Except for the lingering sugar high, Halloween is well behind us. Retailers know what that means: on to the Holiday Season!

Of course, for most retailers that brings a major focus on sales. But, savvy retailers are especially focused on the targeted ending inventory on December 31. 

Those retailers are carefully watching sales reports, and are poised for action. 

Each week, they identify "What's not selling yet?" And they do something about it! Move it around on the floor? Display it differently? Pair it with merchandise that IS selling? Lots of choices!

What About Markdowns? 

What are we waiting for? The customers are here now. Do we really want to wait for January clearance sales?

This Is Outrageous

An article in the Retail Dive Brief* on August 5 jumped out at us with some fright. (We’ll get to what concerns us greatly in a moment.) Here's what was shared: As reported by Max Garland, Amazon Merchants who use Fulfillment By Amazon are advised to send their holiday inventory to Amazon during August and September, to arrive no later than October 19, a week earlier than last year. (And six weeks in advance of Black Friday.) And Garland cautioned, "Sellers who miss the October inventory receiving deadline may have tough luck finding space at Amazon’s fulfillment centers." But merchants need not worry. (And this is what concerned us.) Amazon can assure that "sellers will have enough room for six months of inventory on average." 👀

Use This Four-Day-Fourth To The Max!

Get "Freedom" From Old Merchandise

Find out how revolutionizing it can be to have freedom from old merchandise!

This year, the stars align. The 4th of July is on a Thursday!

We see it as a gift for retailers from the calendar gods. Four days, Thursday through Sunday. What a great opportunity for a true blow-out sale event!

The Most Dynamic Management Tool for Retailers

What is the "return on investment" of a retailer's largest investment? The GMROI calculation is the tool for the job!

GMROI – Gross Margin Return on Inventory Investment – indicates how much Gross Margin you get back for each dollar “invested” in inventory over a year. 

No other formula, no other calculation, simultaneously impacts both Gross Margin and Cash Flow. No wonder we consider GMROI as the #1 measure of inventory productivity.

And since inventory represents between 65%-80% of a retailer's total assets, it deserves a lot of management attention.

Let's start with a little "window shopping." Check below for the GMROI Benchmarks for just a few retail segments. 

• Yes, there's a lot of variation. In 2023, for instance, results for just these 6 segments range from $1.90 to $7.50. You'll likely see similar variations between departments in your stores, which is one of the advantages of GMROI. Which ones are most productive?
• Now look at each of these sets of Benchmarks charts individually, and their GMROI over the last 5 years. A few ups and downs, eh? Just not the same ups and downs for everybody. Note: GMROI's that are going up are sure preferable!

Is This Why Many Retailers Fail?

Maybe you've also noticed it. The recent articles about how retailers now have their inventories "more in line" after the glut of excess inventory caused by "supply chain disruption."

Okay. That's good news.

But, what jumps out at us is the frequent reference to "just-in-time" inventory management.

• Really? Tell us, What is the formula for calculating "just-in-time"? 
• What time is "just-in-time"? Is it 2 turns on the inventory? Four turns? Six turns? Twelve turns? Or what?!?

Look, if you can't measure it, you can't manage it. And, if you can't manage something, by definition (and experience!) it is out of control.

There is much enthusiasm coming out of the buying trade shows, and why not? 

Attendance levels have been near to or better than 2019. Energy levels are high, and very contagious. A sense of urgency persists, due to past supply chain issues, emboldening the pressures from the vendors to "Buy now!" 

Especially in today's environment, FOMO - the Fear Of Missing Out – can be a compelling sales pitch.

How to deal with this pressure, especially given all the headlines about a coming recession, or drops in consumer spending, or cautions about the need to control expenses, improve profits, maintain cash?

Here are two tactics to help you manage this. One helps monitor and control "How much to buy?" The other helps decide "What to buy?"

Managing inventory – arguably the #1 responsibility of a retailer – has been beset by a host of new and sometimes daunting challenges since 2020.

The last few months of 2022 only made matters worse. As supply chain issues seemed to subside, foreboding talk of a recession dominated, dampening customer spending. 

Many retailers are feeling a bit over-inventoried as a result. Similar to that sense of having a few added pounds after the holidays.

In other words, a situation that is crying out for perspective. And The ROI has you covered on that!

It Always Helps to Know "WHY?"

This is the time of year when most retailers are scheduled to take their annual physical inventory count. 

Along with that comes the interruption of daily lives, very serious attitudes of bookkeepers and accountants, and, of course, extra expenses. Oh yes, those!

Typically, preparing for and taking the item-by-item count involves a lot of emphasis on "Make sure to count everything. We don't want to miss anything!"  This often-loud focus is true whether the counting is done manually, by scanning, or any other means. "We must count it all!" 

Okay, but why? Why is it so darn important to count every last fish hook or candy bar or tube of lipstick?! 

It helps to know why.