05 January 2023, Mumbai
With the winter season and winterwear sale coinciding this year, winter apparel and accessories are literally flying off the shelves with many retailers, thanks to the huge discounts on them.
Excess inventory can happen for a variety of reasons, including unfulfilled orders, out-of-season merchandise, overproduction, and manufacturing mistakes, among others.
In order to maintain a healthy cash flow and succeed in business, brands must find a way to sell surplus inventory that they are unable to sell at full price (or even at a little discount) in shops.
Consumer exuberance
During the last few days of December 2022 shopping centers across India experienced high footfalls and crowds even during weekdays. Brands added to the festive cheer with end-of-season sales. From 20 percent to 60 percent off to half-price sales and buy one get one free, brands across the country began offering great discounts to customers. Retailers advanced the annual mega sales season by almost two weeks this year. Generally, sales are conducted in the first or second week of January.
Necessary evil
In the retail sector, it is inevitable. Off-price merchants can nevertheless make money by selling goods to customers at prices that are much lower than those offered by boutiques, department stores, and other full-price merchants because they purchase goods at such a cheap cost.
Brands are under increasing pressure to take action to fight waste at every level of the inventory life-cycle as environmental concerns rise. Fashion brands like Nautica, American Eagle, The Body Shop, Ritu Kumar, Marks & Spencer, Vero Moda, Guess, Mango, Iconic, Massimo Dutti, Charles and Keith, H&M, Rosso Brunello, Forever New, Hidesign, Rareism, Lacoste and Beverly Hills Polo Club are offering up to 50 percent off to customers.
Brands like Bath and Body Works, Aldo, Aldo Accessories, and Global Desi Girl are going all out this season by offering a flat 50 percent off on everything in the store.
With the offers continuing into the new year, brands and shopping centers alike are hoping that the shopping frenzy goes on.
Trade-off
After all, consumers are avid supporters of off-price commerce, which makes sense. Revenue is further reduced by holding expenses such as warehousing, insurance, and taxes. Further hindering a company's financial predicament is the inability to obtain loans at the best rates due to the sluggish monetization of inventory.
Off-price merchants can help in this situation. If the off-current price's success is any indication, things are looking up.
