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,

4
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
04/21/11

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
Menswear DEPARTMENT

Shirts Trousers accessories PRODUCT LINE

Zodiac Van Heusen Louis Phillippe Arrow BREADTH

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