SUPPLY CHAIN
“ LEGACY SOFTWARE IN OMNICHANNEL FULFILMENT IS A MAJOR ISSUE .”
WILL LOVATT VP & GENERAL MANAGER , DEPOSCO EUROPE
The company has admitted that , despite strong demand , it will follow a policy of “ aggressive markdowns ” to clear inventories , though this will likely impact margins this fiscal year .
Nike CFO Matt Friend said on the company ’ s quarterly call that inventory was up 44 % company-wide , driven largely by a 65 % hike in North America , its largest market . Friend said Nike plans to “ tighten buys in the second half of the financial year and liquidate excess inventory more aggressively beginning in the current quarter ”, in the hope it better balances inventory in 2023 .
Many clothes retailers are experiencing something similar , watching inventory pile up as inflation-hit consumers rein-in their spending .
“ I hesitate to call it a bloodbath , but it ’ s going to be ugly in terms of the amount of discounting and markdowns ,” Urban Outfitters CEO Richard Hayne said during a Q3 earnings .
In a post on LinkedIn , Brandon Rael – Business Transformation Leader with Capgemini Invent – said of the Nike situation : “ It ’ s continuing its aggressive push with its direct-to-consumer ( DTC ) strategies , and , at the same time , is in an overinventoried situation where it has to review its wholesale partnership model .
“ Nike is re-evaluating its wholesale partnership model while growing its DTC retail space . Its partnerships with Foot Locker , JD Sports , and others offer Nike an opportunity to manage its inventory challenges while extending its reach to customers , via well-established retail and wholesale models .
“ Foot Locker and others have done an outstanding job of adding value to the Nike brand by providing a shop-within-a-shop customer experience .”
This ‘ tale of two Nikes ’ shows just how perilously difficult it is for businesses to manage inventory in a world in which market chaos is … groan … the ‘ new normal ’.
While the digitalisation of inventory management can be seen as a salve to such problems , it is no panacea . Here , Supply
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