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Several trends that were happening before the pandemic have been intensified because of changed behaviors during the pandemic.

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Merchandising and Inventory Guidance for the New Normal

Several trends that were happening before the pandemic have been intensified because of changed behaviors during the pandemic.

The trends to use more technology to run businesses, consumer interest in the environment and social issues, and growing consumer awareness of lab-grown diamonds are just a few of these trends. It’s important to understand how things are changing as a result of the pandemic, so you can prepare your business.

One change that isn’t spoken about very often, but which is very important, is the need for retailers to reduce inventories. Why is that a trend? For several reasons:

  • Consumer spending is expected to get tighter in the first half of 2021, after which we will see gradual economic recovery begin.
  • Consumers are showing considerable interest in personalized and custom jewelry, reporting that these are two big reasons to buy jewelry at a specialty store rather than online or at a department store.
  • Fashion in general is becoming far more diversified, making it more difficult to predict which inventory to carry.

The risk of stocking the wrong inventory is increasing, and when that happens, the cash you need to buy the right inventory is tied up on your shelves instead of available in your bank account. To be a more agile retailer, you need to invest in strategies and tools that make it possible for you to react to consumer demand quickly, even if what they want is not something you carry in your store. You need tools that make it easy – and exciting! – to share product opportunities with your store visitors and online meeting participants. Then, you need the ability to get the products your clients are interested in to the store . . . fast. Major retailers like Tiffany and Nordstrom have been actively experimenting with store concepts that have less inventory in the store while creating a perception of greater choice and availability for their customers. Both companies are investing the money saved on static inventory into services and experiences that delight customers and make them more loyal.

Consumer interest in responsible production and sourcing has also hit an all-time high. It’s important that you consider your company’s philosophy about responsibility, and then share that philosophy with your employees and customers. Consider having some product alternatives to satisfy a range of consumer concerns. Customers who are concerned about the social or environmental impact of mined diamonds appreciate the alternative of lab-grown diamonds. Customers who are concerned about the provenance of color gemstones appreciate having access to some with a clear source story. Your whole inventory doesn’t have to cater to these concerns, but you do need to have some products that cater customers who walk in and want socially responsible options.

Finally, the convenience of online shopping is not going away. Consumers love the idea of being able to shop from home, even if they intend to then go to the store to pick it up (or get their package curbside). We anticipate a future in which consumers decide how they are shopping based on how busy their week is, how tired they are, or how much they want to get out and look around. The world won’t be made up of online and offline shoppers – it will be made up of shoppers who know all their options and use them according to their needs.

Companies that have their entire inventory online, who can engage easily in Zoom-style selling, and who can help customers find anything they want – whether or not it’s in the store – will be able to attract new customers and maintain higher customer loyalty.

So the merchandising of tomorrow isn’t about pre-selecting all your inventory then hoping it sells. The merchandising of tomorrow is about curating a collection that reflects your brand, supplementing it with personalization, customization, and becoming your customers’ search-buddy to make sure that no matter what they want, you are the one that helps them find it.

If you haven’t done it recently, get everything out of the vault, spread it out so you can see it, and decide what stays and what goes. If it hasn’t sold for two years (usually we say a year, but . . . Covid 2020 changes our advice for the moment), decide how you’re going to get rid of it. Then, take the money you gain and use it to invest in the tools and training you need to support customers in the new normal.

Less inventory. More choice. It sounds paradoxical, but it’s the key to growing your retail business in the future. VDB is here to help you with website integrations, custom apps, and our massive marketplace of diamonds, lab-grown, color gemstones, and jewelry. All you have to do is pick up the phone, and we can get you started.