Excess Inventory in the Aftermath of COVID-19


In the apparel world, Spring merchandise is typically purchased in the Fall. As we move through Spring and shelter-at-home orders remain in place, retailers are now faced with a dilemma: in the midst of COVID-19, there’s an unprecedented amount of inventory that will likely never leave the store shelves. That’s because consumers are focusing more on purchasing essentials than apparel. So unlike toilet paper, thousands of shirts, pants, and shoes won’t be in high demand—or sell out—this season.

Amid the pandemic, countless retailers are now closing their doors and are offering online deals in the place of in-store purchases. Nike, Macy’s, and American Eagle are among the retailers offering deep discounts for their apparel right now; still, once stores reopen, there will surely be a plethora of additional markdowns in preparation for summer and fall.

As the market braces for a potential recession, stores are finding themselves in a world of surplus. Retailers purchased Spring apparel months ago during a robust and healthy economy—and as a different reality strikes today, they’re now faced with having to decide how to offload the stagnant, excess inventory that will likely not sell: “This is an event that there is no systemic capacity to predict or respond to,” said Mark Cohen, director of retail studies at the Columbia Business School. “Everybody is trapped.” There is an “enormous volume of goods already sitting on retailers’ shelves or sitting in the pipeline. It’s going to have to be flushed out.”

As brands leverage their online, outlet, and factory store channels to sell, this will also present an opportunity for diversifying their channels and expanding beyond traditional methods. This is an unprecedented moment in retail, and calls for different measures;  deep discounts and traditional channels won’t be enough.

One way retailers can recapture revenue and offset loss lies with a B2B recommerce solution. Partnering with a secondary market expert that can build a customized B2B online auction marketplace is the way to go. A solution of this type allows for access to thousands of vetted buyers (which generate more demand), a consistent listing cadence, and a private, customized setting in which the seller can place restrictions on buyers—which protects the brand.

B-Stock’s auction marketplaces are customized and scaled based on each retailer’s needs and goals. That’s why nine out of the top 10 U.S. retailers are leveraging our platform to drive demand and achieve higher pricing, as well as a faster sales cycle—all while maintaining brand integrity. 

If you’re ready to harness the value of the secondary market and give your returns and excess inventory a second life by selling to a new sector of buyers, schedule a demo today.

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