Retail store closings are sweeping across the country. Even though the National Retail Federation predicted a good year for retailers, “especially for brick-and-mortar stores that added an e-commerce component to their business,” a research report from Credit Suisse said “ that it’s possible more than 8,600 brick-and-mortar stores will close their doors in 2017.” The last time a record number of closings like this occurred was in 2008. Back then it was 6,163.
But here’s a brighter story that may help worried retailers. Kohl’s efforts to manage a tight control of physical inventory in stores may actually be helping the chain’s bottom line.
“Continued strong inventory management led to a major improvement in gross margin, and our teams managed expenses exceptionally well,” said CEO Kevin Mansell. “We are encouraged by the significant improvement in sales and traffic for the March and April period, after a weak February start to the first quarter.”
Well, maybe there really is something to be said for embracing inventory management tools and services.
According to Hakon Helgesen, an analyst from GlobalData Retail, “There was far less surplus fall and winter stock…The better bottom line performance is mostly a function of more careful inventory management and a focus on cost reduction.”
An inventory management service can not only help keep accurate counts of inventory, it can provide comparison reports and analyses to help determine top sellers, what to purge out of the stockroom, how to price items for quick sales, and so on.
As retailers compete with ecommerce sites such as Amazon, and face challenges to keep physical stores open, it makes sense to create strategies for tight inventory control, as Kohl’s is trying hard to do. After all, inventory is the heart of any retail business.