Getting the right goods to the right place at the right time is more challenging than ever, given the length of the apparel supply chain and the global nature of the business. As a result, the industry has been plagued by overstocks and understocks, which each have detrimental effects on the bottom line.
Gary Barraco, senior director of product marketing for supply chain software firm E2open, sat down with Sourcing Journal president Edward Hertzman for a three-part discussion on how brands and retailers can improve inventory management.
In this first video, Barraco shares how retailers can use data to increase sell-throughs and minimize margin erosion.
“Traditionally, retailers would use their sales history data and someone with a really good gut instinct to do some manual adjustments to say, ‘Well, I think we’re going to sell more or less of this specific product,’ and that leaves a lot open,” he said. “That’s where you’d see markdowns and closeouts and where we [as consumers] could get really good deals on half-price items. But that isn’t the goal of retail, and in today’s economy, the margins have to be much tighter than that.”
Watch this video to learn which data is key to navigating uncertainties, including unpredictable weather patterns.
Then, stay tuned for the next videos in the series, which reveal the importance of collaborating with suppliers and transportation vendors, why platforming may not be the best solution for avoiding holding safety stock and the cost savings retailers could achieve by boosting efficiency.