Inventory Management Tips For The 2021 Holiday Season
By Devin Partida, ReHack.com
Inventory management plays a significant role in a business’s profitability, and it gets especially tricky during the holiday season.
As the COVID-19 pandemic continues to rage on and negatively impact the economy, it’s no wonder this year will come with its fair share of challenges for retailers. For example, ongoing supply chain issues will affect your ability to keep bestselling items in stock.
Because this holiday season may present new challenges for retailers, it’s critical to learn some of the best inventory management practices to adequately prepare.
Keep the tips listed below in mind as you navigate the 2021 holiday season.
1. Complete An Inventory Self-Audit
Before you’re in the thick of the holiday season, you want to ensure starting your inventory management journey with a self-audit. Go through your current inventory and pay close attention to detail.
Try to be retrospective and see what has worked for you before and identify any areas that can be improved. Based on the current environment, you must strengthen your inventory management strategy before the craze of the holidays.
2. Select An Inventory Management Method
There are multiple inventory management methods available for you to choose from. Here are some examples of strategies that you can use:
- First in, first out (FIFO): Using the oldest inventory to fulfill the newest orders
- Last in, first out (LIFO): Using the newest stock to fulfill older orders
- Just in time (JIT): High-risk strategy that replenishes inventory on an as-needed basis
- Economic order quantity (EOQ): Uses customer demand, acquisition cost, and holding expense to determine inventory levels
- ABC analysis: Prioritizes SKUs that are driving profitability
Any of these methods could be appropriate for handling seasonal inventory but be sure the one you choose is best suited to your unique retail operations.
3. Talk To Supply Chain Partners Early
Suppliers are facing issues this holiday season with shipping bottlenecks. Be sure you’re communicating with your supply chain partners to better understand how to approach inventory management.
Issues in the supply chain can be overcome by communicating early and often with your suppliers. You also can consider automating this process to get real-time alerts and notifications about the status of your shipments.
4. Optimize Your Inventory Turnover
Certain inventory turnover techniques can help boost your turnover rates. Many e-commerce businesses use one or more of these methods to accomplish this:
- Product bundling
- Marketing
- Smart restock forecasting
- Optimizing the merchandise you sell
The holiday quarter accounts for a significant portion of annual sales, so be sure to do your best to optimize your inventory turnover. See it as an opportunity to grow as a retail business.
5. Automate Inventory Processes
Many businesses across all sectors are investing in automation technology to improve their operational efficiency due to the growth of artificial intelligence (AI). Consider automating your inventory processes to do just that.
For example, you can integrate your POS system with your inventory management software to gather the most accurate information regarding your stock. This will save you time and effort during the holiday season.
6. Be Flexible During Times Of Uncertainty
This year may present new challenges for retailers, and the buzz of the holiday season will create some pressure within the industry. The key is to remain patient, stay calm while you’re under stress, and be as flexible as possible.
If you prepare for the season early enough, you’ll be ready to handle any challenges that come your way. Rely on your employees and explain that the holiday season requires next-level inventory management for your brick-and-mortar or online store to be successful.
As we approach the holiday season, be sure to follow the tips listed above if you want to manage your inventory seamlessly.
Preparing For The Holiday Season
It may seem intimidating to think about the holiday season this early in the year. However, retail sales are expected to grow, and implementing a solid inventory management system will keep you on your toes during this chaotic time.
About The Author
Devin Partida is a writer and blogger interested in retail technologies and business solutions. To read more from Devin, visit ReHack.com, where she is the Editor-in-Chief.