Managing inventory across multiple locations is challenging for fashion brands, causing inefficiencies and higher costs. Stock splitting, or dividing inventory into smaller quantities, can lead to both overstocking and stockouts. A single stock pool solution helps unify your European online stock to address these issues. By consolidating inventory into a single pool, you can optimise stock levels, streamline returns and improve profitability, enhancing operational efficiency.
Optimising inventory management in European fashion e-commerce
Stock splitting is a major challenge for fashion brands selling across Europe. Recent changes in the fashion e-commerce landscape have made this problem more pronounced.
The shift from a wholesale to a direct-to-consumer (DTC) business model is a key factor. Traditionally, many online marketplaces operated on a wholesale model, buying stock from brands and retailers. However, the shift to DTC allows partners to sell their own stock on marketplaces at a commission while retaining ownership. This reduces risk for marketplaces and offers partners control over pricing and brand experience.
Most Europeans prefer to start their fashion searches on multi-brand platforms like Zalando, About You, ASOS, and Amazon. And, to ensure they can meet their customers where they’re at, brands typically sell across multiple channels. Since their own logistics networks often aren’t large enough to handle high volumes, or aren't strategically located close to end consumers in specific markets, many brands outsource operations to third-party logistics providers (3PLs) or rely on marketplace logistics services. This approach then leads to stock splitting, where inventory is allocated across different stock pools per channel and market. Consequently, brands may end up with too much inventory in one channel and too little in another, leading to inefficiencies like overstock in some locations and stockouts in others, ultimately resulting in lost sales and higher costs.
For more insights and detailed strategies, watch our episode of "Business Casual" with Jan Bartels, SVP at ZEOS.
The challenge of stock splitting
Split stock issues include increased storage and transportation costs, tracking difficulties, stock balancing challenges and system integration problems. Environmental impacts also arise due to frequent transportation, leading to higher carbon emissions. In a nutshell, stock splitting complicates inventory management and affects a brand's ability to meet customer demand efficiently. To tackle these challenges, ZEOS offers a comprehensive solution: One Stock Pool.
ZEOS solution for stock splitting: One Stock Pool
We address the challenge of stock splitting with our innovative One Stock Pool solution. This approach consolidates inventory into a single pool, streamlining logistics and improving efficiency for fashion brands across Europe.
The concept of our One Stock Pool solution is simple, yet powerful. Brands ship their goods to ZEOS' network of fulfilment centres, ensuring they are always close to their end customers:
The inventory is managed as a unified stock pool.
You can serve major European marketplaces, as well as your brand’s webshop, from one stock pool that is physically and digitally connected.
Stock distribution across our 12 fulfilment centres and 20 return centres is carefully optimised to reduce the risk of overstocking or stockouts while ensuring the most efficient management of returns. Our advanced algorithms continuously assess consumer demand and strategically allocate inventory to the fulfilment centre where it’s most likely to be sold. This approach not only improves stock availability and turnover but also shortens delivery times by positioning products closer to end consumers, leading to a smoother and more responsive supply chain.
Discover how our solution enhanced process efficiency for Pepe Jeans.
In the fashion industry, demand is becoming increasingly unpredictable. We needed a solution that offered more flexibility than a fixed asset in one location. ZEOS provided exactly that, enabling us to seamlessly move inventory based on demand while managing everything from a single point.
Benefits of a single stock pool
One Stock Pool offers numerous benefits that address the key challenges of inventory management for fashion brands. By consolidating inventory into a single stock pool, brands can enjoy:
Optimised allocation
Streamlined returns
Reduced holding costs
Improved profitability
Data-driven decision-making
Let's explore all the benefits in detail.
Optimised inventory allocation
A single stock pool allows for dynamic allocation of inventory based on real-time data, guided by advanced algorithms that predict demand shifts and optimise stock distribution.
This flexibility ensures optimal stock levels across all sales channels, reducing the risk of overstocking or understocking. For example, if a pair of jeans experiences a surge in sales on one platform, the inventory is swiftly reallocated to meet demand, maximising sales and preventing stockouts. ZEOS enables you to manage inventory dynamically across multiple channels like Zalando, About You, Otto, and your own e-commerce site, ensuring the right products are available where and when they’re needed.
Streamlined returns
Returns management is significantly simplified with a single stock pool. Returns can be processed back into the main inventory, regardless of the sales channel. This speeds up inspecting, refurbishing and returning goods to saleable stock, enhancing turnover and reducing clearance costs. ZEOS helps achieve an average back-to-shelf lead time of less than 7 days, depending on market and network setup.
Reduced holding costs
Centralising inventory minimises the need for extra stock at multiple locations. Pooling stock into one network consolidates operations, saving on storage expenses. ZEOS offers more than 12 fulfilment centres and 20 refurbishment facilities under one contract, ensuring efficient and cost-effective logistics.
Improved profitability
A single stock pool reduces the need for high-safety stock, freeing up capital and improving cash flow. By centralising inventory, the need for extra stock at multiple locations is minimised. This leaner inventory approach allows for investment in other business areas. ZEOS' AI-powered replenishment recommendations help maintain optimal stock levels, supporting growth and profitability.
Data-driven decision-making
One Stock Pool provides a unified dataset for better inventory decisions. Brands can analyse patterns and trends across marketplaces, adjusting purchasing and sales strategies accordingly. ZEOS offers a comprehensive platform for reporting on shipping, returns, cancellations and more, facilitating informed decision-making.
