How Innovative Brands Are Reducing Inventory Risk

Inventory is a retailer’s most valuable asset and one of the key factors in making or breaking a brand’s success.

When we read headlines about large, iconic retailers closing stores or filing for bankruptcy, one of the driving factors of demise is usually an inability to effectively manage inventory. Take Ralph Lauren, for example. While the company remains a strong brand, it has failed to react quickly enough to the consumer choice economy.

Over the past two years, their sales have plateaued and profits have declined by 50 percent. As a result, the 50-year-old iconic brand decided to close about 10 percent of its stores and eliminate 1,000 jobs. In an interview with incoming Ralph Lauren CEO Stefan Larsson, the Wall Street Journal summarized the brand’s failings, saying, “its costs are bloated and its inventory system inefficient.”

And Ralph Lauren is not alone. There are countless examples of brands that were thriving on the traditional retail model that has begun to decline with the rise of online, mobile, and social commerce.

This new retail environment, however, is ripe for a different kind of brand. Tech-forward small and mid-sized retailers are starting to get it right and pave the way for a new retail reality. Here are two examples of innovative brands that are reducing inventory risk while increasing their opportunity and success.

Taylor Stitch

Taylor Stitch is a San Francisco-based apparel brand that makes sophisticated apparel without the pretense or exorbitant price tag. Using a crowdsourcing model, they’re able to ascertain whether or not a product has the demand required to create it—before expending valuable time and resources.


Of their unique approach, Michael Maher, Taylor Stitch’s co-founder, says, “It’s crazy to invest so much money and effort in something that people might not actually want. I’d much rather be invested in fabric than a bunch of finished size 40 jackets that no one wants to buy.”


Source: Taylor Stitch

Consumers have the opportunity to preorder styles from the brand’s “Workshop,” which means they commit to purchasing the style should it reach 100 percent funding. That way, Taylor Stitch knows definitively how many size 40 jackets to create. This method builds anticipation while mitigating the risk of products collecting dust in the warehouse.

Freda Salvador

Just like food trucks allow restaurateurs to test new ideas without investing in a brick-and-mortar, decor, and a kitchen fully stocked with new appliances, mobile commerce trailers allow brands to experiment with different products in numerous locations.


Source: Freda Salvador

A mobile trailer like “Diego,” Freda Salvador’s store on wheels, not only allows retailers to clear out old inventory by taking it on the road, but it reduces risk by letting the brand test out demand in new markets. By taking the truck to events, the Freda Salvador team has a chance to push old inventory out, test new inventory, and excite customers with the unexpected.

Centralize Your Inventory

Whichever way you choose to get creative with your inventory, the greatest way to mitigate risk is by managing it properly—with visibility, efficiency, and control. Today’s retail environment demands that you’re everywhere your customer is, which is no easy feat, especially when it comes to inventory. Stitch Labs enables you to centralize your inventory from all your sales channels so you know what you have and where you have it at all times.

Make sure you’re set up with the tools and processes you need to succeed in today’s retail environment while remaining agile for whatever changes tomorrow may bring. Download our guide, Preparing for the Future of Retail.

More Resources

Learn how today's fastest-growing brands manage their inventory.