Originally, I wanted to title this post: "S#!% Rolls Down Hill"; but in the interests of decorum I decided that headline should never see the light of day. Luckily, Reuters wrote up an article about my thoughts over the weekend, so I can reference that instead. The topic refers to the state of retail inventory as we enter the busiest season of the year.
Basically, with retail sales falling off a cliff last Fall, many retailers and manufacturers were caught with far too much inventory in their stores or warehouses relative to what people were willing to buy. After all, retailers were buying for Fall back in the Spring when things still looked good. Since the products were going to be marked down after the holidays anyways, retailers started markdowns earlier just to stop the bleeding. It’s the reason vertically-integrated retailers like The Gap were offering discounts like "Buy 1 Sweater, Get 3 Free". On the opposite end of the spectrum, Saks Fifth Avenue in particular took a lot of heat for severe markdowns on premium labels early in the season.
So this weekend, Saks’ CEO said in an interview with Reuters that shoppers should not expect to see the same markdowns this year, and in addition, if you see something you like, you should grab it while you can. Clearly, this is self-promoting by the CEO of a large retailer who hopes to sell stuff at full retail, but as the CEO of a much, much, much smaller retailer, he’s exactly right.
But retailers with less on their shelves is not the end of the story; the same is true of our vendors. Already this year, we have seen far more backorders from very reliable vendors than we’ve seen in years past. Core items are frequently out-of-stock causing frustration with retailers and customers, and seasonal items which are sometimes over-cut to allow retailers to re-buy, are already depleted. I’m shocked, pleased, and disappointed at the same time that we have already sold through all of the Bills Khakis Red Plaid Cords that I thought we’d have through December.
While I can empathize with consumers who don’t want to wait, many consumers probably don’t empathize with the retailers and manufacturers that are just trying to survive. And part of that means holding stock that more closely reflects newer, lower spending levels by consumers.
So long story short, there will always be deals to be had before Christmas Day — and more deals the day after — but this year in particular, if you see something that would make the perfect gift, it’s probably best to grab it while you can. There may not be another one in the back.