They say that opportunity knocks but once. But you don’t have to passively wait for that. That’s what we’re going to talk about: how you can seize an opportunity with seasonal trends. Every business has its share of ebbs and flows over the course of a single year and across multiple years, and there are ways that you can plan your inventory management to make the most of whatever time you find yourself in. We’ll cover three things you can do to discover seasonal trends and adjust your strategies accordingly.
Use Reports to Spot Trends
Looking at the past lets you peer into the future. As you accumulate sales data over the years, depending on the type of inventory management software you use, you might just be able to run reports on sales made by country, region, state, city, quarter, month, week, and other criteria. Then you can compare that data from one year to the next to spot trends. Perhaps some products are increasing in popularity, while others are decreasing. Maybe one product is a higher seller in the fall than in the spring and for another product the opposite is true. The point is that all of this information can be used to help you make sure you have the right inventory in stock.
Adjust Your Inventory Levels
The more trends you see, the better prepared you will be to avoid both overstocks and shortages. You can keep your inventory at healthy levels by thinking of those levels as a moving target. For example, sporting goods stores don’t always want to have the same number of surfboards in stock because they’re quite a seasonal item. During the spring and summer they’ll probably want to have a lot more in stock than during the fall and winter because that’s just the nature of selling them. They’re made for warm weather. By constantly adjusting your inventory levels from one season to the next, you will be able to free up space in your stores and warehouses for more profitable goods. And that’s just one of the benefits you can expect by following this strategy.
Factor in Product Lifecycles
There are four main parts of the product lifecycle: Introduction, Growth, Maturity, and Decline. You can usually tell which phase a product is in by changes in its year-over-year sales. A product’s place on its lifecycle can have a big impact on how you approach stocking it and selling it. For example, you probably won’t want to stock up too much on products in the Introduction phase because they are still catching on, and you’ll have to spend most of your advertising efforts on educating people on the value of the products themselves. During the Growth phase you’ll definitely want to expand the quantity you have in stock because it’s exploding in popularity year over year. Plus, your advertising will switch from education to persuasion about why your product is better than ones from competitors that are trying to muscle in on your market.
Maturity is where sales plateau and even begin to decline a little. It’s tricky to predict what inventory levels are ideal in this phase, but you’re probably smart to hold things steady or even slow down a bit. And then the Decline phase comes when the market is saturated and consumers have moved on to another version or perhaps an entirely different product. You simply have to manage the decline in sales and keep lowering your inventory quantity until one day it may even fall to zero as something else replaces it entirely. Each phase has its own unique characteristics that must be accounted for. Identifying which phase each of your products is in will give you a good idea of how to handle ordering them.
See an Opportunity and Seize It
Like a ship sailing on the high seas, every business will have its ups and downs. You can fight the waves or you can go with the flow and figure out the right rhythm to your inventory management at different times of the year and over the course of a product’s lifecycle. Once you see an opportunity among your seasonal trends to better meet your customers’ needs, seize it!