How to Crush Holiday Inventory Management  

Do you know where your inventory is? Peak retail shopping means heightened demand for popular products. For retailers, meeting customer expectations for a seamless shopping journey often rests on two variables—reliability and transparency from their fulfillment partners. These characters intertwine across supply chain tiers, enabling a positive customer experience. Without them, inventory management during the holiday season can snowball out of control.

Real-Time Visibility Is a Retailer’s North Star  

There’s a saying: You know what you know, and you don’t know what you don’t know. Sure, forecasting demand assists inventory management. However, when there are unexpected disruptions, fulfillment success and customer satisfaction aren’t guaranteed but lost.  

The National Retail Federation forecast a brisk 2024 holiday spending season, projecting up to 3.5 percent growth year-over-year, presenting a golden opportunity for omnichannel merchants. But if you don’t know how, what, or where your inventory lives, you can’t deliver on your customer promises. 

“Solid inventory management supports healthy dock-to-stock and fulfillment times, and increases order accuracy,” says Peter Davis, VP of Fulfillment at WSI. With the added stressors the holiday peak season brings, fulfillment performance becomes a strategy requiring ongoing attention. With the right tools and technologies, the operational efficiency retailers wish for can be a reality throughout the year. 

Track More   

Destinations have start and end points, seldom falling in a straight line — the epitome of logistics. Resilience can be hard to come by when the unexpected happens: weather delays, transport hiccups, staffing shortages, and more incite downtime derailing production and fulfillment. 

Moreover, no one wants to own what they can’t control. For retailers, it’s a requirement during the holiday peak season.  

Fortunately, monitoring and managing inventory is easier and remotely accessible through digital tracking technologies. Having the ability to gauge inventory fluctuations, supply interruptions, and damaged or missing goods enables cost savings and allows for quick pivots when needed. 

Tracking provides real-time visibility and control amid the organized chaos, lighting the way to on-time fulfillment.  

Knowing Is Everything  

Inventory management is a hyper-dynamic process, especially during peak season, requiring agile teams and technology-based solutions. For small-to-midsize retailers, having the right distribution, logistics, and fulfillment partners can make or break their year-end and most valued revenue opportunity. 

To help retailers maximize fulfillment efficiency and mitigate risk, our friends over at ShippingTree created an e-commerce brand’s Guide to Inventory Management Software, detailing key requirements to hone inventory management. 

When assessing inventory in rapid-change environments, whether raw materials, components, packaged materials, or finished goods, it’s important to measure multiple stock levels and configure recommended next steps.  

• Know what’s on hand. Inventory readily available in the warehouse 
• Know what’s on order. Inventory in the warehouse already allocated to orders  
• Know what’s defective. Inventory identified as unfit for fulfillment 
• Know what’s in production. Inventory dedicated to Value Added Services (VAS), such as a kitting, packaging, quality control, and returns management 
• Know what’s inbound. Inventory in transit or amid processing with an advanced shipping notice (ASN). To get in front of inventory management, especially during the holiday season, knowing what to expect is half the battle. 

The Cost of Stockouts and Dead Stock  

According to study findings from global research and advisory firm IHL Services, retailers experienced an estimated loss of $1.77 trillion in 2023 sales, due to inventory distortion from stockouts and overstocks. How did we get here? 

Consumers and subsequent demand cycles drive purchase and return behaviors, thanks to retailers’ online presence increasing product visibility, competition, and expectations. Although holiday purchases happen in virtual and brick-and-mortar environments, both engage 3PL fulfillment.  

During the holiday season, your 3PL is the sleigh and the reindeer. 

If your fulfillment partner doesn’t have solid inventory management practices in place, retailers could see the holiday season turn sour, negatively affecting strategic relationships, customer experiences, and brand reputation.    

Inventory Management Isn’t One Size Fits All  

Finding the right-fit inventory management platform is like searching for a pair of shoes; you have to try them on and break them in before feeling comfortable. What works for one or some won’t work for all but there are recommended must-haves that make it worthwhile. 

Significant demand fluctuations, synonymous with the holidays, require seasonal inventory management, a strategy designed to curate and maintain inventory to meet the heightened needs of retailers and their customers.  

5 pathways to seasonal inventory management: 

First-in, first-out (FIFO) 

Inventory placement in warehouses and on shelves makes a difference in inventory valuation. The stocking method of first in, first out (FIFO) is common and crucial this time of year, ensuring older inventory is used first to make room for new stock. 

Automating stock counts 

Other ways to optimize efficiency is through technology. By automating stock counts, for example, the process rapid-fires inventory management, increasing accuracy and throughput, while reducing downtime and costs. 

RFID tags 

Adding barcodes with Radio Frequency Identification (RFID) tags to shipping packages is a preferred tracking mechanism. The technology electronically stores information which can be read remotely and transmitted to designated receivers at varied locations, enhancing accountability, security, and reducing the risk for theft.  

Lot control 

Product and materials with specific expiration dates, batch numbers, or production dates, benefit from lot control for quick tracking, essential to identifying defects tied to a specific batch(s).

ERP software 

Enterprise Resource Planning (ERP) software brings end-to-end-supply chains into a single source of truth. From procurement to planning, distribution and delivery, every company within the value chain gains visibility in real-time, enabling responsiveness when disruptions occur. And by analyzing historical data, reviewing current market trends and economic factors, demand planning is more predictive, making inventory management more productive and on point. 

When manufacturers, suppliers, distributors, and warehouses talk to one another, the information shared serves as a blueprint for supply chain efficiency. By creating and maintaining an open dialogue with strategic partners, collaboration happens and helps articulate supply and demand fluctuations, inventory accuracy, and formulates solutions.  

The Gift of Inventory Management  

Perhaps you’ve dedicated a portion of your 2025 spend on AI integration or automation to help alleviate the labor and throughput challenges of the holiday season and beyond. But what can be done to optimize business operations to get you through the here and now?  

Breathe. You’ll get through it. Then monitor and report inventory management successes and missteps of the 2024 holiday season. Use the data to modify existing processes, labor allocation, and revisit preparedness for next year.  

Effective inventory management isn’t packaged in a box; it’s unique to your business. Make sure to work with a 3PL provider that supports your business success by offering inventory management solutions that bring simplicity to the complexities of fulfillment’s peak season. 

Discover how WSI streamlines inventory management with real-time visibility and control through user-friendly systems.