The post-Christmas sales season is a peak time for waste with millions of unwanted goods being returned, much ending up in landfill. When it comes to clothing alone, 311,040 tonnes of waste is generated each year.
However, according to a recent study by HP and Planet Ark, 90 per cent of Australians are concerned about the environment and clothing sales have plateaued. So, with consumer demand not growing as much as retailers would like, it is important to fulfil customers’ expectations to keep them coming back.
One way to do this, is for the retailer to be able to deliver the product to the customer in the shortest possible time. This doesn’t mean over-stocking stores or transporting items from one store to another, it’s about retailers working smarter.
Australian retailers can reduce the amount of products that go into landfill, to not only improve their environmental footprint but also increase profit margins.
Real-time view of inventory
The solution retailers need is a single version of inventory that is always available, in real-time that can be automatically updated. Poor inventory visibility leads to overbuying of inventory, overselling, cancelled orders, and ultimately, more markdowns.
Adding more fulfilment options and locations means orders can be made and delivered via any channel, anywhere. Finally, collecting data on all orders with fulfilment locations, demand and stock movement gives retailers invaluable insight to avoid overproduction. Order management software can help with all these challenges, whilst helping to increase profit margins.
Stop agonising over out-of-stocks and worry about overstocking
Australian retailers desperate to make a sale need to stop agonising over out-of-stocks (OOS) and give the same attention to the challenge of overstocks. Aside from the damaging environmental impact of creating more waste, this also puts pressure on manufacturers to produce more at a faster rate with fewer resources, resulting in subpar standards when it comes to ethical and sustainable production.
Despite the attention paid to the issue by shoppers, overstocks persist and there continues to be never-ending markdown cycles industry-wide. There are introductory offers, mid-season sales and end of season sales, and in between those are ‘frenzy days,’ like Black Friday.
Packaging and shipping
If you have a real-time view of your inventory, you’ll know where your products are. Order management software can help ensure products travel the shortest distance to the customer. If you don’t offer a Click & Collect option, look to implement one. This buying method is becoming increasingly popular and it saves the retailer from sending products to customers.
Offering ‘green delivery slots’ is another option. John Lewis and supermarket Sainsburys in the UK are enabling customers to book an ‘eco-delivery slot’ where a van is already going near their home, clustering deliveries, rather than having to make several separate trips.
Also, take a look at your packaging. Is it made from recyclable material and the appropriate size? How much waste is there? Can it be recycled?
Decreasing returns
Retailers can also improve the way they describe their products online to decrease the likelihood of returns which are not just costly to profit margins but also come with a huge environmental impact. Take a look at the photographs of your products online, could they be better? Ensure that measurements and sizing is clearly understood and that images shown accurately depict the quality of the item.
Recycle it
Retailers such as Ikea are accepting returned goods and selling them at a discount to prevent dumping. H&M is allowing customers to bring back their old garments so that the fabric can be recycled and startups like Glamcorner are renting dresses to customers rather than selling them.
Retailers can also become accredited with Ethical Clothing Australia to certify that their Australian supply chains are legally compliant. Once audited and compliant, retailers can use the ECA certification trademark on their Australian made products and in promotional formats.
If oversupply persists, donate it
If you’ve tried every other way to reduce oversupply and it still persists, then don’t dump goods in landfill, donate to an organisation like Good360, whose mission is to help companies donate excess merchandise to charities instead of destroying it.
Ensuring that the right products are manufactured in the right quantities at the right time and are delivered quickly to customers is a tough and ongoing challenge for retailers. Instead of focusing on producing more to meet demand, retailers need to think about the best ways to redistribute those goods and produce quantities more accurately.
By Graham Jackson, CEO Fluent Commerce
This article first appeared on retailbiz
