As the Coronavirus outbreak lead to the forced closure of non-essential businesses across the nation, apparel retailers seem to have stopped in time. Relying on online-only purchasing and the movement of essential goods, retailers have witnessed a standstill of stock waiting for the pandemic to pass, are set to be out of sync with the seasons and face exponential levels of overstock when the doors finally reopen.
The impact of the pandemic has been substantial on retailers across the world, but it is also forcing them to rethink their overstock and returns processes to clear the backlog and survive the crisis. So, what are apparel retailers focusing on now to help mitigate the unexpected loss that will be left when the lights come back on?
Preparing for the unexpected
Under normal circumstances, retailers would be luring shoppers in with new season pieces for the impending warmer months, but with the doors firmly shut, apparel retailers are finding themselves left with a mounting surplus of unsold inventory and nowhere to sell it.
Over the coming months, we can expect to see retailers playing closer attention to the supply chain – from cancelling or reducing seasonal orders to leveraging off-price retailers – apparel brands worldwide will be exploring the avenues available to them to reduce the excess inventory and offset the unprecedented losses caused by the pandemic.
As long as stores remain closed, profits are seriously hampered with warehouses full of old inventory and high numbers of returned stock taking up essential shelf space, which drains retailers ability to buy in new products to sell when the doors open again.
Growing volumes of overstock usually means retailers will look for quick ways to offload stock as quickly as possible – but with consumer attitudes and legislation changing to incorporate a more sustainable fashion industry – it is more important than ever that retailers dispose of this excess stock sustainably.
Secondary market is the key
As retailers and brands explore the different avenues through which they can offset loss, it is important that they utilise secondary-market solutions that have the capability to handle large volumes of excess stock sustainably.
An effective and sustainable way for retailers to reduce and offset more loss for their overstock is through B2B online auction marketplaces such as those built and managed by B-Stock. By selling via a B2B marketplace, businesses have access to a large buyer base (vs selling to one or two jobbers). The competition and greater demand on these platforms drive higher prices, a faster sales cycle and offers a golden opportunity for retailers looking to offload the mounting surplus of overstock in a sustainable fashion.
The secondary market can also prove vital for those smaller retailers struggling to keep up with consumer demand due to vast disruption to their original supply chains. Offering an alternative source of inventory, the secondary market can help to bridge the gap and provide a much-needed outlet for retailers to source necessary stock they are unable to receive through normal channels and help them to survive during a period of extreme uncertainty.
With every day that stores remain closed and stock lingers unsold on shelves, more retailers are expected to turn to the secondary market as a way to reduce the overstock in their warehouses, in order to sync back up with the seasons when the doors finally open again.
Giorgio Vitale, head of Business Development EU at B-Stock