With July 4th now firmly in the rearview, many retailers are starting to transition their seasonal inventory from summer fun to back-to-school items. Summer clearance may not be in full swing just yet, but the shift is already noticeable in both big-box stores and independent retailers.
While any 4th of July-specific items should already be on clearance, you may still have other summer inventory in limbo. Should you follow the lead of big-box retailers and move current seasonal items to a less prominent location? If so, which products should you now feature in your seasonal section?
If you're feeling unsure on how to proceed, doing a bit of community research and leveraging a few key metrics can help guide your decisions on when to move, clear, and stock seasonal inventory.
Community Knowledge
Understanding your community and nearby competition can go a long way in helping you define an optimal seasonal inventory strategy.
- Local Events: Are there summer festivals, fairs, or other events driving sales of festive summer items?
- Nearby Attractions: Is your pharmacy near a popular camping spot or park? If so, items like sunscreen, bug spray, and first-aid supplies may remain popular, warranting a prominent display.
- School Timings: When does school start in your area? Are school supply lists available? Collaborating with local schools can help you create timely product bundles.
- Observing Competitors: What are the stores around you doing, and what are they carrying? If they offer the same products at lower prices, you might need to adjust your strategy.
Data-Driven Decisions
While community insights and competitive analysis are valuable, data provides the most cohesive and accurate picture for informed decision-making.
- Product Movement: Have a hunch that packs of No.2 pencils won't move well until mid-August? Product movement reports can translate gut feelings into clear data on what is and isn't selling, so you can make confident decisions about what to stock and when. Historical product movement reports can pinpoint when seasonal item sales begin to taper off, making them especially helpful when determining the optimal time to start cycling out inventory.
- Inventory Turns: Inventory turns are the number of times you are turning your inventory over during a given period. While generally something you’d like to look at annually, assessing seasonal department turns can give you a clearer picture of its overall health.
- Gross Margin Return on Investment (GMROI): GMROI measures the amount of profit generated as products sell. It’s a key indicator of whether seasonal products are worth the investment in terms of time, effort, and shelf space. For every dollar invested in seasonal stock, how much profit does it return? Regularly calculating GMROI throughout the year will help you better understand your seasonal department's performance.
Ready to make informed decisions based on data? RMS can help. Schedule your demo today.
