Overcoming Excess Inventory Challenges With a Digital Approach

COVID-19 has created a series of complex challenges for retail brands. From rapid demand volatility to erratic shifts in consumer purchasing behaviors, the ripple effects of the pandemic have blurred the lines for producing optimal inventory volumes to align with current demand. In the spring, mandatory store closings left brands with exceedingly high amounts of excess inventory — hurting their supply chains, bottom lines and sales potential. The expected value of excess inventory from spring 2020 collections is estimated between $160 billion to $185 billion worldwide, more than doubling average levels. In response, major brands like Nike have closed some of their primary wholesale accounts in favor of d-t-c and also shifted focus to bolstering their e-commerce and omnichannel capabilities. Other brands have turned to deep discounting, knocking prices down by as much as 70 percent in order to salvage at least a small percentage of their seasonal sales — a short-term solution that lacks long-term reliability. And with fast fashion now also deemed unsustainable, some luxury brands have upped their prices, while others have even packed away seasonal items to be redistributed next year. But wait, why aren’t more brands leveraging off-price retail? In a normal world, a world where brick-and-mortar retailers weren’t

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