As a furniture industry professional, you don’t need a trip down memory lane to be reminded of the extremes of the past couple of years since the first stores and factories began to shut down. Everyone is acutely aware of the impact of shipping costs, supply chain delays, inventory availability, production capacity, etc., especially the team at GTRsuite.
After all, our only reason for existence is to help you generate leads, sell more, and foster increased customer intimacy. But between the crisis of closed locations, selling everything in sight upon re-opening, and being unable to fulfill orders (both to retailers and consumers), this is a message few manufacturers or retailers wanted to hear.
An Avalanche of Inventory – Warning Signs
However, as we begin to return to some level of normal, a new problem is showing up on the horizon – and it just happens to be one that GTRsuite can help you with and needs attention – Getting ahead of increased inventory.
How do we know there’s an impending mountain of inventory? Let’s look at some key indicators:
· About nine months ago, manufacturers started ordering in record quantities to meet unprecedented and pent-up demand. This inventory is now being delivered, just as demand has fallen by 25%, interest rates have rocketed, and so many other factors influencing furniture purchase have created headwinds.
· The time between an importer taking delivery of a container of product and returning it empty has increased by 50%. This is due to retailers trying to avoid the current disruptions and landing back-to-school and Christmas items much sooner than they ordinarily would.
· An increase in the number of sales, deeper discounts, and other measures are all designed to clear out inventory as quickly as possible.
The conventional tactics for shifting excess inventory don’t need any explanation here, but they’re often blunt and still require the ‘right’ buyer to be in the ‘right’ place at the ‘right’ time for the ‘right’ product to work. But, of course, the irony of this is if you can get it right in the first place, perhaps that deep discount might not be required after all.
Digging Out From Under The Problem
Deploying GTRsuite technology is the laser-guided weapon to address this oncoming onslaught of inventory. It starts with addressing the following issues:
1) Win the Local SEO and search race for shoppers looking for the actual products you have available in the warehouse or any of your closest dealers.
2) Remove as many obstacles and friction as possible to drive shoppers into your dealers/retail locations.
3) Maximize the customer experience to ensure that the product the shopper is looking for can be made available in-store when and where they want.
This is where technology is required to enable enhanced vertical integration between manufacturer and retailer. It also requires the manufacturer to become more proactive with their dealer network to bring solutions that optimize the interplay between the locations of the product, dealer, and shopper.
What Does This Look Like In Reality?
First, you must have a fully optimized Store and Product Locator. Google consistently rewards a search with highly relevant local content. The better you are to deliver a search result based on the geographic location of your products, the locations they are available, and their proximity to the shopper, the better you will score with Google. And the icing on the cake is that this traffic is usually completely organic (a.k.a. FREE!). Click here to read the Case Study about how Coaster Furniture increased their organic web traffic by 500%
Second, with increased traffic comes more high intention shoppers. Capturing shopper interest with online lead generation forms, routing them to dealers they prefer, maintains your control of the journey and is crucial to the sales conversion process. We call this the ‘Intention to Spend’ customer journey. Click here for GTRsuite Insights about how Acme Furniture increased its lead conversion rate to over 57%.
Third, with increased leads and direct-to-dealer communication comes a higher expectation from the shopper that their customer experience will be elevated. Any shortfall in this expectation will be punished, but meet it, and you will be rewarded with higher conversion rates and increased sales. Therefore, introducing dealer rankings (For example, Premier Dealers, Gold, Silver, Bronze, etc.) will allow sort criteria within the Store Locator, enabling shoppers to see those dealers most likely to respond and meet their expectations first, gaining insight into how each dealer will make a material difference to your success. Click here to read more GTRsuite Insights about our dealer responsiveness and lead conversion insights.
In conclusion, with respect to the impending excess inventory, before discounting your way out of it, think differently about your role in the entire supply chain and how technology that better vertically integrates that supply chain – essentially, how can you, as the conduit between the factory making the product and the shopper purchasing it, better connect all the pieces? As an exercise, rather than as a manufacturer or retailer, think about yourself as a marketplace. Upcoming blogs will explore and expand upon this idea in more detail.