Inventory Management

In 2012, American consumers spent $580 billion during the holiday shopping season. Holiday spending has been on the rebound since the economy began recovering. That trend is expected to continue this year. As a small business owner, it's extremely important to be prepared. Ensuring you have all the necessary inventory on hand and that your shipping procedures and marketing initiatives are in order are a few of the biggest factors that can determine the profitability of your company's holiday season. For now, let's focus on inventory. Here are some tried-and-true tips for managing inventory during the busiest season of all:

If you're wondering why stores seem to be slashing prices earlier and more aggressively than in past holiday shopping seasons, here's one big reason: Many of them simply ordered too much stuff. And they don't want to get stuck with it in January.

Instead of just tagging merchandise before it's purchased to prevent theft, Bloomingdale's is keeping some garments tagged after they're sold, too. The three- inch black plastic devices are in visible places, like the front bottom hemline, so they're hard to hide when the garment is worn. Once shoppers remove the tags, which can't be reattached, they can't return the item. Bloomingdale's is using the tactic to combat a practice known as "wardrobing" — buying clothes and using them once — a form of return fraud, which the National Retail Federation estimates cost the industry $8.8 billion last year. 

Merchandise and inventory planning for catalog retailers used to be a thorough, highly detailed process from start to finish. The goal,

The item-level inventory accuracy enabled by RFID tagging will be a critical element for Chico's as it seeks to maximize sales opportunities from buy online/pick up in-store occasions. The confidence of knowing which items are actually available in each store will allow the retailer to arm store associates with customer-specific purchase history data, enabling highly effective cross-selling and upselling when the shopper comes into the store. Chico's Director of Store Technology Ken Silay and COO Kent Kleeberger laid out the technology and process pyramid that will be needed to fully enable this cross-channel appointment shopping. 

Retailers of all types — brick-and-mortar, internet, catalog and multichannel variations of the three — are facing the same inventory challenges, yet still view their issues from the bias of their primary channel. I was reminded of this while attending the recent National Retail Federation (NRF) Convention. Three observations that the Direct Tech contingent brought back from NRF seem to support this view: 

For 30 years I've advocated for more detail in the planning process. Now, however, I believe the best response to this overwhelming new reality is "less." Less data, less complexity, less time planning insignificant details. It's time to focus on the right planning, to free up your time and brain so you can make sound decisions that affect sales, profits and cash flow. 

For operations professionals in the cross-channel retail industry, the risks and rewards of the holiday shopping season are well known. Order peaks can be five times to 15 times higher than the average week. If you get behind processing orders, you may not recover until Christmas is over. For many companies, the entire year's profit results from fourth-quarter sales.

Lowe's is engaging the services of Microsoft to help improve its customer service. The company has agreed to implement Microsoft Office 365 across more than 1,745 stores, 200,000 employees and its corporate offices in the United States, Canada and Mexico. Office 365 will help the home improvement retailer improve customer service by providing collaboration tools to increase communication among its stores and employees. "Office 365 is another tool we're using to help redefine customers’ home improvement experiences," said Paul Ramsay, senior vice president of IT solutions at Lowe's. 

PVH Corp. will open 600 Izod shops inside J.C. Penney department stores in September, Women’s Wear Daily reported. The new in-store-shops will range from 600 sqare feet to 1,000 square feet in size.