Solving the Overstock Dilemma with Daniel Parekh-Hill, Flare (episode 468)
Daniel Parekh-Hill is the Co-Founder & CEO of Flare, where they’re on a mission to create more profit and less waste for eCommerce businesses.
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Dive in:
[00:59] Merchandising, overstocks, and surprising customer behavior.
[04:00] Building a better future by connecting businesses and customers.
[07:57] Customer data: better than what they say. Solution: customer preorders.
[10:12] Scaling SKUs drives sales, cash flow, cost.
[14:28] Alps and Meters: Managing seasonal stock effectively.
[16:57] Flexible ordering: capture demand, sell current stock.
[21:06] Teams use Notion and Slack software.
Motivation Behind Flare
Daniel got into eCommerce after spending three years doing demand forecasting for consumer and retail companies. Recognizing the challenges in predicting future demand accurately, with forecasts being wrong 30% of the time, he saw the problem beyond numbers. He saw the significant impact of waste on the environment.
Daniel founded Flare with the goal of simplifying the process for businesses to understand future demand. He aimed to be a catalyst for change by transforming the way businesses communicate and build relationships with customers. Flare’s approach involves connecting businesses and customers more closely. This turns the prediction of future demand into a collaborative effort, ultimately reducing waste and uncertainty in the supply chain.
Current Strategies for Overstock Problems
Daniel shares a few ways brands currently handle overstock problems.
- Looking at analytics, which can be guesswork-based for SMEs and more AI-based for bigger brands.
- Circularity in materials, such as using dead stock.
Some businesses also choose to place smaller orders to minimize overstock, but Daniel notes that the effectiveness of this approach depends on the size and logistics capabilities of the business.
The Case of Preorders
Daniel says the term “preorder” is not really something Flare uses because of its historical association with out-of-stock or upcoming products.
Flare’s approach is to focus on unlocking choice for customers. This enables them to make purchases for any future timeframe, irrespective of product availability. The solution extends beyond traditional preordering limitations. It provides flexibility for in-stock and out-of-stock items. Ultimately, this strategy allows customers to plan ahead and businesses to gain visibility into future demand, shifting away from the constraints of immediate availability.
The Benefits of Flare
The three major advantages for brands using Flare are:
- Increased sales;
- Improved cash flow by bringing revenue into the business earlier; and
- Cost reduction by aligning demand and supply more effectively.
Daniel explains that when launching with brands, testing is conducted to ensure optimal functionality and benefits.
Two main areas where Flare gains traction are seasonal businesses and forward-looking categories. Daniel notes that consumers in these areas appreciate the value of certainty, peace of mind, and the ability to secure orders and plan ahead.
Case Study: Alps & Meters
Alps & Meters, a luxury sportswear brand and Flare customer, faced challenges with seasonal sales and managing high-value inventory. Flare helped smooth out demand, allowing the brand to secure orders on current and upcoming stock.
This approach helped optimize purchase orders, logistics, and distribution. Since then, statistics have improved, with 32% of orders placed via Flare options and shoppers adding 12% more to their Flare baskets. These numbers align with the average across Flare’s customer base, showing strong consumer adoption and increased spending due to the flexibility and choice provided by Flare.
eCommerce Book Top Tip
- Shoe Dog: A Memoir by the Creator of Nike by Phil Knight
eCommerce Traffic Top Tip
- Be kind. Being kind goes a long way in fostering collaboration and partnerships.
Tool Top Tip
- Notion productivity app and Slack communication tool
- On a more personal level, Daniel says he charges his phone outside his room so he can totally switch off at night and also not look at his phone first thing in the morning.
Carbon Top Tip
- Install Flare so you can reduce excess production.
Interview Links
- Check out Flare
- Email Daniel at daniel@getflare.co.uk
Related episodes
- From Studio to Wholesale: the Journey of a Sustainable Textile Brand with Helen Round (episode 439)
- Create More Profit with bestselling author Ciara Stockeland of Inventory Genius (episode 441)
- Clearing Unsold Stock: with Katy Christie-Miller from Finders Keepers Club (episode 444)
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