current
Inventory Management
Brands are prioritizing inventory excellence to address overstock, stockouts, and sustainability concerns.
Timeframe
near-term
Impact areas
Detailed Analysis
Inventory management remains a significant challenge for the fashion industry, with both excess stock and stockouts impacting profitability and sustainability. "Inventory remains a challenge for the industry with both excess stock and stocks-outs impacting brands." Margin pressures and new regulations are pushing brands to adopt more sophisticated inventory planning and management techniques. "In 2025, margin pressures and sustainability regulation will place greater emphasis on end-to-end planning excellence." This includes leveraging technology tools, optimizing supply chains, and adopting more agile and responsive approaches to inventory management. "with brands increasingly adopting tech tools and adjusting their operating model to support agile supply chains." The Ecodesign for Sustainable Products Regulation and other sustainability initiatives are further driving this trend. "An estimated 2.5 billion to 5 billion items of excess stock were produced by the fashion industry in 2023."
Context Signals
High levels of excess stock and associated costs
Increasing discounts and markdowns
New sustainability regulations and targets
Edge
AI and machine learning could be used to improve demand forecasting and optimize inventory levels.
Blockchain technology could enhance transparency and traceability in supply chains, reducing inventory discrepancies.
Circular business models and resale platforms could help manage excess inventory and reduce waste.
