Of all retail sectors, the fast-moving nature of the fashion industry makes an unruly inventory an all-too-likely risk. With the speed of social media causing trends to come and go in the blink of an eye, and customer expectations for speed and variety of products reaching higher than ever, it’s easy for fashion brands to end up overbuying – and frequently – in order to avoid going out-of-stock as demand shifts and changes.
If not tracked, this can result in a warehouse overflowing with outdated stock, creating blockers to cash flow that, in the worst cases, can shut down business entirely. This is a very real problem – according to a recent Inventory Planner survey, six in ten fashion retailers are currently sitting on a mass of unsold stock they’ve accumulated since the holidays. With an economic downturn that looks set to deepen, an overreliance on so-called ‘safety stock’ could land unprepared merchants in hot water.
Resilient retailers are using inventory planning software, such as Inventory Planner, to make informed and intentional purchasing decisions that turn inventory into a slick, money-making machine. Get inspired by these four fast-growing fashion brands using Inventory Planner to smash growth goals and optimize cash flow for their business…
As an Australian-born multichannel cycling apparel brand that operates internationally, Cycology eventually decided to escape ‘Excel Hell’ and join Inventory Planner. With around 2,000 SKUs for each product, the brand had relied on the manual inventory planning route for a while and knew that with more clarity, they could make more informed purchasing decisions and boost profitability.
By connecting its historic sales data with factors such as seasonality, supplier lead times and market shifts, Cycology uses Inventory Planner’s reliable forecasting to keep its most profitable items in-stock while avoiding a warehouse stuffed with slow-sellers – a revenue blocker that can become a potential killer to cash flow. Founder and CEO Michael Tomchin estimates they’ve saved around $100,000 a year with the tool.
“If you’ve got a heap of small-sized products but you’re out of stock of large, which is the one everyone goes for, you’ll lose out on sales and have capital tied up in inventory that’s not moving. It’s of absolutely no value to have heaps of the wrong sizes and it’s a massive risk to cash flow.
“[…]The harsh reality is that if you don’t take care of inventory your business will be dead. Inventory planning needs to be a spending and strategic priority.
“As merchants we happily spend a fortune on advertising, websites and design but might not spend anything on inventory planning. That’s crazy! Inventory planning needs more focus because it can be the difference between surviving – and not.”
– Michael Tomchin, Founder and CEO of Cycology.
Legacy ERP, Netsuite, had led women’s plus-size apparel brand Vikki Vi to an operational dead-end – so Founder and CEO Danielle Howe came to Inventory Planner.
The veteran brand has a steadfast customer base and 21 year track record, but with a core product line that consisted of similar items in different colours, sizes and styles, inventory had become harder to track. Products were also expensive to produce, so overbuying proved a costly blocker to cash flow – something Danielle was determined to avoid:
“It’s frightening as a retailer to overbuy – these days you could go out of business. Cash flow is everything. If dollars are caught up in inventory that you’re not able to sell, you can either go out and find more money somehow – or you’re in a situation where you have to discount to survive. But the more you discount, the more customers expect discounts. They aren’t going to buy at full price when you’ve previously given them 40% off.”
– Danielle Howe, Founder & CEO of Vikki Vi.
Since syncing Vikki Vi to Inventory Planner, Danielle’s team receives in-depth inventory insights across over 200 metrics, so they can accurately replenish their extensive collection of plus-size garments right down to colour, style, size and other variants, and create an optimized inventory with maximum selling potential.
What’s more, Inventory Planner’s data-led forecasting method has provided Vikki Vi with accurate purchasing recommendations time and time again, meaning the brand has eliminated the risk of over and understocking.
“Basically it’s helped me be in stock but not overbought,” says Danielle. “The forecasts are incredibly accurate.
“It’s all about the history – once you have six to eight months of data on a product you can trust Inventory Planner implicitly to predict demand. The numbers are always right.”
Freedom Rave Wear
Founded by festival enthusiasts Mike Hodgen and his wife, Alyssa, Freedom Rave Wear sells dazzling ravewear with a sustainable focus to a growing customer base of dance-lovers and festival goers.
With the unique edge of doing everything in-house – from marketing, product design and manufacturing, the alternative apparel merchant used Inventory Planner’s data-led purchasing recommendations in a novel way – to serve as a blueprint for what should be produced with priority. As the business is built on a dynamic ‘made to order’ model, using Inventory Planner in this way meant the average shelf life per product ended up being around 7-14 days, and inventory was optimized for maximum profits.
Additionally, Freedom Rave Wear was able to cut its inventory by two thirds using Inventory Planner insights – such as which slow-moving or dud items should be shifted and which hot-selling items would boost profit. As a result of keeping a slick, slimmed down inventory, the brand doubled in size.
“Inventory Planner enabled us to see early on, there’s huge value in making winning picks – whether you’re putting in a purchase order, or in our case, going to the production team. If you buy the wrong items and they don’t sell, that could end up being a six-month long mistake.”
– Mike Hodgen, CEO of Freedom Rave Wear.
If you’re a fashion retailer looking to transform its inventory planning processes and receive in-depth, data-led inventory insights, book a demo with Inventory Planner today.