Stabilising Inventory Levels Amidst the Covid-19 Pandemic (Bonus Video)

Stabilising Inventory Levels Amidst the Covid-19 Pandemic (Bonus Video)

Written by Phung Yi JunMarch 26, 2020

Stabilising Inventory Levels Amidst the Covid-19 Pandemic (Bonus Video)

The fashion industry is currently in unchartered territory – especially with so much uncertainty around the COVID-19 pandemic. Omnilytics’ report, Fashion Retail & the Covid-19 Crisis, details the impact, with no part of the retail sector left untouched. Supply chain is one of the hardest-hit pieces of the puzzle. 

Retail in Italy is currently in survival mode. Prime Minister Giuseppe Conte announced late March 21 that manufacturing for luxury goods must be halted, disrupting a $107.9 billion dollar industry. China, the epicentre of the virus, faced a similar predicament in late January, affecting retailers on a global scale. While the country has since bounced back, the industry there is likely to see low demand, as the virus’s impact shifts to the rest of the world. 

Inventory levels are facing similar volatility. Zara, for example, recently wrote off €300 million of inventory (US $335 million), a result of slow sales and a high number of off-season styles. With supply chains disrupted and a decrease in consumer appetite, retailers will find themselves in a vulnerable position, indefinitely hitting their bottom-lines.

Challenges Ahead

With minimal insight into current sales demands, merchandisers cannot accurately forecast future production and buys. On top of that, retailers have to face pressing issues: understocking or overstocking problems.


Overseas suppliers are cancelling orders they are not able to fulfil due to the slow recovery on production and low supply in raw materials. Any delay in logistics and shipping will impact newness. Private labels or smaller brands are the most affected in this situation. They’re experiencing a shortage in stock, but cannot easily switch suppliers. 


With a drop in demand, brands are finding themselves stuck with mounting stock and no clear avenues for clearance. In this case, brands are actively reducing future orders. An agent told Sourcing Journal that $100 million worth of orders have been cancelled with Bangladesh’s supply chains. Luxury and fast fashion brands alike have also either cancelled or postponed orders to mitigate losses. 

In this time of crisis, it’s imperative to develop a tactical response strategy. In this video, our experts have identified a few key solutions to help retailers manage inventory effectively.

Key Solutions

Retailers must move stagnant stock quickly to different sales channels, a crucial step Gucci and Moncler have already carried out. As more countries implement preventive lockdown measures, customers are increasingly turning to online shopping.

#1 Optimise Assortment Allocation

To capitalise on this moment, retailers need to first optimise their assortment allocation to clear inventory. Asking themselves, ‘Would this dress work better for Asos or Boohoo?’ ‘Where else can I distribute stock?’ Careful assessment of the different sales channels available is necessary.

How to Manage Inventory Effectively Amidst the Covid-19 Pandemic | Assortment

Omnilytics works alongside you to help tailor the right assortment – down to subcategory-level and colours to the right channel – so you’ll see maximum results.

#2 Maintain Newness 

Consumer appetite for newness is impacted, but it isn’t gone. Given the current climate, it’s crucial to strategically plan phasing of product launches with insight on competitor shifts.

With an extra eye on competitors’ launch frequency and newness rates, retailers can better adjust their newness launch schedule.

How to Manage Inventory Effectively Amidst the Covid-19 Pandemic | Calendar

With Omnilytics, retailers can analyse the number of SKUs launched by a competitor – this allows retailers to re-strategise for maximum impact. To get deeper insights, all it takes is a click to view the variety of styles offered.

#3 Gauge Current Demand

Without an accurate view of current demand, retailers must look for other avenues to make the next decision. Using data from Omnilytics, retailers can perform a market-level analysis to spot opportunities and risks across segments and distribution channels.

How to Manage Inventory Effectively Amidst the Covid-19 Pandemic | Trends

In the example above, it’s clear that Blouses, Crop Tops and Wrap Tops are risky investments for now, while T-Shirts and Polos present an opportunity for retailers to capitalise on.

With this information, retailers can either resurface existing stock of T-Shirts to sell or quickly manufacture with a supplier that is still operating. 

Your Immediate Action Plan

In Omnilytics’ Fashion Retail and the Covid 19 Crisis report, our team of experts detailed an immediate action plan for Inventory Management, as well as other key strategies to strengthen and secure sales and develop dynamic merchandising. 

Download the report now.

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