Seasonal inventory management: how to be prepared but still pack light this summer

The home improvement industry has been on quite the rollercoaster ride since 2020:

The uncertainty of what a global pandemic meant to retailers, followed by an unprecedented real estate boom and home renovation spree, and then sprinkle in a whole new group of DIYers with time on their hands and money to spend…

The last few years have been a whirlwind, to say the least. And yet still, as we enter summer 2024, things continue to change; markets have slowed and inflation continues to keep us all on our toes.

All of this means that home improvement retailers will have to stay nimble – ready to react to market flux while staying the course with summertime just around the corner.

“Your start-of-season stock levels should give stores enough to build and maintain displays while you can keep a suitable buffer stock in your main warehouse. The buffer stock should be calculated with particular care, especially where weather plays a significant part in driving or impeding sales. The buffer has to be big enough to be able to meet a sharp peak in demand. On the other hand, the buffer should be modest enough so that you can shift the entire lot if the weather is against you. The buffer stock should be run down after the main seasonal peak and maintained for the most critical products as the end of the season approaches.”

Level-set your expectations for Summer 2024

It’s enough to make your proverbial head spin… while there are no black and white solutions, there are a few considerations and proven methods to stay on track moving into June, July and August.

Many of the big stores see big numbers especially during celebrations like Father’s Day and annual Holidays such as the Fourth of July.

“To stay competitive, you may need to lower prices, diversify your offered services, or enhance marketing efforts to stand out from competitors. Retention will also be critical to ensure you don’t lose ground in your local market”.

TZR president, Mark Fisher reminds us that “Promotional calendars for 2024 are set and warehouse stock levels are ready for fulfillment by sophisticated systems and process, but the success of the season rises and falls on the people that drive these programs.  It takes professionals who understand the nuanced impact of seasonality and reading the market dynamics to pull off a successful execution of retail promotions.  Roles like Trade or Channel Marketing Managers and Supply Chain planners can make or break the success of your season”.

How to combat a less-than-favorable forecast?

Every year, we know companies will be keeping an eye on inventory, that’s retail 101. The industry lives and dies on inventory management. But in times of uncertainty, there is perhaps no area that needs more keen focus and strategic planning.

While year-over-year numbers may have historically been the primary determinant of inventory needs for an approaching season, we know that the last few years don’t always give the clearest picture.  

“A good sales forecast based on historical data and that accounts for seasonal variations is often enough to drive product replenishment for perennial products throughout the year… a calculated forecast combined with an updated reserve supply or shelf replenishment goal will normally provide a solid basis for managing its replenishment…”

Hitting quota also relies heavily on everyone from the store floor to the corner office understanding the importance of seasonal inventory management.

What will keep inventory moving?

School ends, summer starts, and it’s time to watch months of inventory planning unfurl in real time.

With all the ups and downs in recent years, Summer 2024 could be the perfect time to go back to basics, with a mix of tried-and-true initiatives that keep customers coming back while hunting for the best summer sale.

You need to appeal to your local customers with promotions and discounts that apply to their specific needs and shopping habits. “77% of consumers are prioritizing price over loyalty, according to recent Ibotta first-party survey findings.”

No one can predict the future, but market trends show us that the home improvement boom is righting itself and retailers in the space must prepare accordingly.

“As CPG brands look to maximize incremental sales during the summer months ahead, pay-per-sale promotional strategies can incentivize consumer behavior, ultimately driving new-to-brand purchases, shopper loyalty, and the bottom line.” Regardless of the season, recognizing why the changes are happening and adjusting strategies to fit the retail environment of ‘right now’ will ensure that an organization weathers the current storm and comes out better prepared than before.