Halloween is a favourite holiday with both small and big children alike, celebrated with costumes, pumpkins, scary stories and of course candy. Yet it comes and goes in a flash compared to the other grander seasonal holidays. Retailers face the challenge of understanding, what is the correct amount of stock? Buy too little and risk losing customers to competitors, buy too much and risk overstock issues and scary Halloween Ghosts sitting next to your Christmas Rudolfs in November.
So how do retailers find the balance and deliver the right amount of stock, at the right time, at the right price, allowing for Christmas stock to perfectly transition into prime locations on November 1st? We take a quick look at how to manage your inventory proficiently, to ensure you are left with the desired amount and not a horror story.
Stage 1: Plan – How much do you need?
- Review last year performance and lessons learnt. Did you perform well last year? Were you left with extra stock?
- Consider your strategy for this year. How much do you wish to grow sales? What are your promotional activities?
- Determine your sales and sell through expectation. Does this allow for the range? What is your width versus depth and sizing strategy?
- Agree your terminal stock position. What does this look like in dollars and units? How will this be managed in store?
Stage 2: Buy – What’s my range?
- Complete your assortment plan and ranging building. Does this deliver the strategy? Does this fulfil the customer needs?
- Plan the stock to arrive just-in-time and monitor deliveries efficiently ensuring on-time delivery. Have you considered all lead-time implications? How will delivery be monitored?
Stage 3: Monitor Performance – Be ready to react
- Monitor your performance weekly or daily if necessary, frequently forecast sales/stocks and compare this to your plan and agreed terminal Ensure you understand the implications of any variances. What action will you take if sales are higher and your stock has reduced? What action will you take if sales are low and stock has increased?
- Be prepared, ensure the organisation is ready to react, executing changes have knock-on effects across the business. Do you need to inform marketing, stores, the warehouse etc?
- Manage your store and DC levels. If you can sell the stock it needs to be in store and out of the warehouse before the end of the selling period. When is your last stock push?
Managing your stock in-season requires vigilance and an understanding of how to forecast and react to changes in customer demand. If you have too much stock you may need to increase markdown activity, whilst highlighting changes in profit. If your stocks are too low, you may reduce markdown activity and have a positive profit outcome.
To understand the above principles and processes in more detail and learn the skills necessary to plan and execute a true seasonal promotional assortment, please see our Merchandise Planning, Assortment Planning & Range Building, and In-season Management online academy courses.
Remember the only thing that should be scary is the costumes not the stock levels at the end of Halloween