An overwhelming amount of retailers are all faced with the same issue a year and a half into the pandemic...inventory issues. Whether you're facing a lack of supply and too much demand or have too much supply and not enough demand, check out some tips on how to handle the great inventory crash of 2021.
Dear Zippy,
Like so many retailers today, our company is facing serious inventory issues and are expecting things to get worse with increased holiday demand. After a soft 2020, we have invested heavily in our advertising to specifically drive demand this holiday. We have experienced similar issues with inventory management back when we were building the business. Our inability to fulfill quickly on back orders is what caused our problems several years ago. We have worked so hard for so long to get to a place where our customers have a memorable customer experience with our brand. Can you offer any suggestions for how we should handle this current inventory issue so as to maintain strong relationships with our customers and continue to build the business?
Sincerely,
Inventory Issues in Idaho
Dear Inventory Issues,
First of all, you are right, you are not alone. The issue with inventory is one that is impacting most retailers today and in many ways is out of your control. On one hand, you could have ordered early and over stocked merchandise but then you would have had additional expense to store the merchandise and without enough information to accurately predict demand, you could be left with a lot on hand, long after the holiday season is over. On the other hand, you could wait for the data to inform your purchasing, but supply channel issues prevent that right amount of merchandise from getting to you with enough time to get to your customers.
While neither scenario is ideal, you can still mitigate issues with your customers and maintain a strong customer experience (CX).
Start by being honest with consumers. In 2020 we all learned the impact of authenticity on customer loyalty. We are in unprecedented times as we are dealing with supply chain issues. Let your customers know this and let them know you are doing everything possible to get them what they need when they need it. But do not over-promise at the risk of under-delivering. If you cannot get merchandise until after the holiday, let the consumer know. There is nothing worse than expecting something, only to learn after it's already late, that it isn’t coming and then being left with no time to remedy the situation.
Next, take “inventory” of your inventory. While you are finding yourselves short on some items, you will likely find yourself with an excess of other items. Creative and offer may be the answer. Re-work your advertising to highlight the inventory you do have. We’ve all experienced this scenario on Amazon when a product is out of stock. The consumer receives recommendations for a like product. You can make those recommendations too! When re-targeting, recommend alternatives to the out-of-stock items. The consumer shows intent for Cuisinart Cookware and you are out of stock, recommend the Rachel Ray Cookware. The consumer shows intent for the Christmas sweater adorned with Christmas lights decorating a tree? Recommend the red sweater and the charming holiday necklace – perhaps with a discount. Get creative!
Last, think about whether a gift certificate or gift card for the desired item will suffice. Maybe your niece doesn’t want the cookware after all.
She now has a gift card to buy what she really wants.
Above all, remember the spirit behind this holiday season and enjoy!
Zippy