What smart inventory management means in 2023 — so far

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Retail inventories have receded from their 2022 peaks, but managing them is still a tricky set of tasks this year as demand remains volatile. 

Many of the largest retailers are erring on the side of slim when it comes to their stock levels. Target and Macy’s are sticking with conservative positions. Kohl’s has shed inventory in a hurry last year after its margins were crushed under a pile of excess inventory in 2022. 

At the same time, retailers are keeping their purchasing budgets open to chase hot-selling goods and new trends as they happen. 

Many are also investing in their demand planning capabilities to keep their supply tailored to ever-better guesses on what demand will be. 

All of this is an effort to sell fewer things at better prices and avoid last year’s torrent of margin-dampening discounts. As Telsey Advisory Group analyst Joe Feldman put it in an interview earlier this year, “A little scarcity is not a bad thing.” 

That represents a stark shift in mentality from just two years ago. But adapting quickly has become nearly daily task for supply chain and planning teams since the pandemic began. 

Here is a look at how market players are approaching their inventories so far this year. 

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