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How Stale Inventory Can Be A Retailer's Downfall

How Stale Inventory Can Be A Retailer's Downfall

It happens to every retailer — there’s inventory you’re just not moving.

It sits gathering dust on your sales floor or better yet in storage – both of which are costing you money. Where did it all go wrong? Finding yourself with stale inventory can be alarming and usually means that something was overlooked along the product’s journey into your retail store. The first thing to consider when your inventory isn’t moving fast enough is what lead you to this point by analyzing inventory seasonality, your product’s life cycle, cultural sensitivity, overstocked items, placement in the store, and how to finally address stale inventory.

Inventory Seasonality

Is the product (s) in question in season? Whether it’s a big holiday like Christmas or something that wouldn’t impact all retailers like Back To School, acknowledging and planning for what seasons your specific retail store should participate in is essential. This will allow you to prepare for what your customers are expecting when shopping. If your boutique specializes in home decor, adding a stationary section during the Back to School season (depending on neighborhood and clientele) could increase the likelihood of sales. On the other hand, having items on the floor at the wrong time will result in the opposite effect. No one is searching for patio furniture during the first snowfall of the year. Map out seasonality and learn from your past sales. Another key tactic in understanding what’s selling is always keeping a close eye out on what direct competitors are stocking down the street.

Product Life Cycle

Understanding the life-cycle of every product that comes into your store is a full-proof way of avoiding unwanted stale inventory. Considering the speed at which technology advances, electronics, for example, have an extremely short life span compared to household furniture like a couch. One group of items is outdated within months – think iPhone’s, big screen TV’s, and laptops – while the other doesn’t change in actual style too often – think your grandmother’s couch she’s had for the last 20 years. This means carefully ordering items predicting the products theoretical expiration date. For any retailer, time is of the essence concerning inventory and keeping your clients satisfied.

Cultural Sensitivity

Being aware of your environment is critical when ordering inventory. If you’re located in a particular neighborhood or ordering products from international sellers, being conscious and socially aware of anything that may not be acceptable culturally in your location is key. A great example is when Apple created the iPhone 4. In the Chinese culture the number 4 has a negative connotation, comparable to the unlucky number 13 in North America. So when the iPhone 4 was brought onto the market many avoided buying the phone all together based on a culturally ingrained notion.

Overstocked Items

It happened, maybe again — you bought way too much. In an effort to save money when ordering, retailers have a tendency to purchase too many of a particular item. Although buying in bulk can reduce the initial cost of items, if you’re not certain these items will 100% sell it’s not worth the amount you’ll lose keeping stale inventory in your store. Whether you’re storing these items in a back room or if they are taking up physical space in the back corner of your store front – this is rental space you are paying for that could be filled with items that will actually sell.

Placement in the Store

The layout of your store can make the difference between sold out items and over-stocked. Ensuring products are properly placed and paired so that customers are able to easily find them without getting frustrated or worse walking out will make a huge impact in your bottom line. Properly placing discounted items in your store is something all retailers are faced with. Understanding the psychology of pricing and placement will bring everyone closer to a more harmonious store environment.  A great tip is keeping your sales rack to the back of your store so that clients walk through fresh stock, encouraging them to purchase more items on their way in and out.

Addressing Stale Inventory

After identifying why and how your inventory is not moving, you’re ready to solve your stale inventory problem with the following:


When discounting, start by white ticketing items. Next will be your red tickets or actual slashes placed through the price – make it clear on the tag that the customer is getting a deal! This means don’t conceal the previous price – the more apparent it is the more of a deal your customers will believe they’re getting. Depending on the store and industry your retail business falls in this practice will vary – but one thing is for sure, customers like to know that they are saving big.


After a certain point you’ll need to bid a final farewell to these items that have been taking up too much space and time in your store. When you reach this tipping point, donation can be an option and this doesn’t have to be a complete loss – let customers know what you’re doing and associate yourself with a relevant community event, a cause that matters to your customers. This will work towards building a great image for your business and can draw in more customers than you think. Donation can also be written off as a tax credit, allowing you to contribute to a worthy cause while not financially losing on the items you previously purchased.


When one item isn’t doing well, why not pair it with another that will boost it’s profitability ? Move standing inventory next to high selling items or better yet package them together i.e. create a bundle. Like pairing brown boots with a scarf that you just can’t seem to get out the store. Another approach is discounting an item with the purchase of another. This strategy is commonly used with electronics, pairing a new phone with a rebate offer for a tablet for example.

Remember that pride shouldn’t play a role in when you decide to finally get rid of stale inventory, instead a clear and effective strategy should. Far too often, retailers insist on keeping favorite pieces around for too long; know when to cut your losses, sell at cost or simply donate.

Stale inventory is dangerous for any store, big and small — it takes up valuable space that can be made of better use selling and moving new inventory. Making well-researched buying decisions, being aware of overstocking traps and following the life cycle of the product is integral to keep your product moving swiftly – so get moving!

Learn more about managing your inventory with Lightspeed’s inventory guide in our resource section here!

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