1. Consider a sporting goods store and apply a type A, B, and C classification method to its inventory. What items are likely to turn over often as a result of seasonal demand?

2. Tuesday Morning’s business model offers a unique counter-argument for linking e-commerce and inventory management. Can you think of other types of stores or industries in which inventory management problems would be an obstacle to the effective use of an e-commerce retail system?

Although some large discount retailers like T.J. Maxx (subsidiary of TJX Companies, Framingham, MA) and Saks Fifth Avenue OFF 5TH (subsidiary of the Hudson’s Bay Company, New York, NY) have relied heavily on ecommerce, the closeout retailer Tuesday Morning (Tuesday Morning Corporation, Dallas, TX) made the decision to shut down its e-commerce site. Instead the firm chose to focus on its brick-and-mortar stores. This decision seemed unusual at a time when most retailers were increasing their online shopping sites.

Nevertheless, maybe Tuesday Morning’s decision isn’t as unusual as it seems. Unlike discounters, closeout retailers like Tuesday Morning and Big Lots (Big Lots, Inc., Columbus, OH) buy closeout items at wholesale prices from other retailers and then sell them at steep discounts. Closeout retailers face challenges that larger retailers don’t, namely, ever-changing inventory that moves in and off shelves much too rapidly for them to keep their ecommerce sites updated. Inventory management and e-commerce software have improved, which is why it makes sense for Saks OFF 5TH to enter into this retailer sector. Yet, the best software management systems in the world cannot compensate for rapid inventory turnover. Rather than end up with unhappy online customers and lost revenue, Tuesday Morning is sticking to what it does best.