With key supply chain strategies, global retailers can boost sales, minimise wasted stock, and stay competitive in an increasingly cost-constrained supply chain landscape.
In a supply chain landscape that seems to get more budget-conscious with each passing day (or presidential tweet), retailers are looking to optimise their global supply chains and maintain profitability, which requires smart inventory strategies.
From prioritising stock replenishment in line with demand to maximise profit, to highlighting key supply points for customer demand locations to cut delivery costs, there are many ways that retailers can stay competitive and boost their margins in the coming months.
Inventory is king
Balancing stock is essential, particularly when it comes to seasonal items. An excess of slow-moving products might lead to markdowns and reduced sales, for example. Therefore, to optimise sales and turns, it is key to have the right stock in the right place at the right time across every fulfilment location.
Launching with less stock in stores
Launching a new product is always a bit of a tightrope walk. How much stock should be in-store from day one? For many retailers, that figure is around 70 per cent, however, over the course of a season, new items will sell varying amounts, depending on the location. Demand forecasts play an important role, of course, but they are rarely 100 per cent precise.
There are always influences beyond our control and foresight, from weather events to political activity to fashion trends. The question therefore is why put so much new stock in-store straight away, when it might only take up to 20 per cent to fill the shelves. With efficient replenishment operations and procedures in place, you can afford to be more cautious.
Evaluate how real-time demand performs compared to your demand forecast and allocate replenishment accordingly. This means an uptick in full price sales early in the season and thus reduced markdown sales later on, as well as less need to withdraw unsold goods.
Replenishing based on source of demand, not supply
One of the great advantages of the Internet age is that digital orders can be sourced from anywhere so, if you have slow-moving stock in one place, you can use it to fulfil digital orders from anywhere. There is a challenge, however, in that fulfilling digital orders can appear to boost stock turns at a specific place, when the reality might be different and have significant cost ramifications.
The closer the shipping point to the customer, the lower the associate delivery costs and the better the customer experience. Simply put, just because an item can be dispatched from a particular location, does not necessarily mean you should replenish stock to that site. Instead, consider demand and replenish stock based on the source of demand (where your customers are), not only where you ship from. And when considering demand, look beyond actual sales to unrealised demand.
Factoring unrealised digital demand into demand forecasts
What does unrealised demand mean in the context of digital sales? Consider the customer journey: each time someone visits your website, they might check on a specific item’s availability in terms of size, colour and other variables. That’s a demand signal, particularly, if the potential customer is checking local in-store availability. And, if that product is not available, it translates into a lost sale, but how can we measure the number of lost sales and optimise our replenishment protocols accordingly?
You can factor in unrealised demand using a modern enterprise inventory availability hub. These solutions help gather information, such as when customers check stock availability. This means you can see clearly the ratio of checks to orders and use that information to boost demand forecast precision far beyond what you can see with pure sales data.
Keeping costs low for retailers and consumers
In 2025, adopting budget-conscious global supply chain strategies is crucial for retailers aiming to stay competitive, increase profitability, and navigate market uncertainties. Prioritising inventory optimisation by balancing stock levels, launching with minimal initial stock, and replenishing based on actual and unrealised demand ensures smoother operations and higher sales margins.
At the same time, using advanced technologies like enterprise inventory availability hubs enables retailers to capture valuable data, refine demand forecasts, and minimise wasted stock, while strategic replenishment, based on customer demand locations, reduces delivery costs and improves the customer experience. By integrating these strategies, retailers can not only address cost pressures but also position themselves to adapt swiftly to unforeseen challenges. Ultimately, these practices pave the way for sustainable growth, stronger consumer trust, and resilience in the ever-evolving global retail landscape.
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