If we’re honest with ourselves, excess stock is not a problem that is new to us. That being said, finding exit routes for existing stock should now be a pandemic priority. As an industry, we now have the opportunity to build value chains back up from scratch into something much more sustainable and efficient. In what way can we best help ourselves, each other and the world around us?
It’s no surprise that a lot of small retailers have had to cancel and delay stock orders by the bucket load. Because of this, many have chosen the path of irregular discounting to make up for sales lost during lockdown. Despite this being able to generate a stream of short-term revenue, the sudden heavy discounting will ultimately end up diminishing brand prestige. Returns themselves are among the most anticipated outcomes of the pandemic itself, which could only continue to increase as restrictions ease – particularly online. Brands and businesses now need to assemble an effective strategy revolving around selling imperfect inventory, an essential investment in order to cut cost, keep a customer base and save on time.
The kind of retailer security that we want and need relies on having a stable contingency plan for our unsold stock supply that explores alternative routes. One idea that is being touted as a popular and successful option is selling these on to secondary markets, either on a wholesale or marketplace basis. In addition, an independent brand could aim to expand their existing service offerings with industry consultancy and in-house recycling facilities. With this in mind, any brand partners could benefit from 30% revenue on inventory in comparison to independent processing. Products that have been successfully recommerced can achieve their highest possible value, adding to any growing performance data. Many agree that this looks to also be the most in line with current consumer trends, with attitudes towards wasteful products and processes already turning before the pandemic even hit. Targeting secondary markets encompasses this type of responsible consumerism while meeting the high demand for off-prices. As further outbreaks could be on the global horizon, looking to alternative recommerce routes could be the safeguard to the supply chain that many will sorely need.