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Majority of consumer electronics brands battling stock issues as spending slows and returns grow

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Consumer electronics brands are currently burdened with excess stock as the cost-of-living crisis impacts demand. Two thirds (66%) currently have too many products, compared to just 10% that are under-stocked as consumers cut spending in the face of rising bills. 

In addition to the cost of living hitting sales, another factor that may be impacting levels of stock is an increase in products returned. Just over half (51%) of those surveyed expressed that returns were a challenge and of those who were having issues, 70% said this impact was ‘significant’.

To shift excess stock, brands are adopting an offensive strategy, with over half (52%) claiming they would invest more in their marketing despite the economic decline. In contrast, just 16% said they were cutting back, suggesting those that do look to advertise may encounter higher competition for advertising space than they anticipated. 

ChannelAdvisor, a CommerceHub company, highlights this finding, which came from a survey of C-suite employees at large consumer electronics brands with more than 500 employee). The research polled 300 decision makers with a responsibility for sales or marketing and found a high number of their businesses continue to be challenged by inventory levels.

“Through the pandemic, brands were hampered by a lack of stock, and our survey shows that plenty in the consumer electronics sector have overcorrected.” Vladi Shlesman, Managing Director, EMEA at ChannelAdvisor, a CommerceHub company, comments. 

“Excess stock has a significant cost to businesses and as such brands will undoubtedly be looking for ways to shift it. One way retailers can deal with this issue is by expanding their market channels. Contemplating a broader channel mix doesn’t necessarily mean using new, unfamiliar channels, it can mean simply exploring the avenues for global selling within the platforms you already use. This enables your business to reach new territories without the risk of taking on a whole new channel.

“Additionally, many retailers are scaling back on the inventory that they buy, and instead they’re leaning into models where they don’t need to own the inventory, like drop ship and marketplace models. This enables them to adapt more quickly to demand patterns, maintain profitability and get consumers the products they want without incurring the potential costs and headaches of having excess owned inventory.”

One of the causes of over-stocking may come down to a lack of holistic view of products. When asked about how they monitor products sold online, 62% of respondents were manually monitoring some of the data points like stock status, reviews, content and promotions. 

Shlesman adds: “Having the right tech stack of integrated systems will help to deal with the complexities of monitoring stock, reviews, content and promotions which can become exponentially more difficult when adding new channels.”

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