Buying gifts, decking the halls and welcoming relatives: Welcome to the holiday season! Retailers might have a love-hate relationship with this time of the year. On one hand, shoppers are eager to wake up early and spend all day buying gifts. But managing returns and overstock inventory can become overwhelming. Now is the perfect time for retailers to consider profitable strategies for returned and overstock merchandise. The answer is simple: utilize the reverse supply chain.
Factoring in the constants
In retail, there are many factors that need to be addressed this holiday season when it comes to merchandise and overstocking. Take for example; products will fly off the shelves probably faster than they can be restocked. That’s great news for retailer, however, more purchases mean more returns.
This will come as no surprise to those who have been in retail for years, but due to gift giving, the holidays usually bring more returns than one can expect during any other season. These returns will spike at the holidays in the weeks leading up to, and the weeks following, Christmas and other seasonal holidays. Before gift-swapping starts, many consumers will return items due to buyer’s remorse, and many cannot be re-shelved due to strict return-to-vendor policies.
Countless consumers have gadgets on their holiday wish lists, but these products often have higher return rates due to cost and steeper product learning curves. Unfortunately, electronics cannot easily be placed back on shelves when they are returned.
Solving the problem
Fortunately, there is a solution to the holiday returns conundrum. Retailers can work with a trusted reverse supply chain partner who knows how to navigate secondary markets. With an experienced company by a retailer or manufacturer’s side, businesses can ensure that products are either properly returned to the vendor or sold in other markets where “B” product is in demand. On one particular occasion while working with a single client, Liquidity Services successfully sold returned and overstock product, deferring over 100 million units from landfills in the process. With its industry knowledge and access to buyer markets via established online marketplaces, we also renegotiated vendor agreements to ensure that strict RTV policies would be managed and adhered to, saving retail employee time during the holiday rush.
Black Friday is equally crazy for retailers as it is for consumers.
Adopting a new strategy this year
While Black Friday and Cyber Monday might get all the press, Restock Tuesday, the Tuesday immediately following Cyber Monday – December 2 this year – will be the main focus for retailers. Assessing inventory following these high sales events, such as Black Friday, will help retailers and manufacturers determine consumer demand for the holidays. However, with alternative methods via a trusted provider, these businesses do not need to stress about returns or overstock.
As mentioned, there are a few ways to manage overstock. First, retailers can turn to a trusted reverse supply chain partner whose core business is returns and overstock management. These vendors can help sell surplus through online marketplaces, ensuring that any excessive orders do not negatively impact the bottom line. Liquidity Services once sold 10,500 units in a single hour during the holiday rush by promoting the sale and targeting the right market of buyers.
Alternatively, retailers can consider restocking with refurbished products. This will guarantee that items can always be on sale, and companies can attract customers with great deals on products. A strategic partnership with a trusted partner will be essential for success.
The holiday season can be hectic, but the right planning and partnership can go a long way toward a successful pre- and post-holiday season.