How inventory rebalancing accelerates full-price sell-through

Life isn’t a race. But sometimes, it’s better to move fast.

Shahab here, your resident data geek, back with another peek behind the numbers. Today we’ll be looking at the power of store-to-store rebalances — and the impact intelligent demand predictions can have on revenue.

Spoiler: Syrup is helping brands hit full-price sell-through targets nearly two weeks faster than the status quo. Let’s take a look at the data to understand how this is happening.

Today’s chart: Comparing two bundles of fashion apparel with low DC inventory

I examined the performance of two product “bundles,” both of which included around 200 articles. It was truly a mix: an essentially random assortment of womanswear and menswear, tops and bottoms, colors and sizes.

The question I wanted to answer for any given product within each bundle was the same: what happens to in-store items after distribution center stock drops below 20 units?

Bundle 1, which you can see in red in the chart, is the status quo. The brand approached these items using their standard procedures for in-store stock with depleted DC inventory.

Bundle 2, on the other hand, consisted solely of Syrup-recommended products. Seen in blue in the chart, these are items that our AI-powered recommendation engine flagged for rebalancing. In other words: we recommend that you move this many of Shirt X from Store A to Store B, this many of Pants Y from Store C to Store D, etc.

Like all of our recommendations, these were constrained to fit the customer’s specific preferences: in this case, size curve is important, so any inventory movement needed to maintain healthy curves.

Syrup-recommended products sell through 10-12% faster at full price

The exciting story of what happened next is right there in the chart, but let’s take it chapter by chapter.

Chapter 1: It’s day 25, and our journey has just begun. Both bundles of products have hit 20% full-price sell-through (which I am going to write as FPST from here on, mostly to avoid typing so many hyphens). The race, so to speak, is still close: Syrup-recommended products hit this milestone a few days in advance of the status quo bundle.

Chapter 2: Halfway there. By day 50, the gap has widened. Syrup-recommended products surpassed 40% FPST ~7 days ahead of the non-recommended products. What drama will unfold next?

Chapter 3: Syrup recommendations cruise through 60% FPST around 10 days before Bundle 1 limps in. If this is a race, fans are starting to lose interest — the winner is clear, and it’s only a matter of time.

Chapter 4: We can’t get to day 100 because Syrup products have already hit the FPST target. Non-recommended products may or may not eventually hit that goal, but the season has completed and we need to make space. Inventory gets marked down, or worse, dumped in the landfill (although not for much longer if you operate in the EU).

Why faster sell-through rates matter for fashion planners + allocators

Let’s start with the obvious: faster FPST matters because it’s good for business! Earlier access to capital, captured through sales of our in-store products, allows us to move forward with additional activities sooner — maybe even ahead of our competition.

Hidden behind this chart is also a countdown clock: the pre-determined date at which stock needs to be cleared to make room for newer items. Some percentage of the status quo items were marked down, others simply never sold. That represents a substantial amount of lost revenue — definitely not good for business.

Faster sell-through is also good for maintaining sanity. Unsold inventory sitting in storefronts is a frightening Schrödinger’s cat for planners and allocators. Are these items revenue winners or landfill binners? The stakes get especially high when job performance is measured on FPST. Any chance we get to reduce that emotional burden, the better.

How can I start selling through faster? Does the answer have anything to do with AI?

It sure does. The not-so-secret engine piloting Bundle 2’s path to victory is Syrup’s AI-powered forecasting + recommendation platform. We’re seeing in chart form the incredible value that occurs when AI’s computational power augments planners’ and allocators’ decision confidence.

We currently focus on a range of in-season to-dos, including initial buys, allocations, and the replens we covered in detail here. But we’re not stopping there. AI-assisted decision making has the potential to dramatically improve performance across fashion and apparel retail merchandising.

Whatever race you’re in, we want to help you win it. If you’re ready to see how much impact we can have on your day-to-day, there’s a box just below this with everything you need.

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