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Retail management

AGENDA
 Concept of merchandising
planning.

 Implications of merchandising
planning

 Process of merchandising
planning

The concept of Merchandise planning

 Merchandising Planning

 planning and control of the merchandise inventory


while balancing the customer’s expectation and
retailer’s strategy.
 Right assortment of goods.
 Substantial depth - availability.
 Choice available to customer increases.
 Required goods always available.
Implications of merchandising plannig

Fin a n ce – Purchase order and


 Finance
p ro fita b ility. Payment to suppliers, Profitability measurements

a rke tin g – Advertizing and


M

N ew product introductions, Developing ads


sa le s p ro m o tio n s.

Purchase Order Details


Warehouse & Logistics

Development sales promotions


W a re h o u sin g & Lo g istics–

of allocations
M e rch a n d ise re ce ivin g a n d

Marketing
Merchandise
ve rifica tio n . planning

S to re o p e ra tio n s – Space

Details of
p la n n in g , a vo id d u p lica tio n .

Store Operations
Space planning, Communication about new
products & their features,

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Process of merchandising planning.
 Developing a sales forecast –

 Determining the Merchandise


Requirement

 Merchandise Control

 Assortment Planning
Developing a sales forecast
 Reviewing past sales

 Economic conditions.

 Sales potential.

 Marketing strategies and Competition.

 Creating the sales forecast.

Determining the Merchandise
Requirement
 Merchandise Budget
 sales plan
 stock support plan
 Planned reductions
 Planned procurement
 Gross margin

 Assortment plan
 Product range and models.

 Process can be top down / bottom up


Merchandise classification
 fresh groceries
 Ready to eat snacks
 Addictives /spices/pickles.
 Personal hygiene products
 Cooking aids
 Necessities – pulse, sugar salt , oil ,
wheat floor.
 Soft drinks/ juices.

Merchandise hierarchy
 Company

 Department

 Merchandise classification
 Merchandise category

 Merchandise sub category

 Style price unit

 Stock keeping unit


Ready to eat
 Wafers , biscuits , chips, snacks.
 Salted , sweet - category

 Branded , local- sub category

 Pack size / price– 100 gm, 250 gm, 500


gm. – SPP.
 SKU
Types of merrchandise
 Staple/ basic-
 Fashion

 Seasonal

 Fad

 Style

ASSORTMENT

 Width

 Depth


MERCHANDISING PLANNING
01/04/10

Range plan with price points, briefing by Category manager to the team. Co-
ordination bt merchandiser

Fabric inputs with Prices, Design and Quality break-up (Fabric team, Garment
team, Merchandiser
Colour palette forecast, alongwith Theme forecast or selection (Fabric team,
Garment team, merchnadiser)

Fabric design (Fabric designer) Garment


Costing/ Approvals Styling
Delivery lead times Sampling
Packaging design
Garment costing

Product range presentations

Range approvals for styles & fabric

Order bookings

Raise purchase orders for fabrics & trims

Garment & packing specifications to be made

Handover complete specifications with fabric, trims to production dept 12


Process of merchandise planning

 Planned sales: Projected sales for the period


 Planned purchases: Projected purchases for the
period
 Planned reductions:
 Markdowns: Reduction in prices for Bad quality,
Competition, Trend change etc
 Employee discounts:
 Inventory shrinkage: Theft, pilferage
 Planned markups:
 Planned difference in selling and cost (It is not a gross
profit)
 Markup% = (Selling price – Cost price)/ Selling price
 Gross margin
 Gross margin = (Selling price – Cost price - 13
Reductions)
Merchandise CONTROL – open to buy

Adjusts merchandise buying
 Sales

 Reductions


Maintains stock and sale
relation.
 OTB = Planned EOM stock - projected
EOM stock
 Projected EOM stock = actual BOM stock + actual additions to
stock + actual on order - planned monthly sale – planned
Merchandise control- Advantages
 Limits over and under buying

 Prevents loss of sale – due to
unavailability.

 Maintains purchase within budget.

 Reduce markdowns – due to excessive
purchase.
ASSORTMENT PLANNING – types
The process of deciding and arriving at

the quantity of each product /category


of merchandise.
 Purchase quantity.

 Color , size , brand , material.

 Classics, Fashion, Seasonal, Fad, Style



The process of Merchandise Planning

M e n sw e a r DEPARTMENT

PRODUCT LINE
S h irts Tro u se rs a cce sso rie s

Louis Phillippe Arrow BREADTH


Z o d ia c V a n H e u se n

DEPTH
Style Color SIZE

17
Assortment planning
VEND STYL UNIT COST RETAIL PLANNED TOTA
OR E S S PRICE PURCHASE L
X C- X8 800 1200 JAN
15 FEB MAR 15 75
20 25
APR

Y F- 8 960 1350 10 25 10 65
XX 20

Z E- 6 900 1500 30 22 15 85
XL 18
RANGE PLAN - Balance
 Limits over and under buying.

 Sufficient choices for customers.


 Satisfactory product quantity available.


 Aestheticminimum – lower limit of


range width.

MODEL STOCK PLAN
 Preciseitems and quantity for
merchandise line.

 Identification of customer’s buying


decision

 Identification of levels under attributes.


 Allocationof total units respectively


based on demand.
MODEL STOCK PLAN - 100 sHIRTS
TYPE DRESS CASUAL FORMAL SPORT

% OF 10 40 20 30
SALES
SIZES SMALL MEDIUM LARGE X–
LARGE
% SALES 25 40 25 10

SLEEVE FULL HALF

LENGTH
% OF 30 70
SALES
TOOLS FOR MERCHANDISE PLANNING
 Marketmax

 MMS

 Retail– pro
 Ms- excel