Carryover Stock is The Hidden Complexity Costing You
Seasonless, Capsule Wardrobe or a Strategic Sales Decision...
For fashion brands, the concept of carryover stock might seem simple on the surface: you take a product from one season and roll it into the next. But dig a little deeper, and you’ll uncover a logistical headache that many brands struggle to solve. From tracking sales history to ensuring the right SKUs are used in the right contexts, the operational challenges of carryover stock are anything but straightforward. Let’s break it down.
What Is Carryover Stock?
Carryover stock refers to products that persist across multiple seasons. It might be your best-selling grey sweatshirt, a staple hoodie, or a capsule wardrobe classic. For some brands, carryover is a core part of their strategy—think capsule wardrobe companies where seasonless pieces dominate. For others, it’s more of a necessity, driven by sales performance and production efficiency. In some cases, carryover stock includes items that didn’t sell in one season, prompting a strategic choice to sell them in the next season or even in a subsequent year’s season.
But whether your brand thrives on carryover or avoids it, the challenge is the same: how do you manage carryover stock without losing track of its history or its relevance in future seasons?
The Complexity Beneath the Surface
Carryover stock isn’t just about keeping a product in your catalogue. It’s about tracking how products perform across seasons, managing SKUs effectively, and avoiding inventory fragmentation in retail environments.
Take tracking seasonal sales: do you view a carryover item as part of its original season, the current season, or both? This becomes crucial when planning for upcoming collections. If a product was created for SS24 but still sells in AW25, your reports need to reflect this crossover to provide accurate insights.
Then there’s SKU management. What happens when the product evolves? For example, a sweatshirt might switch to organic cotton, necessitating a new SKU. While the customer sees the same grey sweatshirt, your systems now juggle two SKUs that need to be linked—a parent-child relationship that many PLMs and BI tools aren’t equipped to handle.
In a retail environment, store allocations complicate things further. If you’re sending stock to stores, you don’t want multiple SKUs for what is effectively the same product. Instead, you need a unified reference to prevent fragmented inventory. Without it, you risk overstocking some sizes while running out of others, leading to lost sales and customer frustration.
Current Approaches (and Their Limitations)
Brands approach carryover stock management in various ways, but none are perfect:
Time-Stamping: Some brands try to time-stamp products within their systems, tagging them with the seasons they’ve existed in. This approach helps with reporting but often requires custom solutions or manual input.
PO Tagging: Others tag purchase orders as “carryover” to track repeat orders. However, this doesn’t solve the issue of linking SKUs or ensuring consistent reporting across seasons.
Consolidated SKUs: Keeping a single SKU for carryover items might seem like the easiest solution, but production changes (e.g., a new supplier or fabric) often make this impossible.
Why It Matters
Without a clear carryover stock strategy, brands risk facing several challenges. Sales reports that don’t account for carryover items can skew forecasts and impact future planning, leading to inaccurate reporting. Poor SKU management can result in inventory imbalances, with some sizes overstocked and others unavailable, causing overstock or stockouts. Additionally, on platforms like Shopify, having multiple SKUs for the same product can confuse customers, especially if one version is out of stock while another is available, which only adds to customer frustration..
A Better Way Forward
While there’s no one-size-fits-all solution, the ideal approach combines technology and process improvements:
Enhanced PLM Systems: Invest in tools that support linked SKUs and allow for time-based tagging of carryover items. Parent-child relationships between SKUs can ensure production changes are reflected without creating inventory chaos.
Custom BI Reporting: Work with your BI team to build reports that capture both original and current seasons for carryover items. This dual-metric approach ensures sales history and seasonal performance are accurately tracked.
Streamlined SKU Strategy: Limit SKU changes wherever possible. If updates are necessary, ensure your systems link the old and new SKUs to maintain continuity.
Cross-Department Collaboration: Align merchandising, planning, and IT teams to ensure carryover strategies work across the business. Misaligned priorities often exacerbate carryover challenges.
Final Thoughts
Carryover stock is an operational challenge that doesn’t get enough attention. While it might seem like a minor issue, the downstream impacts—from reporting inaccuracies to customer experience hiccups—can be significant. By taking a proactive approach to managing carryover stock, fashion brands can unlock efficiencies, improve forecasting, and ultimately drive better results.
The question is, how much longer can your brand afford to leave carryover stock on the back burner?