Stock replenishment in electronics stores can be a complex issue. Take seasonality, for example: it’s an important factor to consider, but not all products are affected in the same way. So-called brown goods, such as smartphones, audio equipment, tablets and laptops, can experience big sales fluctuations, depending on the period of the year. On the other hand, white goods, such as washing machines, fridges and other large home appliances, tend not to follow seasonal patterns.
How to manage stock replenishment for peak demand?
Effective stock replenishment in electronics stores involves understanding seasonal trends, consumer behavior changes, and leveraging technology. By planning ahead and utilizing automated systems, you can ensure you have the right products available at the right times, maximizing sales and minimizing excess inventory.
Here are five peak times that take place throughout the year, with our advice on how to stay prepared when it comes to planning the optimal item selection and availability.
Back-to-school season
Understand shifting consumer behavior
Consumer behavior has changed considerably in the past few years when it comes to school necessities. Not too long ago, notebooks, pens and a backpack were all students needed; today, tablets and laptops have become school essentials. Recent studies have shown that electronics are one of the largest back-to-school expenses for Americans, with an average cost of over USD$325 per household. People are also beginning their back-to-school shopping earlier and earlier, and consumer electronics is the item category whose sales spikes first – often still in July!
Stock up and promote strategically
To capitalize on this season, stock up on tablets, laptops, USB drives and accessories like cables and laptop bags early in the summer, and don’t forget to promote them with back-to-school deals, students’ offers and advertising early in the season.
Summer holidays
Prepare for vacation essentials
Summer means vacation time for many people, which leads to increased demand for items that can complement a holiday. Stock up on digital (and action) cameras, waterproof speakers, and camping essentials such as grills, battery-powered lamps and portable coolers. Be, however, mindful of weather variations.
Allow for flexible inventory planning
An unseasonably hot late spring and early summer could easily mean electric fans being out of stock and lost sales. The lesson? Don’t simply base your purchase plans on previous years’ sales history. Consider external data such as weather information, local events, like sports or festivals, and peak tourist traffic. Even if summer comes every year, you can’t always rely on the same replenishment strategy.
Sporting events
Take advantage of the "World Cup Effect"
Big sporting events can lead to a boost in sales for specific electronics items, such as large TV screens, display panels for smartphones, and hi-fi audio systems. This is known in the business as the “World Cup effect”.
However, research shows that the buying frenzy generated by these events usually does not grow sales, but simply moves them from one season to another. When planning your inventory around sporting events, do not overestimate the increase in sales, and be aware that during the months following the sport event, sales may not match previous years’. It’s important for retailers to do what they can to maximize their share of sales in the weeks leading up to the event. If you miss out, it can be challenging to catch up afterwards - and you don’t want to risk having too much stock on hand once consumer interest has petered out.
Product releases
Track industry announcements
Product launches can be times for record sales of electronics. Always keep track of industry announcements, and make sure you are well stocked when the release day comes.
Be aware: previous models become obsolete quickly
Keep in mind that demand for new products peaks quickly, and as soon as a newer model of the item is released, the previous one will rapidly become obsolete, and very hard to sell at full price. Use your replenishment system to plan the right number of items to order, combining a real-time view of your stock with insight into sales history, influences and demand projections.
Winter holiday season
Prioritize key sales period
The winter holiday period is a key time for sales: there are retailers that reportedly generate 80 percent of their annual profits between Black Friday and early January! According to data from the National Retail Federation, around half of shoppers plan to start their gift shopping In October or earlier. As more and more consumers gather gift ideas in-store long before the holiday season, make sure you have all the displays set up in-store well ahead of time.
Plan for demand
Even with good preparation, managing the winter holiday supply chain can be complex. You have to be able to understand which products will be most in-demand during the season (which is relatively easy for products with a sales history, but not so easy for new items), and automate replenishment of popular items (based on actual sales) during the holiday period. Make sure you have a replenishment system that allows you to add robust forecasting tools to your strategy, so you can more easily predict demand for products, and be sure to restock the correct amounts. Although you can’t completely avoid excess stock, a good way to limit your losses is to offer small discounts on products you over-ordered early in the season. You will drive up demand for the rest of the season and will be left with less excess stock come post-holiday time.
All year planning with automated replenishment
Mark key dates and analyze sales history
When preparing for a new year, make sure to mark all key dates in your retail calendar, and look at the sales history of your products well in advance of any important date. Even though the sales managers’ expertise may be needed to understand the volume of products you'll likely need to meet demand, an automatic replenishment system will be an indispensable ally in making sure you have all the right products, in the right quantities - and at the right times.
Create a sales plan
Create accurate sales plans using a good replenishment system. As Martin Kleindl, expert in replenishment at LS Retail, explains:
An item’s demand level can change dramatically during an item’s lifecycle, and is affected by seasons, events and promotional periods. A good replenishment system will enable you to create sales plans for each season, event and promotion. These plans, combined with information on current stock, demand and replenishment parameters, are the basis for accurate purchase orders and transfer orders to replenish your stores and warehouses. A software offering automated replenishment is key to having the right items in the right place at the right time during that all-important sales period.
Are you struggling to find the right technology to manage your electronic stores? Get in touch with our experts to find out if LS Central can help.
