Seasonal inventory simply refers to products that are in high demand at specific times, festivals, occasions or seasons of the year, such as Diwali, Oktoberfest or Spring. Seasonal demand, often known as seasonality, refers to oscillation in demand for products that are depending on the time of year.
Seasonality is an important factor in inventory management, but these swings can make keeping track of your stock levels difficult. When most products experience some level of seasonality, it results in huge increases in sales across industries. So, the intelligent professionals at AWL India who are taking care of inventory management and warehousing solutions, understand that it’s critical to take advantage of a product’s seasonality because it not only helps our clients increase revenues but can also reveal a lot about the brand’s industry and target customer’s shopping habits. Brands wait for such occasions and build a streamlined and effective inventory management procedure ahead of time that allows them to track and analyse performance accurately once the period is over.
Not all Products are Seasonal
When planning and suggesting inventory at AWL India, our inventory management and warehouse team comprehend that not products are seasonal. Products like food items, alcoholic beverages, personal care goods, and other items with a continuous demand throughout the year are some of the greatest examples of products that are not seasonal. Hence, these items won’t be included in seasonal inventory.
People never cease buying food or booze, although they may change their purchases according to the season. If you sell products that respond quickly to seasonal demand, you’ll find that your sales and inventory levels shift with the seasons. During the summer months of May to August, for example, demand for swimsuits, shorts and cold beverages, for example, rises. During the holiday season, apparel and gift products are in great demand. Similarly, in winter, warm clothes and hot food and beverages are the most popular purchases. At AWL India, our highly advanced inventory management software that runs on complete automation along with our highly skilled warehouse professionals carefully plan and execute the inventory after accumulating and scrutinizing the previous and current data.
Sort Your Seasonal Products into Categories
What exactly do we mean when we say, “seasonal inventory”? To some extent, it depends on who is the buyer, when he’s buying and from where he is buying? At AWL India, we divide seasonal products into three categories:
- Product’s life cycle
- Seasonal length, and
- Purchasing lead time
The product’s life cycle relates to whether the product has a life outside of the season with which it is linked, as well as during the season with which it is related. Some products have sales tied to a specific season, like summer, winter or spring. There is less or no demand for these items outside of the season.
Diwali decorations, for example, are turned from a must-have to liability the moment the store shuts on Diwali Eve. But when Diwali is over, nobody buys Diwali decorations until next year. But some things are sold throughout the year, but there are seasonal peaks and troughs in demand. In general, the more seasonal a product is, the more difficult it to manage its inventory, and there are three major obstacles to overcome:
- There is a high risk of the post-season residual stock.
- Products must often be purchased before the start of the season, and
- Product turnover from one season to the next is typically high, i.e., sales of a particular item during a previous season cannot be used to predict future sales reliably.
The length of the season impacts how responsive you can be to real sales during the season. Short seasons, for which you must plan by sending the entire expected demand to stores in advance, and longer seasons, for which stock can be supplied multiple times, should be distinguished. The purchase lead time determines whether a purchase must be made in advance or if extra things can be purchased during the season. This defines the degree of risk associated with purchases made before the season’s commencement. If there is a considerable lead period, purchase selections must be made far ahead of the season. A short lead-time, on the other hand, allows sales during the season to be utilised to forecast demand and inform subsequent purchases. Highly advanced software used at AWL India’s WAAS (Warehouse As A Service) pre-reads the available data and suggest the best inventory management practices to our clients so that they can plan their products’ manufacturing with perfection and precision.
Seasonal Inventory Challenges
1. a Stock overabundance
When there is no or very little demand for your items, this is what happens. Stocking up your warehouses or fulfilment centres with too much inventory can damage your cash flow. And, if the product remains unsold for a year, you may find yourself with dead stock. Your business will suffer losses as a result of this. You may need to dispose of all the merchandise after a certain period by offering discounts, sales and buy and free offers.
2. Out-of-stocks
Assume you haven’t replenished your inventory before peak season. In such an instance, you’re more likely to run out of goods, which will lead to disgruntled customers switching to a competitor’s business. During peak seasons, your inventory is likely to run out of stock because it takes time for suppliers to refill stock, especially if you have any fulfilment issues or backorders from other wholesalers and distributors.
3. Make use of predictive analysis
Real-time technology constantly aids us at AWL India in making correct predictions about our customers’ stock and the stock they will require in the future. They may maximise their safety stock and keep what they need on hand to a minimum using predictive modelling. We keep in mind that we have a balanced inventory across all our warehouse locations.
4. Deadstock
Inventory that has not been sold for a long time should not be stored for long periods, since this will result in deadstock. As an incentive for buyers to purchase seasonal inventory, we advise businesses to provide promotional discounts and a clearance sale on all slow-moving items. Offer modest discounts throughout the off seasons, then offer massive discounts during peak season or as the season draws to a close. The primary goal should be to sell all seasonal goods as quickly as possible and turn them into revenue for businesses. Once the seasonal stock has been sold, businesses may swiftly turn their attention to the stock for the following season.
Inventory Management at AWL India
There are numerous industry-specific inventory management best practices we follow at AWL India, but here we’ve shortlisted a few of the best practices that help us and our clients in flawless inventory management at the AWL India’s warehouses.
1. Arrange inventory –into a hierarchy of most important to least important products.
- Best-selling, high-priority stock, constant reordering and regular quality checks.
- Medium-priority stock, valuable items and require monthly reordering.
- Low-priority stocks, bulk volume and minimum reordering.
2. Pick and Pack – Set of processes and tools to fulfil customers’ orders swiftly and efficiently. At AWL India, we keep optimising this process by improving our warehouse efficiency, and capacity, implementing WMS (Warehouse Management System), double-checking the number of items and using barcodes to keep a tracking detail of the orders.
3. Inventory KPIs – It measures the performance in a specific time attaining a pre-determined goal.
4. Safety-stock – It’s a small inventory we keep in hand to guard against variability in market demand and lead times. If safety stock is not in place then loss of revenue, loss of customers and loss in market share are inevitable.
5. Cloud-based inventory management system – Gone are the days of inventory in an excel format. At
AWL India, the cloud-based inventory management system is in place and used extensively. This allows us to make great decisions in terms of managing current inventory and forecasting future requirements. The cloud-based system is smooth and stress-free.
Inventory Management Practices that We Regularly Follow at AWL India
Diversify
Diversifying our clients’ catalogues is one of the finest methods for dealing with seasonal inventories. Offer products that complement the current range without immediately competing with it. If our client is offering cable knit sweaters, for example, the business may include matching heated underwear or a cap.
Predict
Most of the guesswork in estimating our clients’ inventory is eliminated with an inventory management solution. It calculates order ageing, sales, and return data. To observe the relative change between months, we advise using filters to classify goods by SKU performance or revenue generation. While it won’t remove seasonality, it will mitigate its effects on warehouse load. The longer a product sits on the shelf, the higher the storage costs become. Clients may assist improve their inventory by forecasting the inventory pipeline based on previous SKU performance reports. They’ll be able to figure out what stock levels they need to keep for seasonal items.
Demand Forecasting
Seasonal inventory levels can be predicted using demand forecasting. To evaluate whether online trends are temporary or seasonal, we use various automation tools and software and provide detailed insights to clients. Businesses can compare these to their sales records to predict whether the product will be in high or low demand. By changing inventory, demand planning may prevent stock-outs and dead stock problems.
Conclusion
Dealing with seasonal inventories is nearly unavoidable as a business owner. The ideal method to deal with demand changes is to partner with technologically advanced companies that are proficient in the management of seasonal inventory. At AWL India, using historical data combined with statistical modelling, data mining and machine learning, we conduct predictive analysis to make predictions for our clients stating future demands for their products. Fulfilment, which can assist businesses with end-to-end order and inventory management, allows them to perform effective demand forecasting.
Seasonal inventory management can be difficult due to the numerous variables and duties required, as well as the little amount of time available before the holiday season begins. At AWL India we’re very well familiar with all the above dos and don’ts that we discussed. As activities rise, the number of tasks to complete rises. Before going on to the chores, keep the list of tips close at hand. These will perform wonders for you, and that is, in some ways, what the seasonal inventory is all about.
