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Why are Retailers so Overwhelmed by Overstocks?

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overstocks

[Image: Designed by vectorjuice / Freepik]

NO SURPRISE, the retail industry is swimming in excess inventory lately. Overstocks leapt forward by double digits in the latest quarter for a dozen of the nation’s largest chains, as they rebound from the supply shortages and out-of-stocks which have vexed them since early 2020.

Today on RetailWire.com, I weighed in on a lively discussion about this problem entitled: “Why are retailers struggling so hard to balance inventory?“ Certainly 20, 30 and 40 percent leaps in stock on hand are partly a sling-shot effect, since retailers over-ordered desperately during the 2020-21 supply disruptions. The situation has been rough on all retailers, but the apparel leaders are taking early and aggressive markdowns on overstocks that arrived too late for missed seasons.

Opinionated as I am about inventory accuracy in retail, I jumped on my high horse with a critique of the global manufacturing and shipping industries. I tossed in a not-too-subtle swipe at Adam Smith’s “Invisible Hand” for good measure.

The implications span both micro- and macroeconomics. Long lead times are too often tolerated in the name of scale economies. Big plays in highly concentrated markets set the stage for massive disruption when things go wrong.

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NRF 2019: Three Vibrant Themes from Tenser’s Take on BrainTrust LIVE!

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NRF 2019

LIVE FROM NRF 2019: My BrainTrust LIVE! report from the Big Show in New York, Jan. 14 2019.

Tenser’s Tirades reports from the crossroads of the Big Show floor as hundreds of attendees flow past. This year’s event boasted 37,000 registered attendees, 900 members of the media and more than 120 keynote, breakout, and vendor-sponsored educational sessions.

BrainTrust LIVE! January 14, 2019 – With James Tenser

Topic: Our BrainTrust panelist, James Tenser, reports in from the floor of NRF’s Big Show and boils things down into three areas of innovation he’s seeing as most prevalent at the show. [13 minutes][Posted by RetailWire on Monday, January 14, 2019]

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Millennials: The Next ‘Pig in the Python’

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FOR GRAYING BABY BOOMERS like me, the awesome power of demographics has in many ways defined our lives. There are a lot of us. We clogged our kindergartens, our universities, our workplaces, our media, our politics and our communities with sheer numerical might; and the retail marketing universe seemed to revolve around our needs and our sense of entitlement.

In his 1980 book, Great Expectations, author Landon Y. Jones called this phenomenon “a pig in a python” – a rather visceral visualization of how the boomers’ demographic bulge has traveled through America’s culture, distorting as it goes.

Along the way we also had a lot of kids. So many, in fact that we engendered an echo boom that is numerically larger than our own. In case you haven’t noticed, those 75 million “millennials,” as the demographers like to call them, now largely dominate cultural, political and marketing discourse. Not to mention our consumer economy – the 18-34 cohort wields $2 trillion in purchasing power.

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Rise of the Retail Robots

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rise of the retail robots

FRUSTRATED WITH STORE EMPLOYEES? Maybe a mechanical clerk is the answer.

The retail industry today is making some fascinating, promising, and perhaps troubling moves toward the routine use of autonomous retail robots in human environments. The efforts seem energized by technical advances, affordability gains, and increasing wages for their human counterparts.

“Everybody is beginning to talk about robotics as a way to remove labor from the system,” said David Marcotte, a senior vice president with consulting firm Kantar Retail, a friend of this blog, in an interview in the Star Tribune newspaper.

As a confirmed sci-fi geek (occasionally prone to paranoid fantasy), I’m both fascinated and a bit leery about this development. There’s little doubt, however, that the robots are coming to retail from numerous directions.

Tenser’s Three Laws of Retail Robotics:

1 – A retail robot may not harm, mislead or impede a shopper, or, through inaction, allow a shopper to fail to complete a sale or have an otherwise poor experience.

2 – A retail robot must faithfully implement the merchandising plans given it by retailers except where such orders would conflict with the First Law.

3 – A retail robot must encourage and protect the sale, as long as such protection does not conflict with the First or Second Law.

(Adapted with great reverence from i Robot, by Isaac Asimov.)

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