B-Stock COO Marcus Shen recently sat down with Retail TouchPoints to discuss the current retail landscape and the undeniable excess inventory problem that apparel retailers are facing. This inventory problem is something that Marcus is no stranger to: during his interview, he shared a personal story in which he took a drive to Top Dog, a Berkeley establishment serving gourmet sausages to Cal students and Bay Area locals for more than 50 years—and a place he frequented while in college. Driven by a fit of nostalgia and an effort to support the local business during the pandemic, Marcus stocked up on hot dogs. Hundreds of them. And so, it wasn’t long before he realized—much like many retailers now—that he had an inventory problem.
In a normal environment, the excitement of too many hot dogs could easily be mitigated with a large gathering of friends for a barbeque, but much like the rest of the world, social distancing put a damper on that possibility. In similar fashion, apparel retailers are facing the same challenge: How can they unload millions of dollars of pre-ordered inventory, that’s now sitting in warehouses and stores all around the globe?
We sat down with Marcus to discuss just that. Read on to get his thoughts in our latest Thought Leadership Thursday (#TLT) article.
Q: In your article with Retail TouchPoints, you mention that it was the nostalgia of college that led you to buy too many hot dogs. Do you think consumers will approach shopping in the same way once the pandemic has passed?
I do believe that there’s pent up demand. People miss shopping; they miss the social aspect of it, they miss the discovery part of shopping. There’s a certain instant gratification that comes with in-person shopping, and I think that people dearly miss it. I’ve actually heard people talk about it that way: they are really glad to be out and about—even if it’s on a limited basis—at least looking at stores in person. So, I do believe once that once the current situation dissipates from a pandemic perspective, there will be a big surge in in-person activities.
Q: I think we can all agree that prior to the pandemic, there was a surge in eCommerce, but COVID has kicked it into high gear. Do you think that the eCommerce purchasing trends that we’re seeing now will change shopping forever, or do you think it’s a temporary surge and things will level out?
I think that when it comes to end consumers like you and me, shopping and buying clothing has probably somewhat changed for the long run, and the adoption of eCommerce has certainly accelerated through this. Do I think that it will stay at this elevated state for the long run? I don’t know. To refer back to the first answer, I do believe that there is a lot of value in in-person shopping because again, there’s the social aspect of it, and there’s something to be appreciated in the tactile part of touching and feeling apparel and seeing things. So, while there are a lot of categories where eCommerce naturally makes more sense as a primary channel, I think there will always be a place for the in-person shopping experience.
We talked about end-consumer shopping from an eCommerce perspective, and I definitely think that the other big change that we’re seeing and will continue to see is a move to online for B2B. People used to call suppliers for their pallets of inventory and product, for instance, and I think the way in which transactions like that are handled is definitely changing as well, because as a result of this pandemic, people haven’t been able to travel and meet with suppliers or vendors face to face or transact the way they used to. So, from a B2B perspective I also think online is becoming accelerated.
Q: What do you think will happen as a result of this eCommerce acceleration? What do you think retailers will do to adapt to the future consumer trends?
I think this is a twofold answer as well. There are the retailers who primarily sell online that will continue to do what they’re doing: making it easy for people to shop and experiment and try and return things and offerings along those lines via eCommerce. I also think that to expand on that dynamic, they’re going to invest in the buying experience: better imagery, better video, an overall better sense of replicating the in-person experience from an online vantage point.
On the other side, I think we’ll see traditional retail step up their in-person experience. Simply having a bunch of racks up might not be good enough anymore, so they may have to take it to a different level and make it more engaging or experiential. Consumers may expect a far different buying experience—one that’s far better than the online alternative. In-person has a lot to offer in terms of consultative services, for instance. Nordstrom is a good example of this: services like shopping assistance or style guides are very valuable, particularly for people making a significant investment in their wardrobe. And these services are valuable in both channels: online and brick & mortar.
Q: Liquidity can be challenging for most brands, and when you add a global-scale pandemic, it can become ever more so. How can sellers help mitigate that challenge and ensure they’re partnering with a reputable liquidation company?
I think that if you’re a seller, it’s vital that you, one, move the inventory in the most efficient and effective way, and two, make sure that it goes to the right channel, particularly if you’re a brand or manufacturer. To do that effectively, you need two things: first, scale: you need to be able to manage a wide array of buyers. Whether it’s a certain geography or certain category or certain price point, having as many options as possible is critical for selling efficiently and effectively. Secondly, brand control: your brand is important, and it can’t end up just anywhere. So, as a seller, you need to have the confidence that you’re working with somebody who’s going to treat and protect your brand the right way.
Q: On the other hand, what can retailers do to make sure buyers get a return on their investment? Is there anything that can be improved upon?
I think buyers should be thinking about a couple of key things. One is, they want quality goods, from companies they can trust, whether those sellers are brands or manufacturers. Their customers—you and me—who go and buy products from their stores, whether online or brick & mortar, want to make sure that they’re getting a good product. So, buyers want to make sure that they’re sourcing directly from the manufacturers or from trusted places, which will ensure that the product is of good quality. Two, buyers need to make sure that they’ll have access to inventory on a consistent basis. If I’m a buyer and I’m running a business, I’m building a clientele that expects that inventory. If tomorrow there’s no inventory and/or I don’t have access to buy that inventory from my source, that’s lost opportunity. So, they need to be able to have a source of inventory that’s consistent and reliable to ensure success for the long term.
Q: So, leading back to your article with Retail TouchPoints, tell us what happened after the nostalgia wore off. Were you able to finish all those hot dogs after all?
My family and I ate hot dogs for a long time… everybody did, sometimes multiple times a day! We did our best to work through the inventory over time, but as brands and manufacturers know, there’s an expiration date on product. So, after a certain point, you cannot go back anymore. Let’s just say that at this point, I couldn’t even sell hot dogs to my own kids.
B-Stock operates the world’s largest network of B2B marketplaces for returned and excess apparel, shoes, and accessories. Our platform connects major retailers and brands directly to vetted secondary market apparel buyers around the globe. Our account management team is made up of apparel and auction industry experts who provide daily support, guidance, and auction strategy. To learn how we can help you maximize results for your excess apparel, visit our apparel page or contact us for a demo.Request Demo