Retail sales fluctuated wildly during the initial months of the COVID-19 pandemic, and retailers are still adjusting to shifts in customers’ buying habits.
For some truckstop operators, changes in shopping patterns has meant that the inventory they expected to move is growing cobwebs rather than profits. Thus, we thought it was a good time to revisit what to do with unproductive inventory.
Here are 17 actionable ways to limit the negative impact of your unproductive inventory.
- Look at ways to promote items through curbside pickup, deliveries, or, if possible, online orders. These avenues have flourished as people try to social distance.
- Get with your vendors to talk about your inventory levels and identify where the issues are together. Some may have been caused by the pandemic, but others could have existed before the new novel coronavirus changed the way we operate.
- Develop goals, inventory levels and inventory turns. These may have changed due to COVID-19, and it will be helpful to revisit your expectations and then share them with your vendors. You can also set up regular meetings to review success.
- If you do not have your inventory broken into departments, begin the process of doing it. For example, you should separate your truck supply inventory counts and from your electronics inventory counts. You should also separate your gift inventory counts from your novelty inventory counts.
- Rank your inventory departments based on sales, turns and profitability. You need to understand where your dollars are being spent.
- You should know your days' inventory on hand and/or build to books for vendor reorders, if you are not blessed to have the systems that can assist you.
- Challenge your own biases about what merchandise you think you need, what customers are looking for and what are they looking at and not buying. Do a heat map. Maybe customers are not turning into consumers because you are not carrying the correct products or maybe they are looking at your product and not buying it. A heat map can tell you where the action is.
- Evaluate your vendor programs, such as everything guaranteed or free freight. Are these programs the best for you and your vendors or are there other better options for both organizations that generate increased profitability? Again, your vendors should be part of your team. You need to work with them to look at the true cost of products.
- Ensure you have your markdown cadence in place before you purchase merchandise that have a potential obsolescence such as date coded consumables or seasonal and holiday items. Waiting until after Easter to mark down Cadbury Eggs may be too late. Keep in mind how big retailers do it as they do it well. For example, as a consumer you know you can buy a winter jacket from Macy’s in February at the best price even though it is still cold outside, or buy well-priced shorts in August even though in many states it is still 90 degrees outside.
- If you have multiple locations, keep in mind different customer demographics. You may have one location that has a significant number of long haul ever-the-road (OTR) customers and another location is made up of local OTR customers.
- If you have multiple locations, be open to transferring product to one location from another if it is selling well somewhere else. I talked with one NATSO member that did during the early days of COVID-19 and it really helped the location draw down on its inventory.
- Create one-day sales or skid sales of unproductive merchandise. Develop fun events around the selling of merchandise. For example, have a Black Friday event in June.
- E-Bay can be used to sell one offs, especially inventory with high retails that may no longer be able to be sent back to vendor.
- Local scrap or bulk buyers of merchandise are always looking for good deals. Do the math and if the product is growing spider webs, these options can be valuable partners.
- Develop buy-one-get-one (BOGO) programs where you tie the items that are not selling actively with the items that are. Have some fun! For example, buy a snickers bar and get a purple flower power lapel LED pin for free. This is so much better then throwing it in the trash or letting it rot on your shelves, taking up valuable selling space.
- Ask the competition if they would like it. Yes, they may be selling the product you bought like hot cakes, but you may be stuck with the item. Check with your vendor as they may be able to make a transfer happen.
- Offer your team members the opportunity to earn extra cash by developing sales programs around inventory that needs help. With the correct incentive, you can really move inventory. You should also speak with your vendor partners to see if they will agree to offer assistance to help you sell the slow-moving item via a sales initiative rather than agree to take the item back.
What are other things you can do? What are you doing?
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