Excess Retail Stock Management: Best Practices for Boosting Your Bottom Line

By Jonny Gross, Sales Director, ReStore for Retail‍

Ever feel like your profits are shrinking because too much merchandise is just sitting around? You're not alone. In fact, data collected from Hilco Consumer Retail customer engagements show that excess inventory can tie up as much as 30% of a retailer's working capital. That's a big chunk of change that could be used to invest in marketing, expand your product offering, or simply improve your bottom line.

This is where retail stock management comes in. It's all about streamlining your surplus inventory processes to avoid that dreaded "stock limbo" – where products gather dust instead of flying off the shelves. By implementing effective stock management strategies, you can:

• Free up cash flow: Having less excess inventory means more cash readily available to reinvest in your business.
• Reduce storage costs: Warehousing all that extra stock adds up. Streamlining inventory reduces your storage needs.
• Boost profits: By selling through inventory faster, you can generate more sales and improve your overall profitability.
• Improve customer satisfaction: Nobody wants to be stuck with outdated styles. Effective retail stock management ensures you have what customers want when they want it.

There are many obstacles to preventing adequate excess inventory sales, but at the top of my list are:

• Unpredictable yo-yo discounting on items like clearance merchandise
• Insufficient clearance promotional signage in stores
• Lack of care and cohesion in how excess inventory is displayed

Pricing is more than just numbers on a tag or a sign. Effective clearance pricing is a traffic driver for your stores. It’s a no-brainer that you want to offer attractive discounts that entice customers to make a purchase, but also maintain a margin floor to offer some level of profit. Our most successful discounting efforts combine a set step-down discount model aligned to a time-bound initiative. Offering a specific discount in week 1, a new discount in week 2 and a final discount in week 3.

No matter what strategy you decide to take, the key to boosting excess inventory sales is striking a balance. You want to keep your existing stock attractive to regular customers, but also entice bargain hunters waiting for a deal.

Here's where a smart pricing strategy comes in. Once you have a plan, ensure consistent discounts across all your stores. Put extra care into how you display clearance items – often an overlooked area. Make it inviting, easy to shop, and well-organized.

Visual appeal is crucial here for success, and that’s where a platform like ReStore for Retail can help drive revenue. ReStore monitors how well your clearance displays are performing across stores and empower district managers to virtually “check in” on stores day-to-day, providing superior store insight and consistency (not to mention ReStore helps track other key metrics like UPT, AUT, and store traffic)!

Actual Large Apparel Excess Inventory Management Project Results

Ready to turn your stockroom into a profit machine?

Excess inventory can eat into your profits, but it doesn't have to be that way. By implementing the strategies above, and leveraging a merchandising platform like ReStore, you can transform your stock control. 

Try ReStore’s Retail Stock Management Software & Merchandising Platform

If any of that sounds interesting, shoot us an email, we’d love to connect and see if we can add value! Contact us today!