No-Inventory Stores

February 29, 2020
No-Inventory Stores

Showrooms have existed for many years.  Now, however, more stores are turning to the concept of a showroom that has very little inventory—especially clothing stores.

The lack of inventory generates several advantages associated with less inventory.  In many cases, the stores are not reducing the size of the store, they are replacing the inventory with experiences.  The inventory can be replaced by personal stylists, cafes, a streamlined return desk, or office space.

The Canada Goose store in Toronto has taken the experience approach to new levels with a daily snowstorm.  Customers begin “The Journey” by walking through “The Crevasse” that simulates walking on cracking ice.  Another stop on “The Journey” is the “Gear Room.”  This room resembles a Norway seed vault.  It is where the customers select Canada Goose coats and accessories to try out in “The Cold” room.  In this room, arctic conditions are simulated, with the temperature set at 10 degrees Fahrenheit.

If “The Journey” has gone according to plan, customers will leave the store empty-handed.  But, they will be anticipating the delivery of their new Canada Goose gear.

Video Spotlight:

This post is based on the Forbes article, The Rise and Benefits of No-Inventory Stores, by Guy Yehiav, January 13, 2020; the CNBC article, The New Canada Goose Toronto Store Doesn’t Have Inventory, But It Does Have A Daily Snowstorm, by Courtney Reagan, December 4, 2019; and the YouTube videos in the Video Spotlight. Image source: Shutterstock / spaxiax.

Discussion Questions:

1. What are the benefits of having no inventory in the store?

Guidance: The elimination of inventory offers several cost savings.  By having no-inventory stores, the inventory can be centralized at a warehouse allowing higher fulfillment rates with less inventory.  This is especially true for clothing, as multiple sizes and colors are desired by the customer.  By eliminating the inventory in the store, a smaller store can be used.  As stores are generally in more desirable areas, the cost of the store is higher compared to warehouses that are typically located in less expensive areas.  Further cost savings result from the inventory in the store not having to be re-stocked and re-arranged.  This has an added benefit that the retail employee can now spend more time on other activities.   A final benefit is that many stores are adding experiences in their store where the inventory used to reside.

2. What are the drawbacks to carrying no inventory?

Guidance: The biggest drawback is customers might want to take the item with them.  With no inventory, the customer will have to wait for the delivery of their item.  Many no-inventory stores arrange for fast delivery of the item to offset not receiving the item at the store.


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