Shifts in consumer behavior are difficult to predict, leaving many large retailers facing overstock this season. As shoppers moved away from the comfortable fashions that were in high demand during lockdown, retailers have had to invest in occasion wear as much as casual wear; less into homewares and maybe more into everyday accessories and travel as the world tries to meet in person again.
High-end e-commerce platforms like Net-a-Porter, Matchesfashion, Mytheresa and Ssense have started discounts early this season, all offering savings of up to 50 percent.
Other retail businesses, such as department stores, are also feeling the strain of excess inventory. It is believed that Macy’s and Target will adjust their earnings forecasts as they stock more goods than they can likely sell.
The Wall Street Journal reported last Wednesday that retail CFOs are resorting to discounting of excess inventory, which is eating away at profit margins. At the same time, they try to rely on predictive analytics for inventory management. As bottlenecks persist in global supply chains, retailers have been plagued by delivery delays for the past two years.
“The move just happened faster than expected,” a Macy’s spokeswoman told the Wall Street Journal. The New York-based company said it “received more inventory than expected as some of the constraints its supply chain was facing began to ease.”
Large stocks
Macy’s isn’t the only retailer with a large inventory of products that need to be sold at a discount. Target said in an earnings call last month that the company was overstocked in several categories.
With factories closed or operating at reduced capacity, many retailers stocked up to prepare for eventual material shortages and supply chain disruptions, such as that of the Ever Given container ship. It is believed that some of them have up to 40 percent more goods in stock compared to last year.
While this news is challenging for CFOs and retailers, consumers will have more bargain choices this season.
This translated article originally appeared on FashionUnited.uk.