Stepping Into Costly, Excess Inventory Problems

Those train-crash moments occur when a shopper returns something - say a pair of shoes - to a store that happens to not have that SKU in that store's localized inventory.

Problem #1: Shoes have an extremely short shelf life, at the end of which, the shoe is typically priced at a steep discount. Problem #2: Stores can't sell one or two products. The display unit would represent half of all inventory. So, again, that orphaned product goes on steep discount. Problem #3: The store could ship that shoe to a store that does have that SKU in its inventory. But you then have the hard out-of-pocket shipping costs as well as labor to prep the product - and multiple days involved in shipping. And you're still fighting against that extremely short shelf life.

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Keywords: retail supply chain, inventory control, inventory management, inventory management IT, supply chain management IT, retail inventory initiatives