As reported in the Wall Street Journal, a 10% tariff is scheduled to take effect on many Chinese-manufactured clothing and footwear products on September 1st. A last minute delay announced by the USTR means that the tariff will not take effect on some goods until December 15th. Still, delay or no, the cost of importing products is going up.
What that means for brands, retailers, and their customers? As much as $44 billion of imported apparel and footwear will come with a higher price tag starting either in September or just ahead of the busy holiday shopping season.
That means brands and retailers are in a tough position — they can either pass off the additional costs to shoppers, opt to eat some of the additional costs, or reduce inventory. But, with fierce competition in the apparel market, and out-of-stocks costing retailers an estimated $1 trillion in annual sales, these options are unlikely to work in the long-term.
Luckily, with the right systems in place, brands and retailers can get smarter about their inventory, rather than relying on price increases or higher costs to weather the storm.
You Need Real Time Data
Real-time enterprise-wide inventory visibility across all of your channels is absolutely essential to running a successful omnichannel retail business. Without this holistic view of sales and stock, you run the risk of overselling, overstocking, and/or overpromising.
Picture this: Your Boston store or pop-up location may place a customer order for a dress that should be in stock in Chicago, yet actually sold out two hours ago. Your warehouse may initiate a transfer for 40 units of earrings when they see San Francisco’s stock is low, when in reality earrings are one of their poorest performing items with an abysmal sell-through. These are prime examples of how to lose profits and potentially upset customers.
Regular partial inventory counts are better than annual inventory audits
Quicker and more manageable, partial cycle counts should be done at least monthly in your brick & mortar locations, or, as soon as a discrepancy arises (i.e., your inventory management system states that you have an item in stock when it’s nowhere to be found on the sales floor or backstock).
Waiting a full year between physical inventories means you could be sitting on many undiagnosed issues—employee theft and extended periods of mis-selling items being two of the most concerning.
If your investment in inventory is growing because of the conflict between Washington and Beijing, you need a system that can support a dynamic and continuous inventory management process.
Register today to take Springboard Retail's POS and retail management platform for a free 7-day spin, and discover how its robust CRM, custom reporting, and more can revolutionize your retail business!