No, not the ones that will adorn many dining tables on Thursday. But the "turkeys" lurking amidst your inventory. You know; non-selling, distressed, slow-moving, old, unappealing leftovers among your merchandise.
But this year, frankly, our worries extend beyond the turkeys.
Here are some of the reasons why.
- All the gloom and doom talk about the economy and recession continues, affecting consumer attitudes.
- With few pandemic or supply chain issues, many retailers have more-than-ample inventory this year, unlike the previous two years.
- Inflation is impossible to ignore, especially for those who drive cars or shop for groceries.
As a result, in this environment, consumers are scaling back their discretionary purchases, and/or choosing to spend on travel, dining out, or other experiences versus retail merchandise.
Not an upbeat prospect for retailers, is it?
See where this is going? Some retailers could end the year awash in inventory, and rising debt, just as the shoppers choose to spend their time and money elsewhere.
How to deal with that? You cannot control the economy, or the pundits, or particularly the shoppers.
So, focus on what you can control! Set a targeted ending inventory dollar amount to have on December 31.
No matter your size or the number of stores you have, whether your goal is to end the year with $100,000 in inventory or $100 million, it is imperative to have a specific ending inventory goal.
Immediately, start doing everything you can to reduce that inventory to reach that goal!
- A "turkey hunt" in your store is a good start, but don't stop there.
- Focus on the excess inventory, the "too much of a good thing."
Yes, the inventory you must reduce includes plenty of good merchandise. But that's the opportunity for you: Remember, your customers don't want cheap steak. They want steak, cheap! Especially these days.
Don't dawdle! Revisit your planned markdowns for Black Friday and the Saturday after Thanksgiving. A great time to take advantage of the customers who are shopping (and shopping for bargains.)
- They want your good merchandise, especially when it's marked down! (Noticed how they have been asking more frequently about special discounts?)
- Remember, your goal is to end the year with as much cash as possible. With cash, you have choices.
If it is not going down fast enough, sharpen your markdown pencil. This is not the time to worry about margins. Taking a 25% markdown in December is preferable to a 50%-60% markdown in January!
For your peace of mind, especially this year, that inventory must be turned into cash. Remember, "Happiness is positive cash flow!"