While December brings frenzied activity for retailers, as someone who supplies support services for retailers, it’s deathly quiet.  I keep rattling their chains, but they are so distracted with selling that nothing else gets through.  You’d think after almost 30 years of this, I’d get the picture.

 But I’m ever hopeful since I know that when the final jingle bell sounds fade away, retailers will be faced with new buying decisions.  If they are unprepared with a solid buying plan, they will find that the markdowns they take on the excess merchandise from Christmas will not be their last. 

 Too many retailers need the Christmas rush to save their year so they load the store in hopes of squeezing the last dollar out of their customers.  And they do, but there is always too much left over.  Proper merchandise planning requires that inventory levels are correct entering your weakest months as well as your strongest.  Being able to satisfy every customer as December draws to a close insures that you will enter January with far more inventory than you need. 

 While making as many sales as possible is important through much of December, it is just as important that your inventory declines as you approach January.  Missing some sales is never enjoyable, but the profits gained from being overstocked will not be of much value against the losses taken from markdowns.

 Open to buy planning is the only thing that will insure that inventory levels are correct to accommodate the anticipated sales for every month.  Buying without OTB is a recipe for financial disaster, but retailers continue to “wing it”.  And when they do, the high experienced from buying all of that wonderful merchandise and having it in the store is greatly counter balanced by the lows brought by markdowns that must be taken to raise cash to pay bills. 

 As soon as an item is marked down, you lose money.  The markdown eliminates your profit and, most likely, any contribution to overhead.  So instead of euphoria after the Christmas rush, retailers will be faced with the depressing reality of dumping excess inventory, to say nothing about the prospect of making buying decisions at the January shows for the next three to six months that will greatly impact your bottom line.

 Make your new years resolution early and get an OTB plan in place as soon as possible.  You’ve done the hard work of building your store into a recognized destination.  Now you need to make sure you can keep your doors open and OTB is the answer.

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