Well, here’s one of retail’s worst kept secrets: fashion brands are wasting vast amounts of their own unsold stock under the banner of protecting the brand, and maintaining exclusivity and luxury positioning.

A culture of excess, but not of profit

The cause can be summed up in one word: excess.

Huge overstocking practices result in the industry sitting on 600,000 tons of unsold stock every year. It’s become culturally accepted. It’s just the way it works.

But even without the glaringly obvious, and deeply uncomfortable, environmental impact of this - it’s not good for profits either. Vague, unclear and inflexible inventory planning and management leads to ever-decreasing returns from increasingly bad decisions. 

We can no longer continue to cross those bridges when we come to them - instead we need to be focused. Focused on a solution that offers customers the right product, in the right place, at the right time.

If overstocking is the problem, what’s the solution?

A good, albeit simplified, approach is to order less, distribute less (and hopefully) sell more. 

The cynics will jump straight to the perceived trade-off. Risking potential sales with overly conservative sales forecasts and overly positive projections sounds like exactly what you’re trying to avoid, right? 

Well, the goal here isn’t to just order and distribute less, it’s to order and distribute better. It takes the hope of increased sales out of the equation and replaces it with an expectation.

Here’s what it looks like in practice.

Improved sell-through

It’s not uncommon to see some retailers with only a 20% sell through rate.

Think about that - ordering 100 pieces and selling just 20. So, at the end of the season there’s 80 pieces surplus. And the same next season, every season. And the same next year, every year. 

But how do you improve sell-through? 

Well, it’s not rocket science… it’s way smarter than that. 

autone, our inventory management tool, crunches piles of historical data and pairs that with an AI similarity algorithm to deliver assortment and stock depth buying recommendations - predicting demand and maximizing sell through.

Does a 42% increase in sell-through rate sound possible to you? Because I know it’s achievable - I’ve seen it myself, and 42% less stock wasted is good news all round. 

Replenishment and rebalancing

Too often innovative replenishment and rebalancing processes are discounted (those cynics again) as unachievable or too costly or resource intensive. 

But, they give retailers much smarter and more flexible options for avoiding stockouts and maximizing sales. 

Getting stock to where it sells is as simple a solution to overstocking as you’ll find. 

And, if that means also avoiding some of the more environmentally-impactful distribution processes, then that’s a bonus too. 

If not for compliance, do it for the profit

Making the fashion industry sustainable isn’t something that should be done, it’s something that will have to be done.

Whether it’s legislation, customer preference or the only route to survival, sustainability is the destination. 

The choice that retailers have today though, is in what state do they want to arrive in this sustainable fashion future? Do they want to be dragged, kicking and screaming, into compliance or soar profitably into an environmentally and financially sustainable position in the market?

It’s time we all got over overstocking.

This is the fourth post in our latest Profit or Perish series where we uncover the key retail trends that’ll dominate 2025 according to the hottest names in retail. Watch this space for more predictions coming soon.