Macy’s recently released its second-quarter earnings report and the results are incredibly positive. Despite turbulent economic conditions and heavy competition from J.C. Penney and Kohl’s, Macy’s has managed to gain market share and improve its overall earnings.
A lot of Macy’s success is once again thanks to the company’s superb inventory management system.
“The company posted better-than-expected earnings and raised its full-year sales and profit forecasts, helped by inventory management that protected its margins,” says the Reuters article “Macy’s Gains Market Share, Sees Better Sales.”
How does inventory management protect a company’s margins? It cuts down on wasted materials, idle equipment and overstocked warehouses. When a company keeps track of all of the products it has on hand and how many it needs to order it avoids having to slash prices to move inventory.
Macy’s Secret to Cutting Down on Discounts
“They’ve done less discounting. Their gross margins are telling you that either there are fewer promotions, or the promotions that they’re running are planned,” said Sterne Agee & Leach analyst Ken Stumphauzer.
Inventory management software is a big part of this strategy. With inventory management software, retailers can keep just enough inventory on their shelves to meet demand without having lots of leftovers that get sold at deep discounts.
It looks like Macy’s competitors need to start using inventory management software to keep up with the clothing retailer. The ABC News article notes, “Last week, Macy’s reported a 7.3-percent rise in July same-store sales, while [J.C.] Penney and Dillards posted unexpected declines as they slashed prices to move inventory.”
Start Using Inventory Management Software
If you would like to take advantage of inventory management software for your business, I recommend checking out Fishbowl. It’s the top-selling inventory management solution for QuickBooks users. It works great for companies in a variety of industries, including retail, wholesale and manufacturing.