Inventory Management 101 tells us that if we want to be successful, we must find the fine line between stockouts and overstock. So we apply what we know about demand forecasting and we do our best. What you probably don’t know is that many retailers are using the wrong demand forecasting strategy for their business model, and it’s leaving money on the table.
Profitable brands have realized that demand forecasting strategies are not one-size-fits-all. Especially in an industry where consumer trends are changing faster than a 14-year-old boy.
So does your demand forecasting strategy still fit? Which inventory management approach should you use? It really depends on what type of retailer you are – ‘Fashion’ or ‘Specialty Replenishable.’ If you want to make the best decisions for your inventory investment, start by identifying where you fall on the spectrum. Then go in with the right inventory optimization system for the job.