Fanatics has a fan base of 100 million consumers it can market to. And after all that work of getting shoppers to the right product, it better be in stock.
Out-of-stocks can hinder the customer experience, and the licensed sports apparel retailer is updating its demand and supply chain software to ensure this doesn’t happen, Ben Pivar, Senior Vice President and Head of Brands and Supply Chain Technology at Fanatics, told attendees at the o9 Solutions Aim 10x Summit in Chicago in September.
“You will always have out-of-stocks,” Pivar told Chief Marketer. “The question is how bad are the out-of-stocks and how much better can you get them? Planning is never 100% accurate. We just want to be a little better.”
But when you’re Fanatics and have a $13 billion business, “a little better” can translate to millions of dollars.
Supply Chain Transformation
The sports world moves fast, but apparel planning does not, with lead times anywhere from nine to 24 months out, Pivar said. This means Fanatics’ inventory carries a level of risk because of unexpected player trades, injuries or unexpected team success.
Pivar gave the example of the Dallas Cowboys trading Micah Parsons to the Green Bay Packers in 2025.
“When that trade happened, we had 175,000 jerseys sitting in warehouses with his name on the back with the Dallas Cowboys on it. And that wasn’t worth very much,” Pivar said.
The brand decided to segment its supply chain into three areas to help manage the risk and have roughly a quarter of its inventory be more flexible:
- 65% of its inventory has long lead times and higher risk.
- 10% of its inventory is made-to-order merchandise that Fanatics prints on demand in “hot markets,” such as for Super Bowl winners.
- 25% is blank inventory, made onshore or nearshore, that stays flexible until it’s printed.
Balancing Cost, Demand and Speed
Using the Micah Parsons example, Fanatics will now assess the risk of each player and have a portion of those jerseys already printed and another portion of the team jerseys reserved as blank to be printed on demand close to the U.S. or in the U.S. and shipped to the customer within a two-week window.
With its supply chain structured this way, Fanatics can wait and see what demand looks like before it makes too large of an investment, Pivar said.
“It’s the trade-off between cost and risk that we’re trying to optimize against,” he said. “It’s trying to figure out the calculus so that we don’t end up with a lot of product that has to be marked down, but also don’t push the cost model. Because the cost model for long lead time is much less than the nearshore, which is less than our onshore.”
A more agile supply chain that can print jerseys for newly traded players on demand will also help with shipping speed — or as Fanatics calls it internally, “time to porch,” Pivar said.
“Our goal is to be faster than our competition,” Pivar said. “If we can announce that ours are two weeks before somebody else, that’s a benefit for us.”
Fewer Out-of-Stocks Save Fanatics Money
Demand planning is the first chapter of Fanatics’ 2025-2030 supply chain reinvention, Pivar said. The company is using o9’s technology for this transformation.
“We believe we can save $15 million in markdown avoidance,” Pivar said about this demand plan improvement. “We can actually improve product availability, which is really a revenue increase by 8%. Then we see $65 million in cost takeout through inventory management. None of this works if we don’t have a good demand plan to start.”
This was Fanatics’ goal at the onset of this project in 2025. Currently, its core demand forecasting is live with key accounts, which is already producing its target results.
Within the first quarter after going live, Fanatics has improved its in-stock rate, generating $5 million in additional sales. That means Fanatics sold products that would have otherwise been out of stock. For its typical shopper, the customer experience will be better because more of the products they want will be in stock and ship faster, Pivar said.
“Consumers want their product when they want it,” Pivar said. “If we get the product when they want it and we do a better job than other people, then we’re winning. Planning is the key to that.”
