As conversations continue to circulate about brands discounting massive amounts of surplus inventory, another story related to inventory issues is starting to emerge.
When retailers have inconsistent inventory levels, especially ones out of a company’s control, such as supply chain-related issues, retailers face the challenge of how they will relieve themselves of their surplus inventory without hurting their bottom line. Unfortunately, for some brands, their solution is one that is not only hurting their brand image but hurting our environment as well.
Many brands have faced public backlash for the amount of inventory they dispose of each year. Instead of finding other ways of moving their idle inventory, they settle for the hazardous route of disposal. Companies are disposing of inventory as a quick, short-term solution to their inventory woes. This practice has been around for decades, but as millennial and Gen Z consumers place stronger importance on sustainability, brands need to take a step back and see how they are handling their inventory management.
According to a report done by Deloitte, one in every three shoppers reported having stopped purchasing from particular brands due to ethical and sustainability issues. This number is only expected to grow as consumers continue to adopt more sustainable lifestyles.
Now more than ever, brands have an opportunity to prove to consumers that they are listening and taking sustainable action. There are many eco-friendly solutions out there to move inventory out without hurting the environment or your bottom line.
Adopt an Inventory Management Strategy
Several companies have found themselves with mountains of surplus inventory that they can’t seem to get rid of. Inflation and supply chain issues can play a role in this, but in some instances, surplus inventory arises when a company doesn’t have a proper inventory management system in place.
An efficient inventory management system allows companies to monitor and track inventory, ensuring there is the right amount of inventory at the right time. When unforeseen issues arise, companies can rest assured that they are equipped to handle whatever may come their way.
The Rise of Upcycling
A sustainable practice that has gained momentum over the past couple of years is upcycling. Upcycling is a process in which a product is given a “new life” by fixing or improving the same product. Upcycling has become a popular practice with Gen Z’s and millennials and is starting to gain traction in the apparel industry. Upcycling is a great sustainable strategy that can help save perfectly good garments from ending up in landfills, not to mention a creative way to repurpose products.
Aside from sparing landfills of more trash, upcycling also has less impact on the environment compared to recycling. Upcycling uses less energy, water consumption, chemicals and harmful gas emissions since products don’t have to be broken down to be properly recycled. Some brands have already hopped on the upcycling bandwagon and have instated upcycling initiatives by buying back products and finding those products “new life.”
Discount, Discount, Discount
With inflation, consumers are keen on finding great deals and discounts to save a little money. If your company is stuck on what to do with excess inventory, try applying discounts to help clear out idle stock and free up valuable warehouse space. Companies can also utilize off-price retailers to purchase excess inventory. Not only will discounted inventory benefit customers, but it gives new customers an opportunity to try out your inventory and gain customer loyalty.
One of the biggest contributors to landfills and unsustainable inventory disposal is the fashion industry. With the rise of “fast fashion,” the fashion industry is responsible for 10 percent of global carbon emissions. To make matters worse, only one percent of clothing worldwide is recycled and 99 percent ends up in landfills.
Instead of partaking in this insidious strategy, consider donating your surplus inventory. There are several charities, both local and national, that accept a wide variety of product donations – especially clothing and apparel. With donation, not only are you making a contribution to help the less fortunate but in turn, combat the climate crisis by not disposing of your inventory. Donation is a viable option for idle inventory that may even come with tax benefits. If your inventory isn’t donation-friendly, consider rewarding loyal customers and clients with surplus inventory in the form of gifts and samples. Not only is this a great way to maintain and build customer and client loyalty, but it will help drive sales in the future.
With so many sustainable solutions available, there is no reason companies should opt for disposing of their excess inventory. Companies have an opportunity to prove to their customers and clients that they are taking sustainable action with their surplus inventory. Many of these eco-friendly strategies not only benefit the environment but may help your company’s bottom line by maintaining loyalty with environmentally-conscious consumers. Reach out to Net Trade to learn how we can help relieve your company of surplus inventory and keep your business moving forward.