Q. Duncan writes, 

For the last 25 years, I’ve been working as a marketing manager for a large retailer.  One of my key challenges is what to do with excess inventory at my store. Limited by our national marketing layout as dictated by the head office, my only option is to pretty much hide my additional inventory long enough (according to the policy) and then qualify it for clearance, and or salvage. Any advice on a better way to address such an issue?

A. Dear Duncan,

Although it is one of the most debilitating elements in any business, excess inventory remains an unsolved concern for many managers. Before we deal with the problem, we first need to understand why this issue persists. Excess inventory indicates a misunderstanding of the local demographics. It typically comes down to two things: greater quantity of unnecessary products than required or the wrong products altogether. Hence, understanding local needs is a crucial part of solving the sort of oversupply problem you are having.  

Inventory specifics such as, size, style quantity, quality, price etc., is determined at various stages throughout the supply chain and therefore the door of communication needs to be open between yourself, your store manager, the regional sales manager and the regional/national buyer. Your store manager’s role is to communicate his or her local needs, which should be based on the needs of the local people. For example, if your store is surrounded by schools, theaters and pubs, catering to seniors might not be a wise move.  Areas and communities evolve as should the market, and that’s what your team needs to look into. A one-plan-fits-all is no longer what the market calls for; agility and flexibility are the name of the game nowadays. 

Now that the root of the problem is acknowledged, we can move on to finding a home for the excess product that might slip through the cracks once in a while. There are two main ways to do this: 

Swap or communicate the details of your inventory to all your counterparts within the company and see if one of the stores nationwide could sell this product in their community. By the same token, you can also inform others of your product needs and they may have excessive stock that matches your criteria.
Markdown- the key to marking down well is to ensure that the product that is being reduced is matched with a full price product wherever possible (i.e. buy full priced item and get reduced price item for a half price). Despite that the reduced price item did not sell well in your area, these promotions should be advertised locally wherever possible in case it was the item’s price point that was the problem for the locals.
Based on the size of your store, getting your employees involved in the process is of a paramount importance. Your sales associates should live and breathe the products they sell so that your customers’ likes and dislikes in terms of inventory are identified and properly communicated to your superiors. One of the fastest and most effective ways for your employees to get connected to your products is to implement an educational program that includes The Fun Factor. For more information on how to do this, we suggest you take a look at The Brand Champion Program.