Turning the Tide on Turnover
Tags: December 2022, E-commerce, Retail, Retail Logistics
The pandemic’s effect on inventory turnover was significant, but more recent data suggests that the situation may be improving for e-commerce brands.
Using customer data, ShipBob aggregated average inventory turnover rates from 2020 to 2022 to examine how quickly e-commerce brands sell through their inventory. The report finds that overall average turnover rate rose to 0.85 in 2022 compared with 2.04 in 2020. In the three years examined:
- Average turnover rates were highest (2.04) in 2020 at the beginning of the pandemic as more shoppers turned to e-commerce options due to lockdowns.
- As lockdowns began to ease in 2021, average turnover rates began to drop (1.59). However, supply chain delays prevented quicker recovery.
- The first half of 2022 saw turnover rates decline significantly (0.85) as inventory delayed from Q4 2021 began to arrive.
In each year studied, mid-market/enterprise merchants performed significantly better when compared with all merchants overall, perhaps due to more sophisticated forecasting and higher technology adoption.