Non-Moving Inventory: Strategies to Clear Stock Fast

Key Takeaways

• Non-moving inventory ties up cash, storage, and margin, but the right systems clear it without deep discounting.
• Combine advanced merchandising with inventory management so slow movers are surfaced (or demoted) automatically.
• Split non-moving stock into two groups: potential products that lack exposure, and true slow movers that need a price change. Each group gets its own fix.
• Set up a system to flag non-moving stock early, before it becomes dead stock.
• Use targeted marketing (bundles, promos) to move slow stock profitably instead of blanket markdowns.

Non-moving inventory is something most online retailers are all too familiar with. But does it have to be? 

As we know, non-moving or slow-moving inventory are products with little or no sell-through over a set window, often 60 to 90 days depending on your category. It's how a retailer ends up relying on just 20% of its products for 80% of its sales.

This is often referred to as the ecommerce Pareto principle cycle, and it’s vital for brand managers to prevent this. 

Why? 

Short answer: profits! 

Slow movers take up warehouse space and add storage costs. They also waste overall revenue and product earning potential. Non-moving inventory costs include:

• Opportunity losses associated with not having the space or budget capacity to bring in more new, faster-moving inventory  
• Freight and manufacturing costs 
• Carrying costs 
• Interest on inventory credit lines and loans
• Per unit product price 
• Profit lost to deep clearance discounts

Potential products vs. true slow movers

Before you discount anything, sort your non-moving stock into two groups. Kimonix CEO Daniel Gurevitch puts it simply: "Not everything is a slow mover."

Potential products are common in large catalogs. They fall through the cracks and get buried. They get so little exposure that few shoppers ever see them, but when shoppers do, they convert at a decent rate. They may not be best sellers, but they are good products that can be saved.

True slow movers don't sell, whatever you try. These need a promotion or a discount to move.

Potential products need visibility first:

• Collections: mix them in near the top of your collections, between best sellers and new arrivals, where shoppers actually look.
• Product recommendations: add them to the recommendation widgets on your best-seller pages, like "You may also like" or "Complete the look."
• Search: boost them in search results, so they show up when shoppers search for that type of product.

If they start selling, keep going. If they still don't sell, they have become true slow movers, and it's time to plan a discount.

But here’s the thing: with proper management, inventory optimization, and merchandising, inventory-based businesses can not only prevent this but stop sluggish products in their tracks before they become dead weight. 

How? 

By constantly managing and balancing your retail and marketing KPIs and following these four key strategies: 

1. Combining Advanced Merchandising with Inventory Optimization
2. Setting Up Systems to Identify Non-Moving Inventory in Real-Time
3. Using the Right Tools to Manage Slow or Non-Moving Inventory 
4. Optimizing Your Marketing Strategies

Let’s look at each in more detail. 

Strategy #1: Combine Advanced Merchandising with Inventory Management 

The first step in managing non-moving inventory is for ecommerce teams to prevent slow-moving products altogether. 

There are several reasons why slow-moving inventory occurs, including: 

• Change or ending of seasons 
• Start of the new year 
• Introduction of new products 
• New product trends 
• Improper inventory management 
• Marketing strategy shortfalls 

All of these can be greatly reduced with inventory optimization, which is the combination of advanced merchandising strategies and inventory management based on key marketing and retail KPIs. Good inventory optimization includes the following: 

1. Inventory level optimization strategies 
2. Inventory storage optimization strategies
3. Demand forecasting optimization strategies 
4. Advanced merchandising and optimization strategies 

They all work together to help your teams preempt slow-moving inventory by ensuring their strategies consider overall marketing goals and key brand retail KPIs. Ultimately, they allow managers to not only predict future buying based on trends and sales, but also effectively move products before having to cut potential profits with big discount sales. 

Bonus Content: 6 Ecommerce Merchandising Tasks Successful Merchandising Managers Automate

The most effective way to do this is with ecommerce AI tools and technology. Kimonix, for example, is an advanced merchandising tool that considers both retail and marketing KPIs so established online retailers can: 

• Fulfill customer preferences intuitively
• Boost conversion rates and product sales 
• Optimize inventory and maximize margins 

In short: AI is vital in ensuring brands can bridge the gap between product development, sales, purchasing, inventory control teams, and brand management and being able to optimize inventory and lessen or prevent non-moving inventory. 

Pro Tip: Kimonix is the agentic search and merchandising platform for Shopify brands. It uses your sales, inventory and margin data to power search, sort collections and personalize recommendations, so slow movers get seen before they need a markdown.

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Strategy #2: Setting Up Systems to Identify Non-Moving Inventory in Real-Time 

The next strategy in limiting profit loss due to non-moving inventory is being able to identify any slow-moving products as early as possible. This means setting up systems that enable teams to immediately identify any product movement blockages or hiccups so that they can intervene while preventing significant profit loss. 

Keeping slow-moving products for too long increases the chance they will become unsuitable for sale (damage) or incur huge profit losses due to desperate promotions. This makes identification vital. 

To do this, ecommerce inventory management teams should be tracking results and retail KPIs in real-time and then adjusting merchandising and marketing strategies accordingly. These retail metrics include: 

• Current variants stock ratio for each product 
• Total amount of a product purchased in a given time compared to forecasted and historical demand 
• Inventory value for each product 
• Average time product is in stock before shipment 
• Total sales (quantity or $) for each product 
• Product demand and price competitiveness in the market
• Number of days to finish inventory 
• ABC, FSN, and SDE analysis data 

These metrics will help online retailers monitor inventory turnover and quickly spot slow-moving products. 

Using the right systems and inventory tracking tools ensures brands have instant access to accurate inventory and sales data and allows managers to inventory slow movers and act before they become non-moving stock. 

Strategy #3: Using the Right Tools to Manage Slow or Non-Moving Inventory  

Now that your tracking systems are in place to identify slow-moving inventory, what next? 

Using the right tools to quickly and efficiently eliminate dead stock without sacrificing on profit. There are three main strategies that will help brands do just that: 

1. Running the right promotions at the right time, maximizing profitable margins, and mitigating loss
2. Using advanced product sorting to ensure your customers are seeing the right products in your store collections at the right time to meet both retail KPIs and conversion targets 
3. Using product recommendations engines to increase inventory exposure and therefore sales 

This strategy has proved highly successful. An example of this in action is retailer Swarovski (IL). They were able to increase their profits by 8% in just four weeks after reducing non-moving inventory by a whopping 29%.  

You can read the study in more detail here: Merchandising Case Study. 

Pro Tip: You can do this by hand, but it's close to impossible for large catalogs. Kimonix automates it for Shopify brands. On Shopify? Download the app here.

When to start discounting slow movers

Many brands hold slow movers until Black Friday, then clear them at 50%, 60% or 70% off, often for little or no margin. A better approach is to start as soon as you spot them. If you identify a slow mover in April, May or June, start at 10% off. If it sells, keep it there. If not, raise it to 15%, and keep stepping up. You may not clear every unit, but you keep more of the margin, and shoppers don't learn to wait for big sale events to buy.

What to sort sale collections by, besides stock level

Stock level alone is a risky way to decide what leads your BFCM collection. Here's an illustration with five products:

• By stock alone, the black crew tee leads. But it has only 35 days of stock left and will sell out without any help.
• Add days of stock left, and the olive wrap top looks best: plenty of units and 260 days to clear them.
• Add margin after discount, and the olive wrap top drops out. It earns $8 a unit.
• Add core sizes in stock, and the tailored pants win: 150 days of stock, $47 margin and every core size available.

Find the three to five measures that matter most for your brand, such as margin, days of stock left, core size availability and product age, and sort by them together.

How to sell leftover extreme sizes

Products with only extreme sizes left are hard to sell and shouldn't take prime spots in your main collections. Send them to the shoppers who can buy them:

• Build dedicated collections or landing pages that only show products with those sizes in stock, and point your marketing there.
• Send personalized emails to customers who have bought those sizes before.
• Use search. Kimonix Agentic Search starts as fast, classic AI search and turns into a conversation with a shopping agent when shoppers ask for help. Tell the agent to recommend these products whenever someone asks for those sizes.

Strategy #4: Optimizing Your Marketing Strategies

Finally, ecommerce retailers should be optimizing their overall marketing strategies to help quicken product movement. This means coordinating your inventory optimization, advanced merchandising, and promotions to ensure you: 

1. Expose the right products to the right customer at the right time at the right price 
2. Finetune promotional strategies to mitigate profit loss while answering retail KPIs 

Ultimately, marketing teams will want to ensure they use advanced product collections, well beyond personalization, to ensure they are customized based on multiple parameters such as sales, inventory, margins, customer preferences, etc. 

Bonus Content: Why Product Sorting Personalization Is No Longer Enough

Additionally, they should be tracking real-time metrics such as engagement stats and inventory analysis to create smart product promotions that efficiently move products without sacrificing profit gains. 

Both these strategies can be used for advanced product curation and creating marketing landing pages and email marketing campaigns that are personalized to each customer while making sure inventory goals are met at the same time. 

Bonus Tip: Some further ideas on maximizing advanced merchandising and promotion strategies to move slow movers while also increasing AOV:

• Bundling slow-moving products with fast movers or best sellers, or bundling complementary products together for a discount
• Varying promotion types across the site including clearance collections, flash sales, and seasonal promotions 
• Using advanced AI tools to optimize marketing and merchandising. Here are the top artificial intelligence ecommerce tools to get you started.

Bottom Line: Prevent, Probe, and Promote 

If you want to say goodbye to non-moving inventory and boost your online brand’s profitability, you’re going to need a combination of all of these strategies. This means having strategies in place to: 

1. Prevent non-moving stock 
2. Probing metrics to find slow movers early 
3. Promote the right products (based on marketing and retail KPIs) on and off-site 

In short: Inventory management and optimization are vital in moving lower-demand inventory without sacrificing profitability. They should be working with advanced merchandising and marketing strategies to ensure brands are boosting the right products at the right time and limit deadstock.

Turn product discovery into sales. Kimonix is the agentic search and merchandising platform for Shopify brands. It brings together your sales, inventory and customer data to power search, sort collections and personalize recommendations, so the right products get seen and slow stock keeps moving. Built for Shopify, from a Shopify Certified Technology Partner.