Optimizing Special Events and Seasonality in Retail: Embracing High-Resolution Planning

Mastering inventory for special events and seasonality is a key ongoing challenge for retailers of every kind and size. The ebb and flow of sales during festive seasons, promotions, shopping days, and holidays can pose significant hurdles for inventory management. Retailers often find themselves grappling with excess inventory after a season or scrambling to meet the demand for best-selling products.

In this article, I delve into the intricacies of managing special events and seasonality in the retail domain. I explore the underlying complexities that make planning for these events so challenging and new technologies retailers are using to mitigate these challenges.

The Problem

Upstocking for the Season: A Double-Edged Sword

Retailers often face a conundrum while preparing for the upcoming season, and inventory mistakes have significant costs. The industry lost upwards of $1.8 trillion to stock errors like overstock, which is a frequent consequence of special events. Anticipating increased demand, retailers upstock their inventory, only to find themselves burdened with excessive stock once the season ends. This overstocking results in tied-up capital, increased carrying costs, and the risk of inventory obsolescence.

Shortages of Best Sellers

On the other side of the spectrum, retailers may encounter inventory shortages of their best-selling products during special events. Unanticipated demand surges for these items can lead to stock-outs, leaving consumers disappointed and potential sales lost. McKinsey reports that a majority of consumers — a whopping 71 percent — report switching brands or retailers to access out-of-stock items, with 13 percent of consumers waiting for items to be back in stock.

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