Author: Nick Scheffers
Date of publishing: 1st Februari 2026
Sometimes peak season selling goes exceptionally well. And sometimes, it’s.... a little disappointing.
“Well,” you might say, “That’s retail – right?” Is it? Should it be that way?
It’s not enough to just dust off our hands at the end of the peak season of holiday shopping, and say “Thank goodness that’s over,” and then get back to business as usual.
This only leads to a cycle of repeated mistakes and preventable revenue loss.
That’s why I think it’s very important to take a little time in January to look back on how things went and – crucially – why.
You probably feel like a well-earned rest right now. But right after the holidays is the best time to zero-in on which areas of inventory management are causing the most stress and where you missed opportunities to sell more.
Why retailers need to tune-up their inventory right now
It can often feel like you have only two options:
- Overstock (and discounting), or
- Understock (and missed sales).
Neither of these options is good, of course, but, without a time machine or crystal ball they feel inevitable.
So, most retailers err on the side of caution, by balancing marginal overstock against a guaranteed stock risk.
Then, during this critical period, retailers have considerable work to do:
- Allocation must ensure sufficient stock of bestsellers in all sales locations
- Constant vigilance and manual actions are needed to maintain a constant supply
- Executing reallocation and transfers to avoid stockouts
- Gaps in product variations need to be avoided to minimize missed sales
- Planning and vigilance must include various scenarios for operational capacity
- Products generating the most profit must be prioritized due to capacity constraints
To minimize extra work during peak season, I recommend that retailers take the following 5 actions for inventory management, as soon as possible.
5 tips for improving peak season inventory management in 2026
- Review
Carefully analyze what could have been better (on an SKU level) and ask: How could you improve results?
You might be selling different items next year (especially for fashion brands), but product attributes tend to be stable indicators.
Provided you have insights into this data, you can track demand across attributes and apply these to all future SKUs with high accuracy.
Embedding a review process in your yearly planning is a good first step.
2. Prepare earlier
Early is good. Earlier is better. You need a clear vision of the next peak season from the moment the last one ends.
It is tempting to wait until you have a better indication of economic factors etc., before planning, but I think there’s an advantage to making an early start.
You can adjust plans and strategies later, if circumstances change, but only if you already have the plan to begin with.
3. Start your redistribution early
Fill those gaps in your assortment early, potentially redistributing stock via reallocation or transfers.
Each store and channel should be able to offer your full range, including all sizes, colors, and other product variations. This helps to balance each store, so you’re already on an ‘even keel’ before demand starts to grow.
4. Focus on profit
A broad assortment spreads your bets. But if it were a horse race, then you’re mostly betting on the losers with this strategy.
Breadth is important, but you still need to retain a focus on where your best margins come from, and how these are tied to complementary purchases and cross-selling.
Remember it is a peak season, and your capacity is tight.
It makes no sense to prioritize items that require more handling or storage, unless the margins make up for it.
5. Use your data
You need access to good data and insights. The data must show the depth and attributes you need to make a proper analysis, as I mentioned above.
Your tooling should allow you to do two things:
- Identify clear trends
- Take appropriate and timely action
This way you can see which items are leaking revenue, and which need to be prioritized.
Then, with a few clicks, you should be able to rebalance your stock by triggering replenishment, transfer, or another action.
The positive results from tuning-up inventory management
Whenever I’ve worked with retailers to improve their inventory management, we see the same positive effects on their business model.
Sales boost
The most important result you can expect is improved sales revenue, because you don’t suffer stockouts that leave consumers disappointed (and empty-handed).
How much? Using the Thunderstock platform, retailers typically reduce missed sales by 25% in the first year. That’s equivalent to about 1% to 3% of additional revenue each year until missed sales reach an irreducible minimum.
Fewer discounts (better margins)
With highly accurate stock, you have just the right amount of stock to fulfil demand.
This means your inventory turns rate will shoot up, and you practically eliminate overstock. Without a backlog of unsold stock, you don’t need to make discounts to claw back capital.
How much? Retailers using Thunderstock can achieve 5% improvement on margins.
More free cash flow
With less overstock left at the end of the season, you have the maximum cash flow available to invest in new bestseller items.
How much? With ‘just right’ inventory that exactly matches demand, you can free up between 20% and 30% of the capital currently invested in stock.
Isn’t it time to make a change for the better?
By bringing your inventory management into line, you can avoid much of the stress and work that leaves retailers exhausted by the end of the holiday period.
Sure, constant vigilance and manual adjustments are one approach. But wouldn’t it be better if you could automate it?
Investing in the right tooling makes a big difference, and the sooner you start, the sooner you will see the positive effects it can bring to your retail business.
Once assortment planners and merchandisers experience how much easier it is to get the right insights and take timely, precise actions, they’ll see that their old manual methods are no longer sustainable.
In this newsletter, I’ll keep sharing practical insights on inventory, forecasting and demand patterns that help retailers make better decisions
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All the best,
Nick.
Quote: Start time travelling now
