What Retailers Can Do with Excessive Inventory Pile Up from the Pandemic

Fashion merchandising can be tough especially with styles losing trend as quickly as they were gained. This results in over-ordered clothing that remain unsold or are marked down to margin-killing prices.  Retailers have been trying to traverse through these ambiguous times due to the pandemic, but they’re now facing a new problem: excessive amounts of unsold inventory. 

Moving inventory has become increasingly difficult with month-long closures of in-store shopping, resulting in severe financial, operational, and scheduling complications. 

Permission to open stores during the holiday season began to bring some hope to retailers, but soon after came months of closures which regressed any progress made with their inventories. Apparel retailers are struggling to move an overload of spring 2020 clothing in order to make room for this year’s collections. Are there sustainable solutions for this issue? Absolutely! Through research, we’re finding that retailers are being given opportunities to sell, repurpose, or recycle last season’s collections without sending excessive inventory directly to the landfills.

The pandemic has brought on a lot of unpredicted needs and amplified others. The need for clothing has increased significantly because of pandemic restrictions and outbreaks in shelters, which resulted in many people being forced to sleep outdoors and embrace the weather. Retailers can identify community needs and donate as they see fit, anything helps! Along with helping the community, donating unsold inventory also helps retailers reach sustainability goals and reduce waste.

Post-consumer textile recovery initiatives are taking unsold products made of cotton, poly-cotton, and polyester and are discovering new ways in which they can be repurposed or sustainably recycled. Repurposing and recycling helps move excess stock, while maintaining sustainability and reducing waste, which then leads to less waste going to landfills or being incinerated. This is the definition of “using less while doing more,” the key to an effective waste hierarchy.

Instead of wasting perfectly good clothing, retailers are getting organized and sorting unsold merchandise into categories for when the appropriate season comes around again. For example, this season’s winter clothes will be sold at a significant discount next winter. Sounds like a win, win to us! Future inventory savings will cancel out the cost of having to store the unsold garments because they will simply be resold instead of bringing in all new stock.

In North America, off-price retailers are a predetermined destination for excess merchandise. What you probably didn’t know is that these large department stores help reduce a ton of waste by purchasing last season’s clothing or stock that retailers deem unsellable. It’s possible that in the future more and more retailers will turn to off-price companies to handle their excessive inventory left over from the pandemic.

There is a downside to this route. The majority of these off-price retailers don’t have any e-commerce capabilities, so in the event that another lockdown occurs, they will be stuck with the same issue other retailers face.

Gif via @reubenarmstrong on Giphy

A recent study predicted that there is around $160 – $185 billion globally of excess merchandise from spring 2020 apparel collections. That’s more than double from previous levels.  This much excessive inventory can result in multiple production disturbances, such as delays in shipping, unforeseen technical issues, returns and more. Trends in the market obviously come into play when dealing with this issue as well. Retailers don’t want to be selling discounted winter clothing in April, but with planning and creativity this merchandise doesn’t have to go to waste. 

The future of the fashion retail industry is still difficult to predict with continued waves of the pandemic. However, right now is crucial for everyone in all corners of the industry to have a plan in place and prepare for the unexpected. Let’s not let last season’s puffer coat get in the way of a sustainable future in fashion!