How to deal with overstock, a significant challenge in today's retail landscape?
Overstock is a significant challenge in today's retail landscape, as demand for goods fluctuates. Perhaps an excess of items is ordered, while in other instances, the supply might fall short. This requires collaboration between retailers and brands to find effective solutions. Rallyware hosted a live conversation between two industry pros; Till Kaletsch, Marketing Manager for major bike brand IS:Y, and Robert Diehl, General Manager at Wolfi’s Bike Shop. Below are our top 5 takeaways from the event.
1. Communication is key
“Purchasing decisions affect the salesperson, and the salesperson makes a decision and it affects everyone in the company,” said Robert. “This transparency of exchange about what is really happening is what helps bring clarity, focus and priorities, which helps with a much more responsible selling of the product to the end consumer.”
Robert frequently communicates with his suppliers to get a pulse on what is happening in other parts of the world. Collaboration to exchange data and inventory details is key - “what inventory do I have, and what inventory do I need?”
“From a brand perspective, communication is the key, receiving honest information to get a feeling about how the market is really working,” Till added. “We have interesting new products and innovations, and we have to take care that there is a demand coming from the retail side, even if there is a lot of old stock on the market.” By maintaining communication with stakeholders, brands like IS:Y can provide the right products to their customers.
2. Timing is critical
In terms of digital strategies to target overstock problems, focusing on boosting product knowledge from the get-go is important.
“We are trying to provide the perfect information for a product when it enters the market. When a retailer receives a new model of a bike, we are trying to provide the knowledge collection for the product exactly when it’s there and when it’s new, so the salesperson can get all the information they need so they are able to have a sales consultation on the product,” Till explained.
3. Focus on responsible selling, and don’t be afraid to get creative
Robert touted responsible selling, meaning they don’t want customers feeling like salespeople are trying to shove products down their throats. “There is so much more that can be done without having to start discounting,” he said. “I’ve seen this with many brands, that they go down the route of price cutting and clearing, maybe not for monetary reasons.” Robert shared a story of his team purchasing new inventory from a supplier, but they then realized the older model was better, as it offered more frame sizes, and bought more of these frames. “I have a solution to someone’s problem which no one else has, which comes from an understanding of your market and your customer,” he said.
4. Knowledge is power
Getting down to basics is also important - understanding who your customer is. “Do you know who you are, what you’re selling and who you’re selling it to?” Robert asked.
In addition to understanding your customer, having a thorough knowledge of the product is also important. “I think the most important thing is to understand the product, not only its features but also benefits," Robert explained. “Once you engage in the right conversation with the customer, you will identify who the product is for.”
Robert offered the example of ordering spare bicycle parts. While the team may not know who will need these parts, nor the likelihood of future uses, it remains crucial to have, from a customer service standpoint. Identifying vulnerabilities in this manner enables communications with the brands , ultimately contributing to the establishment of consumer trust.
Perhaps a retailer purchases an excessive quantity of bikes which are the wrong size for the majority of the population. Resolving a situation involves acknowledging the mistake and addressing it collectively as a team. This all comes back to the importance of effective communication, customer understanding and product knowledge. Are you sensing a recurring theme here?
5. Acquire the right brand training tools
This is why it is critical to leverage coaching tools like Myagi - to gather feedback directly from frontline sales associates and gain an inside look at how products are performing. To deliver engaging and detailed brand content to upskill salespeople. It requires some coordination, but together, brands and retailers can take a targeted approach to tackle overstock woes.
Book your demo to see how Myagi can help solve your overstock woes!