Why is Target so bad at keeping items in stock?

[SigningLady]

You aren’t talking about profit or loss, you’re talking about the cost of holding.

The cost of space in a store or warehouse isn’t just the overhead, it’s the lost profits of what you could have put there instead.

It’s the tostitos argument. “Will this nonsense a vendor wants to sell me make as much money with as little effort as Tostitos?”

Secondly, you have to understand consumers. It’s the old 80-20 rule. 80% of sales come from 20% of the product. Consumers want choices but also are very consistent in their choices. They want the option of 40 kinds of salad dressing, cereal, ice cream, but they will spend 80% of their money on the same three DPCIs. They want choice but they won’t choose. If you cut the store back to only things they buy regularly, you’re at CVS. It’s human nature. You have to keep stuff they will only rarely buy in order to get them to believe they have “chosen” anything at all.

That very nicely explains all the dust I find on a lot of items in the store! 🤣

 

[Luck]

But again, that's weird bookkeeping. I've been an accounting clerk at a few places and asked the accountants to explain the numbers, profit/loss is a marathon. You don't want to over-extend yourself at first, but a certain amount of short term loss that results in long term gain is the normal flow of finances.

And what would really help is explaining to not just me but all these folks why they keep getting more and more stuff that won't fit on the sales floor and hangs around the backroom until it is salvaged out. Why there's a limit for how many items can go on the floor, why there's a hard limit of physics for what can be squished, but the arrivals of that item just won't stop. Why there are items that for that location won't sell, so clearly no need for replenishment, but it won't stop coming. When you can show how these very common daily shipments fit your explanation for why too many TVs aren't sent (but all these other items are), and why short term meeting demand so people don't go to competitors and will haunt electronics forever means that long term profit won't be realized, then I will understand.

Fluttervale said it very nicely. As to the rest of your question, there are multiple reasons which I will explain.
The first is that the DC has been sitting on a product that isnt moving for too long and it gets offloaded to stores in the hope that the store will be able to sell it somehow. The only real alternative is to liquidate the product which is barely better than just throwing it away in terms of profit.
The second is flow items. You can tell them because the label will say "conveyable flow". Products like shampoo, small boxes that dont palletize well are run through ART and sent right to be loaded without ever touching the warehouse.
The third case is for OT items. This one is harder to tell store side because only a single box on the pallet will have the OT label. OT means Over Threshold and indicates for one reason or another we dont have space to store the product and so it must be sent out.
Any particular issues should be brought up with an ETL, STL, or possibly even escalated higher to determine the cause.
I can specifically recall an instance where gery baby food was incorrectly recieved, mixing beef with chicken, and stores kept complaining they were recieving too much chicken and were out of stock of beef. Well in the system this wasnt true. Even thought that was the case with the product. And after a few escalations of the problem the cause was determined and fixed.
But at the end of the day the cold hard truth is that the DCs needs outweighs stores needs and sometimes the problem is one that is being done intentionally for the greater good and wont be able to be resolved.

 

[Tessa120]

Some for choice is great. But the absolutely stuffed quantities that stores are getting of items that aren't selling nearly as fast as they are coming in? How many people are saying they are salvaging out large quantities of items because there was so much it didn't have a prayer of the bulk being sold?

And by the numbers, what's going to make more money? A bunch of sim cards for cellular phones that also need purchasing, or a pallet of paper towels that are only a few bucks each?

 

[Luck]

Some for choice is great. But the absolutely stuffed quantities that stores are getting of items that aren't selling nearly as fast as they are coming in? How many people are saying they are salvaging out large quantities of items because there was so much it didn't have a prayer of the bulk being sold?

And by the numbers, what's going to make more money? A bunch of sim cards for cellular phones that also need purchasing, or a pallet of paper towels that are only a few bucks each?

According to modern mega business models, the paper towel. We can process 50 of those paper towel pallets in the same time we would sell a single pallet of niche electronics. The bird in the hand being worth more than two in the bush.
High volume low profit over low volume high profit is THE single biggest model for success of all major corporations in the world.

 

[Fluttervale]

Some for choice is great. But the absolutely stuffed quantities that stores are getting of items that aren't selling nearly as fast as they are coming in? How many people are saying they are salvaging out large quantities of items because there was so much it didn't have a prayer of the bulk being sold?

And by the numbers, what's going to make more money? A bunch of sim cards for cellular phones that also need purchasing, or a pallet of paper towels that are only a few bucks each?

The paper towels, of course. How many pallets of paper towel can you sell in the time it takes to sell one pallet of SIM cards? Also there is very little margin in SIM cards, but more in paper towels.

 

[Tessa120]

How low volume can it be if the stores are begging for more?

And no one has addressed the other point, that DCs are sending stores far too much quantity of stuff, far more than can be sold and so much that the backrooms are squished. Why kvetch about the floor space cost of an item that stores don't want held at the DC and want shipped to them (so no more floor space taken) but the DC insists they will hold instead of shipping, but then at the same time happily send stuff repeatedly that the stores can't put on the floor and sell and don't want? What makes these sim cards so special they should be held back and therefore have justification to not order at all, when there is no regard for holding anything else back no matter space considerations or sales trends.

 

[Luck]

How low volume can it be if the stores are begging for more?

And no one has addressed the other point, that DCs are sending stores far too much quantity of stuff, far more than can be sold and so much that the backrooms are squished. Why kvetch about the floor space cost of an item that stores don't want held at the DC and want shipped to them (so no more floor space taken) but the DC insists they will hold instead of shipping, but then at the same time happily send stuff repeatedly that the stores can't put on the floor and sell and don't want? What makes these sim cards so special they should be held back and therefore have justification to not order at all, when there is no regard for holding anything else back no matter space considerations or sales trends.

I already did answer that question. Check the labels. If it says Flow, it is something that for one reason or another we could not store in the warehouse. If it does not say Flow, then it is something in the warehouse that could not be held longer. Ordering is a big gamble. What you see at stores we can be processing months in advance. If we order 5 pallets of shovels and no snow ever falls, we still have to move that product even if no one is buying. High risk items like shovels are so tricky that we have an entire second type of DC (UDC) used to store and hold them.
I completely understand the frustration, but selling things is the stores job. Your ETLs should be working on sales plans, setting end caps, etc. To try to move the product and then clearencing it out to try to recoup any money we can.
A single store over performing on a single item does not warrant increasing the order size. The DC that serves your store is serving upwards of 75 other stores hundreds of miles away across dozens of states. Further the stores can range from D level that will receive maybe 2 or 3 trucks a week to AAA+ that are getting double trucks daily.
It has to consider of all their needs, not just yours.
Maybe to put it into perspective your store probably on average receives 5 trucks a week that are around ~2,000 cartons. A total of 10,000.
My DCs weekly plans is to ship ~750,000 cartons this week and is calling overtime. Your stores needs are ultimately a drop in the bucket. If you have contacted a proper person about this issue, and they have been unable to get you more, that is because it isnt profitable enough to warrant it. Plain and simple.

 

[Tessa120]

Come up with a sales plan? Are you completely ignoring that there is a certain saturation point where absolutely no more can be sold and judging by the number of posts that are listing ridiculous amounts of salvage that means most stores are hitting that point? If it's a few stores, the stores are probably not selling right. If it's huge amounts of stores, they are getting too much.

So please address that point. Why is so much stuff of a type that simply cannot be sold in the quantity received before the next shipment of that item is sent? And since the DC happily does this, then why are they so stubborn about a high demand item?

 

[Luck]

Come up with a sales plan? Are you completely ignoring that there is a certain saturation point where absolutely no more can be sold and judging by the number of posts that are listing ridiculous amounts of salvage that means most stores are hitting that point? If it's a few stores, the stores are probably not selling right. If it's huge amounts of stores, they are getting too much.

So please address that point. Why is so much stuff of a type that simply cannot be sold in the quantity received before the next shipment of that item is sent? And since the DC happily does this, then why are they so stubborn about a high demand item?

Let's take a second, step back and keep in mind that I am not the DC, just the messenger here. So please don't shoot me 😁 anyway I think you underestimate the loss we take on salvage. It is basically giving away the products for free. If we can reduce even a single pallets worth of salvage by sending it all to the store and seeing if they cant sell one or two more before having to send it back, then we recoup a lot of money. The shipping back and forth is "free" anyway so we might as well try.
If you are full to the brim, again that's up to the sales ETL to figure out. If there isnt a plan in place to make it work then that's their failure. This isn't exactly anything new.

 

[Luck]

Come up with a sales plan? Are you completely ignoring that there is a certain saturation point where absolutely no more can be sold and judging by the number of posts that are listing ridiculous amounts of salvage that means most stores are hitting that point? If it's a few stores, the stores are probably not selling right. If it's huge amounts of stores, they are getting too much.

So please address that point. Why is so much stuff of a type that simply cannot be sold in the quantity received before the next shipment of that item is sent? And since the DC happily does this, then why are they so stubborn about a high demand item?

Let me try to put it this way. You are simultaneously asking why we cannot order more of a product, while simultaneously complaining we are ordering too much of another. Do you see the irony in that? For the exact reason that one problem is occurring, the other one cannot be fixed. We cannot bulk order more SIM cards because then we will have too many and will end up needing to drown you in hundreds you will never sell through. We cannot order less of the products you want less of because then we might risk not having enough if they become big sellers. If I could flip a switch and make the change for you I would! But the reality is by the time the product gets to the store the order plan was in place weeks, months, potentially even years before.
You figure out the secret to perfectly predicting future market trends and you will be making 7-8 figures at the head of the corporation. Otherwise just let your ETL know of the issue, and allow them to start the ticket and escalate it until it is figured out. Just understand the answer you get back might just be that nothing can be done.

 

[Mikuhl]

I'm starting to make a mySupport for every item a guest wanted to buy but was unable to buy it because it was out of stock.

 

[Fluttervale]

I'm starting to make a mySupport for every item a guest wanted to buy but was unable to buy it because it was out of stock.

You are really failing to understand how retail works. If you are out of something that the DC has, you either had a sales spike (sold more than forecast) or your onhands are wrong. If you are out of something and the DC doesn't have it, either the DCs area had a sales spike, the item was limited stock and headed to discontinued, or the manufacturer isn't able to sell us more at the moment.

I noticed recently that it took corporate about three months to adjust forecasts for a long term sales improvement. In the meantime I was just always half empty.

 

[tholmes]

You are really failing to understand how retail works. If you are out of something that the DC has, you either had a sales spike (sold more than forecast) or your onhands are wrong. If you are out of something and the DC doesn't have it, either the DCs area had a sales spike, the item was limited stock and headed to discontinued, or the manufacturer isn't able to sell us more at the moment.

I noticed recently that it took corporate about three months to adjust forecasts for a long term sales improvement. In the meantime I was just always half empty.

Nothing wrong with getting a leg up on the stuff that actually isn't coming in properly before corporate notices. One problem with a huge logistics infrastructure like Spot's is that stuff falls through the cracks really easily. One aisle can go without product at nearly 30-40% OOS for months before anything changes in my experience (with product available in the DC). Submit the MySupports. If it's actually an issue they haven't caught, it fixes stuff sooner. If not, then no real harm than the couple minutes work it took to submit the ticket (in theory).

 

[Mikuhl]

You are really failing to understand how retail works. If you are out of something that the DC has, you either had a sales spike (sold more than forecast) or your onhands are wrong. If you are out of something and the DC doesn't have it, either the DCs area had a sales spike, the item was limited stock and headed to discontinued, or the manufacturer isn't able to sell us more at the moment.

I noticed recently that it took corporate about three months to adjust forecasts for a long term sales improvement. In the meantime I was just always half empty.

Now that we have gotten a reasonable amount of sim cards they are finally sending replacements every day now that we can actually sell them. I really think they just never sent any because it looks like we never sell any because we never had any. On hands were correctly audited to 0 for many months. There's something bigger that's wrong with targets systems.

 

[IWishIKnew]

I'm starting to make a mySupport for every item a guest wanted to buy but was unable to buy it because it was out of stock.

Can I mySupport every time a guest wants to buy something that went away in our remodel?

 

[Mikuhl]

Can I mySupport every time a guest wants to buy something that went away in our remodel?

There is actually a mySupport option to carry any item that exists in the system.

 

[Staffwoman]

Let's take a second, step back and keep in mind that I am not the DC, just the messenger here. So please don't shoot me 😁 anyway I think you underestimate the loss we take on salvage. It is basically giving away the products for free. If we can reduce even a single pallets worth of salvage by sending it all to the store and seeing if they cant sell one or two more before having to send it back, then we recoup a lot of money. The shipping back and forth is "free" anyway so we might as well try.
If you are full to the brim, again that's up to the sales ETL to figure out. If there isnt a plan in place to make it work then that's their failure. This isn't exactly anything new.

I reduced salvage everyday. I may increase the compactor load, but that's one way to do it.

 

[Tessa120]

Let's take a second, step back and keep in mind that I am not the DC, just the messenger here. So please don't shoot me 😁 anyway I think you underestimate the loss we take on salvage. It is basically giving away the products for free. If we can reduce even a single pallets worth of salvage by sending it all to the store and seeing if they cant sell one or two more before having to send it back, then we recoup a lot of money. The shipping back and forth is "free" anyway so we might as well try.
If you are full to the brim, again that's up to the sales ETL to figure out. If there isnt a plan in place to make it work then that's their failure. This isn't exactly anything new.

Okay, not shooting the messenger, but please explain how this is the fault of the ETL for not figuring out how to make stuff sell so quickly there's no logjam in the back room. When I started in 2016 there were 3 trucks a week, occasionally a 4th, and a rare double was like a snowpocalypse. When I left 2nd quarter last year, we were guaranteed a truck every day and doubles averaged once a week. Yet our sales floor was no larger, there was no greater place to put all the stuff. The area population served by my old Target actually dropped by roughly 10% between 2016-2019, so less customers. For an ETL to get the larger quantity on the floor with a plan to sell to less people, there needs to be some bending of spacetime and some shmoozing the laws of physics (specifically two places in the same place at the same time) and a bit of reverse time travel so you can loop and sell repeatedly to the same customer at the moment of time they had money in their hand.

 

[Fluttervale]

Okay, not shooting the messenger, but please explain how this is the fault of the ETL for not figuring out how to make stuff sell so quickly there's no logjam in the back room. When I started in 2016 there were 3 trucks a week, occasionally a 4th, and a rare double was like a snowpocalypse. When I left 2nd quarter last year, we were guaranteed a truck every day and doubles averaged once a week. Yet our sales floor was no larger, there was no greater place to put all the stuff. The area population served by my old Target actually dropped by roughly 10% between 2016-2019, so less customers. For an ETL to get the larger quantity on the floor with a plan to sell to less people, there needs to be some bending of spacetime and some shmoozing the laws of physics (specifically two places in the same place at the same time) and a bit of reverse time travel so you can loop and sell repeatedly to the same customer at the moment of time they had money in their hand.

One thing I do with my team is prioritize my endcaps. If I have a salesplanner that is light but a lot of other stuff, I'll either pull the salesplanner or flex a relevant product I have a lot of. I also take away incremental space from vendor products if they can't keep it full. (Market.) Target has also done a lot to improve the logistics flow in the last 9 months. I went from a back room full to the brim (literally--freezers and coolers too) to having just wacos and being able to pull down shelving in my coolers and freezer. My share of the truck is smaller.

 

[Luck]

I'm starting to make a mySupport for every item a guest wanted to buy but was unable to buy it because it was out of stock.

Okay, not shooting the messenger, but please explain how this is the fault of the ETL for not figuring out how to make stuff sell so quickly there's no logjam in the back room. When I started in 2016 there were 3 trucks a week, occasionally a 4th, and a rare double was like a snowpocalypse. When I left 2nd quarter last year, we were guaranteed a truck every day and doubles averaged once a week. Yet our sales floor was no larger, there was no greater place to put all the stuff. The area population served by my old Target actually dropped by roughly 10% between 2016-2019, so less customers. For an ETL to get the larger quantity on the floor with a plan to sell to less people, there needs to be some bending of spacetime and some shmoozing the laws of physics (specifically two places in the same place at the same time) and a bit of reverse time travel so you can loop and sell repeatedly to the same customer at the moment of time they had money in their hand.

Clearence. Two Targets in my city. Last year one target clearence out the majority of the large planters that weren't selling early. Got rid of it, used the space for other things. The other store didnt clearence it, sat on it for an additional month. Ended up clearencing it anyway! I wont claim to be an expert here. Perhaps the rules for clearence are incredibly strict. But I have seen more than enough flexibility with pricing to sell items to beleive it is the power of the sales ETL to price things to move.

 

[Tessa120]

So you are saying that a reasonable answer to having too much product coming in is to sell it below its value rather than just slowing down on the shipping? That it's better to clearance it all rather than scaling down shipments to match reasonable demand? Do you see how stupid and financially broken that sounds?

And before you give the most likely reason why it must be that way, DCs just simply order the stuff in quantities reasonable for stores' ability to sell, not order tons, ship it all out because there's no room, and expect stores to manually mark to clearance ahead of schedule.

And back full circle, if you guys are sending that many planters, you could hold back on the planters that will sell only when marked clearance (or removed due to reaching salvage price) and instead ship sim cards that will sell at full price coupled with phones that will cost more than a planter and won't be clearance.

 

[Black Sheep 214]

The problem starts in the buying office. Yes, it’s difficult to predict what will or won’t sell in what quantities, but this type of knowledge/experience/intuition is needed to run a successful business. Having fewer remodels that waste money removing serviceable floor tile only to replace it with the exact same tile, and putting that money into more and better market research wouldn’t be a bad idea. If Spot had better buyers who didn’t overbuy massive amounts of overpriced product that guests don’t want, need or buy, the DCs wouldn’t have to dump massive amounts of stuff in the stores that the stores can’t handle and ends up salvage. A store that can’t make its’ toys sales goals during the holidays needs to take a closer look at the buyers...

 

[Fluttervale]

So you are saying that a reasonable answer to having too much product coming in is to sell it below its value rather than just slowing down on the shipping? That it's better to clearance it all rather than scaling down shipments to match reasonable demand? Do you see how stupid and financially broken that sounds?

And before you give the most likely reason why it must be that way, DCs just simply order the stuff in quantities reasonable for stores' ability to sell, not order tons, ship it all out because there's no room, and expect stores to manually mark to clearance ahead of schedule.

And back full circle, if you guys are sending that many planters, you could hold back on the planters that will sell only when marked clearance (or removed due to reaching salvage price) and instead ship sim cards that will sell at full price coupled with phones that will cost more than a planter and won't be clearance.

There's no sense in holding the planters. The DC doesn't have a storefront.

In that argument, the issue isn't with the DC. It's with the buyers that purchased too much of a time-sensitive product in the first place.

 

[SigningLady]

Clearence. Two Targets in my city. Last year one target clearence out the majority of the large planters that weren't selling early. Got rid of it, used the space for other things. The other store didnt clearence it, sat on it for an additional month. Ended up clearencing it anyway! I wont claim to be an expert here. Perhaps the rules for clearence are incredibly strict. But I have seen more than enough flexibility with pricing to sell items to beleive it is the power of the sales ETL to price things to move.

We don't have the ability to make something go on clearance at the store level. That is completely determined by corporate. All pricing is determined by corporate. At the store we can do temporary price cuts on certain fresh grocery items and we used to be able to repackage items at a lower price, or defect items out, but we can't make something go on clearance just because we have a lot of it.

 

[Luck]

We don't have the ability to make something go on clearance at the store level. That is completely determined by corporate. All pricing is determined by corporate. At the store we can do temporary price cuts on certain fresh grocery items and we used to be able to repackage items at a lower price, or defect items out, but we can't make something go on clearance just because we have a lot of it.

Is it in the power of an ETL to appeal to corporate to have items go clearence? Seems odd to me some stores would clearence an item while others do not.