The $210 Billion Inventory Disconnect Hurting Retail Sustainability Efforts

Currently, there is a $210 billion disconnect between what consumers want to buy and what retailers have in stores. This inventory distortion reflects a severe misalignment within the retail industry, but, even more disturbingly, it also reveals the harrowing impact inventory stocking practices have on our environment. As retailers attempt to align stock with potential demand, many find themselves with substantial inventory pile-ups due to overstocking stores, eventually lending towards unwanted markdowns or wasted inventories. In fact, every year retailers produce over 150 billion garments – of which a whopping 30% are never even sold. Not only does this discrepancy result in huge margin losses for retailers, but it also contributes to the 12.8 million tons of merchandise tossed in landfills each year.

From a sustainability perspective, these numbers show the retail industry’s impact on our environment, as well as the social responsibility retailers must assume to minimize inventory waste. However, inventory waste is not the only culprit as other resources necessary for inventory production also force a hard hit on Mother Nature. For instance, a single t-shirt requires 2,700 liters of water for production – the same amount the average person consumes in 2.5 years. Even more upsetting, a basic pair of jeans needs 7,000 liters of water to produce.

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Topics: retail technology, artificial intelligence, inventory optimization, machine learning, advanced analytics, innovation, sustainability, sustainable fashion, eco-friendly retailing

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