Overcome inventory overstock: practical strategies for brands and retailers
In recent years, retailers and brands have shifted from grappling with inventory shortages to struggling with overstock and excess inventory. Volatile overstocking as a result of COVID out-of-stock trends, rising inflation rates and economic uncertainty have all been driving forces behind this shift. The change has become a growing concern for businesses, as it leads to financial and logistical headaches. Brands must take proactive steps to tackle their overstock challenges, or risk facing even bigger problems in the future. In this blog, we’ll discuss some practical tips and strategies to help businesses overcome overstock issues.
Retailers like Walmart, Target and Gap have all acknowledged that they’re sitting on significant inventory overstock. The excess inventory rates are hitting more than 30%.
As product overstocks rapidly replace longtime shortages, how are consumers reacting? With rising inflation rates, people are increasingly cautious about their spending and actively seeking out bargains. They are cutting back on non-essential purchases and becoming more discerning about where and how they allocate their money. Over 56% of Americans are wary about making large purchases and are instead focused on essentials. They continue to place importance on both quality and price, 83% of consumers believe it’s important or extremely important for companies to design products that are meant to be reused or recycled.
Here are a few ways that e-commerce brands and retailers can get rid of excess inventory while maintaining brand image and using consumer trends to guide decision-making.
1. Flash sales and steep discounts.
Consistent, limited-time deals are seeing a major uptick. Flash sales can not only boost sales, but they can clear out inventory as well. Promotion of limited-time deals see higher engagement rates and conversions across promotional channels.
Consumers are searching for deals to combat rising prices and the threat of an impending economic downturn.
💡Tip: All new on ExpertVoice, brands can now participate in Flash Deals. These provide brands the chance to liquidate excess inventory to an expert audience during a one-week sale. Brands are seeing a 3x lift in sales placed on average during these limited-time sales.
2. Sell overstock products through a third-party marketplace.
Industry experts warn that promoting deep discounts natively on your brand’s e-commerce site can devalue the brand and create new expectations from shoppers. You run the risk of consumers getting accustomed to waiting to make a purchase and a discounted price on your site later on.
Selling off large quantities of excess merchandise can be a balancing act. Being strategic in positioning these deals is key, but another tactic is finding a third-party provider that can host some of the sales for you, targeting specific audiences of buyers. By hosting these kinds of sales off-site, you can sell off excess inventory at scale while ensuring that customers coming to your site don’t get entrapped in the sale-only shopping cycle.
This allows you also to reward your audience of loyalists and pros, who go above and beyond to find deals or are specialized enough to qualify for pro-program memberships.
💡Tip: ExpertVoice makes outsourcing the sale of overstocked items easy. By leveraging marketplaces like ExpertVoice as a secondary sales channel, you’ll recover a high percentage of your product’s retail value while offloading large volumes of surplus inventory to a targeted audience.
3. Offer product bundles.
One way for brands and retailers to handle excess inventory is by combining slow-moving items with popular ones and selling them at a discounted price. By bundling these products, they can preserve brand reputation while simultaneously reducing stock.
Product bundling takes many forms, from the classic buy-one-get-one (BOGO) to complementary cross-selling anticipating your customers’ buying behaviors, and plenty of brands are doing this well.
Beauty and skincare brands are known for their ability to effectively bundle their products and market them as a multi-step must-have. Take Billie for example, a subscription-based body product company that leverages memorable marketing and product bundles across its e-commerce site. The key is that they demonstrate how the products in their bundle complement each other.
Here, they describe their Iconic Trio Shave Set as a single product that includes three must-haves rather than a random collection of three items thrown together.
Bundling is proven to boost average order value (AOV) by encouraging customers to purchase the item they came for and squeeze a few more into their carts.
4. Run product sampling campaigns to offload freebies.
Often employed early on in the product lifecycle to build hype and awareness around a new product launch, product sampling can also be an effective strategy to offer consumers freebies, helping you offload excess products, galvanize relationships with a subset of your loyal, most influential customers and gather UGC and product reviews along the way.
If you’re looking for other ways to offer overstocked products to consumers as freebies, consider offering free extra products at checkout when they spend beyond a specified amount. This can be an effective way to get rid of excess products and incentivize consumers with a low-effort way to test out a new product.
💡Tip: Let ExpertVoice manage your brand’s product sampling from start to finish. Learn more about how our team can help you find the right participants, manage order fulfillment, and offload excess inventory — all while engaging a target consumer base of industry pros and collecting their organic product reviews and UGC.
5. Take a sustainable approach by donating excess products, offering repairs and re-commerce.
Donating excess inventory is a great way to build goodwill with your audience and minimize environmental impact. Modern consumers care about the brands they support, minimizing their environmental impact and charitable causes. Sustainability continuously proves to be a top priority for buyers. More than 80% of consumers confirm they’ll be purchasing more environmentally-friendly products in the next five years.
Beyond charitable giving, brands like Lululemon and retailers like REI are proving the value of their products and supporting sustainable shopping by offering low-cost repairs or store credit for recycled clothing. U.S. consumers are embracing secondhand purchasing for a variety of reasons. Newsweek reports that more than 40% of retail executives say resale (or ‘re-commerce’) and secondhand items will become an important part of their business within the next five years.
Creative solutions to tackle overstock.
Overcoming inventory overstock requires innovative approaches that adapt to changing consumer behaviors and market dynamics. Implementing strategies like the ones we’ve outlined here can help brands and retailers transform inventory overstock challenges into growth opportunities and navigate the supply chain challenges that lay ahead.
Learn how ExpertVoice can help tackle overstock.
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