10 Inventory Practices to Leave Behind in 2025
10 Inventory Practices to Leave Behind in 2025: Resolutions to Consider as Your Business Heads into the New Year
A new year calls for reflection—and when it comes to looking back on running a retail business, your mind can race with all the things that happened this year. From missed sales opportunities to macrotrends that were impossible to plan for, 2024 certainly brought with it many challenges, lessons, and considerations for what to change up in the future.
As we set our sights on 2025, the Boon team is doing its own reflecting, and we couldn’t help but share some of the practices we’ve seen through the years and how they can be a hindrance to a retail business’ growth. Read on to find out if any of these practices sound familiar—and to start thinking about ways to change things up come January.
10 Things Your Retail Business Should Leave Behind in the New Year
Not demand planning at all:
Has your 2024 been plagued with recurring out of stocks, unproductive inventory, or a general sense of SKU unease? We’ve had more than one client come to us feeling this way, and the solution always comes back to one thing: implementing demand planning.
Frequently, resource-strapped start-ups are full of people who passionately want to bring their product into the world—and while they have expertise in some areas of the business, there are parts they aren’t so well-versed on. But in an effort to stretch their budget as far as possible, they’ll try their hand at tasks they’re not 100% suited for. This results in team members being thrown into a highly specialized role or asked to ‘grow’ into the role of demand planning without being equipped for it.
In practice, these team members generally make projections based solely on past sales, treating all items as though they’ll sell at the same velocity and without considering factors outside the immediate data available, such as lead time from vendors, seasonal fluctuations, or that different products have different sales velocity.
With the new year on the horizon, it’s a great time to take stock of your current demand planning processes and begin compiling a plan to fill in the gaps (we’d love to help out!).
2. Buying inventory too generally or on instinct alone:
Briefly mentioned in the above paragraph, brands will frequently buy all of their items with the same strategy. This practice is common among newer businesses and results in excess inventory for the items that don’t sell as quickly and out of stocks for your most popular items.
While digging into the data might seem tedious, analyzing your product sales from multiple angles makes managing your day-to-day business much more fun! You’ll be able to respond to successful sales with more inventory, so you can fuel the sales fire and refresh your connection to customers with new and exciting items.
3. Expecting your software to do everything for you:
Whatever system you’re using for product planning and tracking, its outputs still need the guidance of an experienced human who can interpret and guide future decisions. Many software systems will give you a broad answer that isn’t specifically customized to your business, but when you have someone (or a team!) in place that actually understands what’s being provided, they’ll be able to develop an eye for the data and put a relevant filter on it, based on any seasonal or specific business needs.
Before you invest in more tech solutions, see if a human can help! We recently had a client come to us after struggling for years with various software solutions, never really finding an option that met their needs. Working with our team has provided them with a night-and-day difference—they can now easily identify top-performing items and categories and get early warnings about out-of-stock risks, so they never have to worry about disappointed customers (even with their sku-intensive assortment)!
Whatever system you’re using for product planning and tracking, an experienced human is still necessary for working with it, understanding the outputs and thinking critically about suggested sales and inventory data before you spend money on inventory.
4. Not looking at the business as a whole:
This practice often results in offering way too many styles or subcategories, and limits your ability to be strategic about raw materials costs and product margin. We had one higher-end athleisure client that did a great job planning their business on a category level, but didn’t have a way of looking at the sum total of each category’s performance to understand their sales and inventory positions across the whole business. This greatly limited their ability to do things like commit to raw materials that could be used across categories, which would help them maximize margin, or analyze their assortment so they could understand their overall inventory budget and regular receipt spending, prevent sales cannibalization and see when they were at risk of losing sales because of low inventory.
5. Starting a new sales channel without a specific strategy:
Taking advantage of new sales opportunities is key for keeping up in today’s crowded retail space—but just because you planned inventory well for your business in one channel, doesn’t mean those exact same assortment items and inventory strategy will apply to a new sales channel.
When expanding to a new channel, it’s best to rely on experts! Working with a team like ours, can help you avoid rookie mistakes and wasting your inventory dollars. One of the other benefits- using our current industry knowledge to inform your sales and inventory plans. Our team is currently working with a ton of brands across all categories of business. While we’ll never share their information, we definitely want to boost your business by giving you a real-time idea of what’s happening in the industry. Partner that with our decades of experience helping brands of all types add sales channels and know what to expect when forecasting sales and inventory across a new channel and you’ve got a recipe for success! If expert support isn’t possible look for learnings in similar channels or start with a limited selection of your assortment (think top-sellers only) to help your brand avoid the pitfall of overspending and getting your cash flow locked up in excess inventory.
6. Wanting to offer every variation under the sun:
We get it—it’s tempting to cast a wide net and satisfy as many customers as possible, but this can lead to you having A LOT of SKUs, many of which could be at risk of being unproductive. Remember number 4 (above) about having way too many styles? Committing to a ton of colors, flavors, or fabrications means you have to spend A LOT of money on inventory— and usually, your customers won’t be buying enough of your items to match that needed sales velocity.
Focus first on finding a few variations that sell well and ignore the temptation that comes with spreading your inventory too thin. Otherwise, you risk spending money on unproductive inventory that you won’t be able to recoup later!
7. Not implementing a structured SKU naming convention:
This one is SUPER easy, but don’t underestimate it! When you “name” your SKUs in your POS or other software systems, that name gets recorded and becomes a way to reference that product’s sales and inventory movements. So, if you’re regularly changing your product names, it creates a roadblock to analyzing sales and inventory accurately. By implementing a consistent naming strategy for your SKUs, you can better ensure that data is accurately getting catalogued for reference later down the line.
Two essential demand planning steps that are frequently overlooked and underestimated - purposefully implementing a sku naming convention you can stick with and taking the time to categorize and attribute every item in your assortment. Without these data points - analyzing performance and strategizing for the future are basically impossible.
8. Not taking product coding seriously:
Whether you haven’t built out a structure or you’ve just been lazy about it, product coding or categorization allows you to easily compare and understand information around a specific number of SKUs. While this may not be an issue for brands with one or two SKUs, retailers with a sizable product collection should categorize, subcategorize, and attribute items consistently so that they have every option available to them when slicing and dicing their data. This empowers you to get very specific about sales and inventory performance so you can maximize sales, margin, and overall profit.
Not attributing and categorizing your product limits what you’re able to look at since too much data grouped together easily hides underperformers, preventing you from seeing trends that will drive longevity and profit.
9. Being honest about your team’s capabilities:
This can be a tough one, but when it comes to the specialty that is demand planning, it’s essential to be honest about your internal team’s limitations—especially when you’re a bootstrapped startup that’s used to doing things on the fly. Identifying your blindspots shouldn’t be seen as a problem, it can be empowering! Handing over your planning to a team like Boon might feel like an unnecessary luxury, but that feeling doesn’t last long once you see the difference we can make.
Rather than just ‘figuring it out,’ spending time spinning wheels, and making costly mistakes, brands can springboard themselves into the future by letting us help you advance your sales and inventory strategy. The beauty of working with a consultancy like Boon is that it provides more flexibility than if you were to hire a new team member. You still maintain control over headcount and business strategy, but you have an expert on-hand to be a thought partner, for as long as you need.
And while you may not want to invest in strategy and execution skills, you can still lean on us for training and development. We frequently work with teams to equip them with repeatable processes and custom-built tools to teach internal teams the theory behind inventory strategy.
10. Not providing coverage for open positions or employees on leave:
Usually everyone on the team is working at (or beyond!) capacity, frequently doing more than just one job. When this is the case, it’s easy for strategy to fall through the cracks and for details to be missed. Hiring another full-time person takes a big investment from both a time and financial perspective, so when a position opens up or an employee needs to take leave, it’s easy to rationalize spreading that one employee’s responsibilities across the rest of the team. But that just leads to overworked employees who are more likely to miss things—not to mention not having the capacity to pursue new growth initiatives.
Getting outside help from experts empowers you to problem solve right away and with more budget flexibility than bringing someone on full-time. With support from an outside company like Boon, you also assume less risk since contracts are set up and can be re-negotiated on a time table that works for you!
Are there other practices you’re looking to leave behind in 2024? If you need a fresh point of view, set up an appointment with our expert team of planners to discuss how to start 2025 the best way possible!
