Managing Seasonal Stock Fluctuations with Magento 2 Out of Stock Alerts

When talking about what determines success in eCommerce, most people talk about the product quality, marketing strategies, the pricing, and the level of customer service. What most merchants don’t realize that inventory management is equally important. Knowing what product to order, when to order, and from whom goes a long way in determining a Magento 2 store’s success.

Fortunately, Magento 2 offers a wide range of features to streamline the inventory management process. For advanced functionality, merchants also have the option to opt for third-party extensions. Within inventory management, the toughest challenge for every store owner is managing the seasonal stock fluctuation. Retailers need to manage sudden dips or spikes in product demand carefully.

Otherwise, they may end up ordering too little or too much. In both situations, the store suffers from significant financial losses. When customers can’t buy their favourite products due to stockouts, they are left extremely frustrated. They may have no other option but to buy the product from a competitor. This can cause their loyalty to shift from your store to a competitor.

But all this can be avoided with a simple Magento feature – Out of Stock Notification.

What is Magento Out of Stock Alert?

Suppose the customer wishes to buy A1 product from XYZ store. However, the product is out of stock. Instead of manually checking the website repeatedly to see if the product is back in stock, the user has the option to subscribe to a notification. This notification is shared with the user as soon as the product is restocked. This way, users don’t have to keep checking the website themselves, while store owners can recover lost sales due to product unavailability.

Causes of Seasonal Fluctuations

It is important to understand why seasonal stock fluctuations occur as it helps address the root cause. While seasonal stock fluctuations can occur due to a variety of factors, the most common ones are:

Holidays

During the holidays, people treat themselves and their loved ones with gifts. Christmas is one such example. Since a large number of people are buying products, it can lead to sudden increase in demand for specific products.

Special Days

Likewise, days such as Valentines Day or Black Friday can lead to stock fluctuations. For example, during the Valentines Day, people start buying chocolate and flowers.

Weather

Similarly, extremely cold weather can result in an increased demand for winter wear such as jackets. On the other hand, extremely hot weather can increase demand for beachwear.

Promotions and Events

Likewise, promotional events such as flash sales or new product launches can result in strong demand.

The Risks of Poor Stock Management

Why is poor stock management such a concern for store owners? Let’s explore:

Stockouts

Suppose a Magento 2 store has 100 products. Do you think that all products have equal number of sales? The answer is no. Based on the 80-20 rule, it is likely that 80% of the sales are generated from only 20 products. It may even be 10 products. Now, consider that the store failed to order the correct number for these products.

Instead of 100 pieces per product, only 50 were ordered. It means the store must contend with lost sales and disappointed customers. On top of it, you may force your existing customers to your competitors. Therefore, it is very important to avoid stockouts as it can undermine a store’s financial stability and competitiveness.

Excess Inventory

Similarly, excess inventory is as dangerous as stockouts. For example, instead of 100 items per product, the store ordered 250. According to trends, the maximum number of sales in a specific season is between 100 – 120. It means the rest of the items can be considered excess inventory.

This increases the cost of holding inventory. At the same time, too much capital is tied up in these items. It would have been more efficient to use the money elsewhere, such as product research, marketing, or anything else. There’s also a risk that the product may end up wasted due to long storage times.

The Role of Magento Out-of-Stock Alerts in Seasonal Stock Management

To deal with seasonal stock fluctuations in a more effective manner, it is better to use out of stock notification for Magento 2. The Magento 2 back in stock notification helps manage the fluctuations in various ways:

Preventing Missed Sales During High-Demand Periods

When a product is out of stock during a peak season, it leads to lost sales. However, when you have set up the Magento 2 out of stock notification, customers can subscribe to be notified once the product is restocked. Thus, instead of forcing customers to shop at a competitor store, you can retain customers. Apart from the sales, this is an effective way to re-engage your users.

Demand Forecasting

Most merchants don’t understand how the out-of-stock notification for Magento 2 can help with demand forecasting. Suppose 100 people subscribed to the notification. What does it communicate? It shows that there are 100 potential users willing to buy the product. The store owner can use the information to place the order accordingly. It helps avoid ordering too much or too little inventory. Likewise, the information can be used to forecast demand for the next seasonal period.

Automating Customer Communication

Instead of manually informing the customers that the product is restocked, store owners can simply automate this process. Once subscribed, the users will receive an email notification. This ensures that no user is overlooked.

Final Thoughts on Magento 2 Back in Stock Notification and Stock Fluctuation

This concludes our article on how a simple, yet effective feature called Magento 2 Notify Me When in Stock can help store owners deal with seasonal stock fluctuations. There are two ways to enable this feature, including using Magento’s in-built functionality. The only downside to it is that the functionality is quite limited. In contrast, using a third-party extension such as Magento 2 Out of Stock Alerts by FME is a better option, due to advanced features. To know more about this extension and how it adds value to your store, reach out to our support team.