. Many retailers give a 2-3 week window, meaning that if you have Christmas product that needs to be gone in 2.5 weeks then your mark down would look something like this:
Christmas "Socks" Clearance Cadence
12.26 : 1st Mark Down - 30%
1 week later: 2nd Markdown - 50%
1 week later: 3rd Markdown - 70%
3 days later: Donation or liquidation (purge from inventory)
To make this manageable try to keep cycles the same for similar categories so that you are able to keep them on a markdown schedule.
Step 7: Market Your Clearance!
Set up advertising or email marketing campaigns to promote your seasonal clearance. Use your data-driven email marketing to know who and how often to send out price drop notifications.
Step 8: Donate and Liquidate
Seasonal product is just that. It has a shelf life and will need to be moved out to make room for your new products and full-priced merchandise. Do not let it sit for too long as it will look more and more undesirable, not to mention burden you from selling other items. For some tax credit, create a partnership with a non-profit to pick your merchandise. Another way to get rid of your inventory is to go through a liquidation company that will collect your products as well.
Step 9: Merge or Hold
So what if you think you could resell the products next year? If you have the space and are able to, it is fine to set aside products in a holding place to resell next year. (In Step 1, you would want to exclude those items from all of the markdowns and tags.) Another option is merging the product ID number into an item that you sell year-round, and therefore it would become part of that inventory. An example of this would be if you sold a seasonal hand soap, you would simply merge the product SKU into a soap you sell year-round.
Step 10: Take Note
Lastly, step back and make note of your inventory allocations. What you bought too much of, what you ran out of, how your markdown cadence worked, etc. Take detailed notes so you can reference them for the next year’s ordering. Now sit back and relax, it has been a busy season!