For retailers, excess inventory means less warehouse space. For shoppers, it means discounts galore on the horizon.
The best option retailers have to move inventory out of the warehouse is through promotional sales.
“As many companies are still receiving goods that were delayed from last year, warehouses are busting at the seams,” states Joe Crews, owner and consultant of Key Warehouse Solutions with over 30 years of experience.
So that irritation at seeing holiday products and deals hitting stores before Halloween candy is gone? You’re going to see more of it this year…and much sooner.
Stores like Target have already taken the lead to move overstocked inventory with aggressive deals. They ran a Black Friday promotion from October 6-8 and are extending their price match guarantee through December 24.
While getting rid of too much stock is the goal, it comes at a cost.
“Unfortunately [retailers] will take a margin hit,” says Rael, referring to retailers forced to sell products at less than full price. But this is just a necessary evil to make room in warehouses.
He continues. “There will be financial implications but there’s an overabundance of inventory in warehouses and stores retailers have to get rid of.”
If the deep discounts retailers ran this summer were unsuccessful and fall sales fail to deliver necessary relief to warehouses, retailers could be in a world of trouble this holiday season and after.