Clear the inventory glut with steep discounts

As the retail industry recovers from the COVID-19 pandemic, the impact of the assault on Ukraine — and the constellation of headwinds those factors have unleashed — many stores are facing an inventory glut and are turning to steep discounts to clear excess stock. 

This trend started for the AW2022 season, but is expected to continue into 2023, as retailers look for ways to alleviate supply chain problems and make room for new products. By offering deep discounts, retailers can attract new customers and drive sales, helping to address the challenges of the pandemic and position their businesses for success in the coming year.

This is an important time for retailers. The industry is recovering from the COVID-19 pandemic, which disrupted supply chains and drove many stores to close their doors or reduce their hours of operation. 

In the early part of 2022, consumers were returning to malls and shopping centers with a renewed interest in making purchases—but stores were having difficulty filling all of their shelves with new products due to continued delays in deliveries from manufacturers. 

To address these challenges, retailers over-ordered, expecting this surge in demand to continue. But instead, we got the Russian invasion of Ukraine, inflation, stock market crashes and most probably recession. This means that there is a lot of excess inventory on hand. Major American retailers such as Walmart, Target and Kohl’s have reported that their inventories have surged by 40% compared to the year prior.

It is expensive for retailers to pay for warehousing unsold inventory because warehousing costs money. This includes costs for the physical space, as well as labor and other resources needed to manage and maintain the inventory. In addition, unsold inventory that sits in a warehouse for an extended period of time may become obsolete or lose value, which can result in additional losses for the retailer. Furthermore, unsold inventory ties up capital that could be used for other purposes, such as investing in new products or marketing efforts. Overall, the cost of warehousing unsold inventory can be a significant burden for retailers, which is why many are looking for ways to manage their inventory more efficiently.

Discounts are the most effective way to clear excess inventory and move toward a post-pandemic recovery. Discounts can be applied to specific products, or put in place as a blanket discount across an entire category. Discounts can be automated through software, reducing the need for manual labor.

To do this successfully:

This can help to move excess inventory more quickly, reducing the need for storage space and freeing up resources for other products. In addition, discount automation can help to increase sales and revenue by making products more attractive to customers through the use of personalized and targeted discounts. This can also help to prevent inventory from becoming stale or outdated, reducing the need for markdowns and clearance sales.

To use discount automation to effectively manage inventory, there are several key steps to take:

Using a SaaS tool like Talon.One to automate discounts based on predetermined triggers like inventory levels or date is a great way to reduce excess inventory and manage supply chains more efficiently. This allows retailers to quickly and easily offer steep discounts on unsold inventory, which can help to clear out excess stock and prevent it from taking up valuable warehouse space. This is important because storing unsold inventory can be expensive, and it can also lead to lost sales and reduced profits. 

By automating discounts with Talon.One, retailers can quickly and easily adjust their pricing based on real-time data, which can help to optimize their inventory levels and prevent excess stock from piling up. This can ultimately lead to more efficient supply chain management and improved profitability.

The major American clothing brand, Eddie Bauer, has seen outstanding results using Talon.One to create automated and target discounts. On one campaign, for example, their margin, demand and conversion increased 30%, 37% and 19% respectively over the period prior to the offer running.