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Return Season, Inventory Challenges Eyed

Stocking, inventory management looking for a new normal after turmoil

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In a shift away from the inventory pileups that have long characterized the retail sector, businesses are increasingly adopting just-in-time inventory management strategies, aiming to streamline operations and align stock levels more closely with real-time demand. This move marks a significant departure from the "just-in-case" approach that saw retailers maintaining large inventories to buffer against supply chain disruptions. Leading the transition are companies like Tailored Brands, the parent of Men’s Wearhouse and Jos. A. Bank, which now forecasts demand up to 180 days in advance, allowing for precise inventory adjustments without the need for excess safety stock.

This strategic realignment towards just-in-time inventory is being facilitated by advances in technology, including AI and predictive analytics, which offer retailers a granular view of consumer behavior and demand trends. These tools enable businesses to operate with leaner inventories, reducing waste and enhancing efficiency, while also bolstering confidence in the resilience of the supply chain and logistics networks.

Amid these industry-wide changes, Flowspace and Two Boxes have announced a partnership that addresses the flip side of the retail equation: the challenge of managing post-holiday returns, which can significantly impact inventory and balance sheets. With e-commerce sales reaching $1.4 trillion in 2023 and returns averaging 16.5%, this partnership aims to turn the daunting $80 billion in returned merchandise into profitable recommerce opportunities. By integrating Two Boxes’ reverse logistics expertise with Flowspace's fulfillment platform, the partnership offers merchants a seamless way to process returns, quickly restocking items and leveraging returns as a strategic advantage rather than a logistical headache.

These developments reflect a broader trend in the retail and e-commerce sectors toward more sustainable and customer-friendly practices. The embrace of just-in-time inventory management, coupled with innovative solutions for handling returns, signals a shift towards more agile, data-driven approaches that promise to enhance operational efficiency, reduce environmental impact, and improve the overall shopping experience. As retailers and fulfillment providers adapt to these changes, they are setting new standards for inventory management that aligns with the evolving demands of the marketplace.

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