One quarter of businesses need to reduce their slow moving POS

One quarter of businesses experience challenges that impact on their stock composition, meaning the management of slow and non moving stock is a key requirement within their marketing operations.

by Paul Thomas | August 2015

One quarter of businesses experience challenges that impact on their stock composition, meaning the management of slow and non moving stock is a key requirement within their marketing operations.

In our latest piece of research, we found that 28% of brands and retailers today mark reducing the risk of stock obsolescence as a frequent difficulty faced, and attempting to bring this down is a regular part of their business function.

Why is this number so high?

Actually, this number isn’t too bad. On the flip side of course it’s suggested that three quarters of businesses have lean marketing operations, where wastage is a thing most frequently handled by their health and safety teams, or uttered one a team member disposes of (only) a half eaten Danish.

Nevertheless, as an industry we’ll only be happy when we’re at 0%. That may sound ambitious but our expertise shows that it can be achieved by following best practice and some strict regimes. After all, it unlocks significant capital held in your stockholding and actively reduces your marketing spend!

How can we avoid it?

For those businesses struggling with reducing slow or non moving stock, it’s usually because they operate highly complex business models with multiple teams and partner/ customer groups requiring identical, similar or completely different marketing collateral for their stakeholders. Couple this with the high pressure constraints of reactive retail propositions, campaign deadlines and committed media spend, and/or general consumption spikes, and you can have for some companies what transpires to be the perfect storm – and the impact can be an out of control stockholding.

Here at mda we’ve been fortunate enough to win some more major clients this year, with some of these on the back of exactly this, where the organisations in question have needed rescuing from a mountains of stock they were unaware they had – let alone that it had no further marketing value. Obviously we’ve helped turn this situation around, so the lesson here is it’s never too late, but the sooner you get started the bigger the cost savings you’ll have generated.

What’s the danger?

Well, one of the most key dangers is not knowing if there’s a problem.  Remember the famous Donald Rumsfeld ‘known knowns’ quote? Underneath the multitude of ‘knowns’ and ‘unknowns’ was a recognition that there are many things we’re unaware of, and as is often the cause it’s the ones we don’t know about but think we do that can be most unforgiving. That’s why you need to cover all bases and conduct deep analysis on your marketing collateral – attempting to aggressively disprove any feelings of things being fine is the best way to making marginal gains and creating both efficiencies and great performance.

You can find our 5 key tips for reducing your obsolescent stock below, but our biggest recommendation before then would be to analyse your current stockholding. Look into your stock categories (e.g. marketing print, consumable print, display, tactical), and find common areas of failure. Which customer groups, sales teams or users are the repeat offenders? Who’s ordering too much, and who’s using too less? There are thousands of data points you can interrogate, so start digging deeper and you’ll reap the rewards.

And if you’re not categorising your stock into fast, slow and non moving groups you’ll need to do that – and set best practice targets to give yourself a goal.

5 quick tips to reducing slow moving marketing stock

Dependent on whether you’re a brand or retailer will impact on how you can go about reducing your stock and the challenges you may face, but here’s 5 very basic tips to help you get started:

  • Repurpose old stock – If you’ve got pre-prepared marketing kits, break them down, pull out the parts that have future value and get them back onto stock. Don’t dispose of it if there’s something in there worth keeping
  • Force drops – One more for the brands out there, but a push campaign to distribute POS to specific outlet groups is a great way to generate greater customer goodwill and lifetime value than can often be found in the value of the stock – certainly if it’s non moving
  • Sales deals in the pipeline? – Have your sales teams got a deal in the pipeline that could go either way? Communicate your slow and non moving stocks to them – it might be something just to help sweeten the deal and help convert their opportunities
  • Create new limited edition kits – If you have a raft of non moving stock that individually has little value, rekit the parts into a bigger, better group of products
  • Aggregate demand – More so for future use, but use an aggregation tool to collate your teams future POS requirements, and hold them to it with in flight campaign reporting.

And sometimes there’s no choice but to dispose of stock – particularly where it’s time linked or heavily campaign related. Just make sure it’s recycled correctly when being disposed – indeed we’ve generate the equivalent of 61 years in renewable energy by doing so, so something we really recommend.

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