FASHION MERCHANDISING

Fashion Life Cycle  Five stage cycle Fashion Leadership Increasing social Visibility Conformity within and across social groups Social Saturation Decline and obsolescence .

Challenges of Fashion Retailing       Short product life cycles Broken (seasonal) product life cycles Symbolism of fashion purchases Identification of consumer fashion segments Developing assortment plans Retailer .supplier relationships .

display. and sell goods at retail stores. .a merchandise manager determined that more product would be sold by doing it. It's no accident that the ice-filled tubs of soda are sitting next to the cash register at the convenience store on a hot summer's day -.Merchandising management is the science of evaluating human behavior and buying habits in order to determine the best way to stock.

Fashion Industry.Levels of Merchandising  Retail Organization Merchandising Buying Agency Merchandising Export House Merchandising   .

 It is the internal planning that takes place within a retail organization in order ensure adequate amount of merchandise are on hand to be sold at prices that the consumers are willing to pay to ensure a profitable operation. It is the business that moves the world fashion from designers showroom to retail sales floor and into the hands of consumers. .What is Merchandising? IN RETAIL ORGANISATION Merchandising is a specialized management function within the fashion industry.

Fabric Dyeing and finishing The findings Sector ± range of products integral to apparel Sector such as trims and accessories The apparel Sector. Promote.develop manufacture and distribute Retail Sector ± Merchandise. Weaving or Knitting.Apparel Supply Chain      The Fiber Section ± Man Made or Synthetic Fibers The Textile Sector ± Yarn Preparation. Display and Sell products to customers .

Merchandising is not only able to adjust to market variations rapidly but is capable of actually anticipating and helping to create market changes. It pinpoints new opportunities for growth through self analysis and market research and promotes company¶s image and products. Merchandising function is more specific concerning itself with the development. execution and delivery of the product line with its close ties with the market it serves.Marketing Vs Merchandising Marketing function Focuses on broadly defining a company¶s market and characteristics. .

Merchandiser Merchandiser is a person who get converted inspiration into design . production. promotion and distribution of products in the fashion industry to meet the consumer needs and demands . use technology to conceptualize and address the planning .

involves 6 rights       Right Merchandise At Right Price At Right Time At Right Place In Right Quantity With Right Promotion Also to right customer. .Merchandising .

Right Time Much merchandise is seasonal in nature and must be on hand when it is most needed. Right Place The location of the merchandise is of prime importance since it decides the accessibility.Right Merchandise Retailers must fill their shelves with the merchandise that customer wants. .

Right Quantity A profitable balance between volume of sales and amount of inventory is the desired goal. Right Promotion Right balance between the investment and the appeal created for the customers . Right Price Merchandiser must arrive at a price that is high enough to give the store profit and yet low enough to meet the competition and customers expectations.

THE CARDINAL SIN OF FASHION MERCHANDISING IS TO BE OUT OF TREND .

Fashion is cyclical Customers make fashion Acceptance level of fashion vary Fashion depends on place and reflects lifestyle .MAIN PRINCIPLES AND DYNAMICS OF FASHION The constant in fashion is change Changes in fashion are gradual and evolutionary rather than revolutionary.

 It is the internal planning that takes place within a retail organization in order ensure adequate amount of merchandise are on hand to be sold at prices that the consumers are willing to pay to ensure a profitable operation. It is the business that moves the world fashion from designers showroom to retail sales floor and into the hands of consumers.What is Merchandising? IN RETAIL ORGANISATION Merchandising is a specialized management function within the fashion industry. .

how to best present those products to consumers. While retailers have traditionally engaged in the task of retail merchandising in a physical location. and determining what is a reasonable retail price for each unit sold. the Internet has now made it possible to apply these same basic principles in a virtual setting. Retail Merchandising is the process used in order to conduct retail sales. . As part of the process. the merchandiser pays close attention to the types of products offered for sale.

 . and displaying goods in a way that stimulates higher sales volume. and it is the merchandiser's task to present the product in a way that best captures consumers' attention and persuades them that the product will fulfill their needs and wants. Merchandising is a branch of marketing theory and practice concerned with maximizing product sales by designing. Merchandising employs a wealth of theories about consumer behavior to accomplish this. Merchandiser is the one that plans. design and make merchandising process works. The underlying assumption in merchandising is that consumers may have a general need for (or interest in) a certain class of product. pricing. packaging.

The entire process is guided by what the company perceives as a market need. how it will look. the merchandising function requires coordination of many areas of a business. production. conducted by firms that may be labeled merchandisers.MERCHANDISING AS A PROCESS. In order to complete this process. and warehousing/distribution. extending from an initial product idea to a finished product on display in a store. and most broadly. accounting. and so on . especially in retail settings. including marketing. merchandising is the process of bringing products successfully to market.  First. and this need will dictate whether there is will be one uniform product or many variations. some view merchandising as an entire set of economic activities. procurement. whether it will be produced seasonally or year round. In this sense.

BRIEF SURVEY OF THEORIES  A large body of theory and empirical evidence informs many merchandising decisions. . The factors that must be considered when developing a merchandising plan span from market research to consumer behavior to competitive intelligence.

. Product pricing is a good example of how many considerations can go into merchandising. Prices can be set in various ways to serve different objectives. with the ultimate goal usually being to maximize profitability.

in a practice known as price signaling. he or she tends to draw the conclusion that most things at the store are fairly priced. . supported by empirical research. The reasoning. such as milk. For instance. many grocery stores consciously price certain common staple items. if the consumer sees that the price of milk is low. In a retail setting. In other words. is that consumers see these staples as a bellwether for the overall value paradigm of that store. this often means taking a slim profit on certain items while taking a generous profit on others. at a very competitive low price.

even if a convenience store buys its milk at the same wholesale price as the grocery store. The retailer's hope. it generally doesn't need to practice the same type of price signaling. . This is because its customers implicitly derive their value from convenience and are willing to pay more at the register for this convenience. In contrast. is that while the customer is there to get milk. however. he or she will also purchase any number of other items²which tend to be more prominently displayed²that carry a higher price margin.

 Fashion Merchandising is the combination of the processes that a new fashion item must go through to be available in mass quantities to the consumer after it is left the hands of the designer. Fashion merchandising often gets confused with fashion marketing and although they work together. they are two very different things. buying. it is important to examine the role that fashion merchandising plays in manufacturing. . promoting and selling fashion items. To understand fashion merchandising completely.

 In regards to manufacturing. a fashion merchandiser will take a designer¶s piece and find the best way to manufacture the item while taking things like price and target market into consideration . a fashion merchandiser will have significant input on the types of fabrics used to make a piece of clothing. By applying their knowledge about fabric and clothing construction. help change a designer¶s vision into reality. Having a strong historical and socio-cultural understanding of the fabrics.

A fashion merchandiser working with a designer will once again offer expertise to the designer on textiles and fabrics . A fashion merchandiser must be aware of the target market for the fashion item and also very wellversed in fashion trend analysis and forecasting.  Buying becomes part of fashion merchandising when a merchandiser buys fashion items to be presented in a store. This allows for more accurate ordering.

Again the merchandiser must have an idea about forecasting and Market Trends so they may give their recommendation regarding production of the item. Creativity is important. . The final component of fashion merchandising is selling. When a fashion merchandiser works for a retail store. who then sells to consumers. because a merchandiser must offer suggestions on how to display the items within the store. A fashion merchandiser that works with a designer is responsible for selling fashion items to stores. responsibilities include buying and presenting fashion items within the store.

promoting the designer¶s product to stores that may want to buy large quantities is a number one priority. production skills must be sharp as well. Not only is a fashion merchandiser required to have a creative mind and strong visual merchandising skills. department stores or discount retailers. fashion merchandisers seek out the target market for a designer¶s clothing. .  Since a fashion merchandiser is working for the designer. such as children¶s clothing stores. Fashion merchandising promotes a designer¶s items through the use of fashion shows where creativity and visual effects must run wild to capture the attention of potential buyers. Additionally.

INTERPRETING CONSUMER DEMAND .

Elements of Customer Demand TARGET MARKET BUYING MOTIVATIONS .

Identifying Target Market Demographic Behavioral Market Segmentation Psychographic Geographic .

Demographic Segmentation
Mainly grouped on the basis of: Population  Age  Income  Sex  Occupation  Education

Geographic Segmentation
Mainly grouped on the basis of: Cities  States  Regions Climate plays an important role

Psychographic Segmentation
Grouped on the basis of the lifestyle   

Social activities Interests leisure pursuits needs and wants

People having similar lifestyles can make up a target market group.

. Help in improving the service/product and make it different from others.Behavioral Segmentation Grouped on the basis of opinion on specific products or services Rating of usage of products & services.

DETERMINIG WHY CUSTOMERS BUY BUYING MOTIVATIONS RATIONAL MOTIVATIONS ‡Durability ‡Dependability ‡Comfort ‡Economy of Operation ‡Price EMOTIONAL MOTIVATIONS ‡Imitation ‡Emulation ‡Prestige ‡Pride of Appearance ‡Distinctiveness .

stitching.construction.FASHION PURCHASES SPECIFIC SELECTION FACTORS Silhouette. Decoration or trim. Hand feel Color-Actual hues used Workmanship.Degree to which an item is considered moderate or extreme in form in relation to the currently popular shape or form of such products.Texture.Presence or absence of all types of ornamentation Material/Fabric-Quality of fabric Surface interest. finishing .

Value placed by individual customer . Taste.Size. Ease and cost of care Brand.Identity of manufacturer or distributor of an item Utility. Smell.Preciseness of Fit Sensory factors.Touch.Extent of usefulness and service Appropriateness-Degree of suitability and acceptability Price. etc.

FASHION RETAIL ORGANISATIONS Organizational Structure & Responsibility .

.Organizational structure includes the clear understanding of the authority and responsibility for each job to be done. Organizational system differs with the difference in type of merchandise. and target customer. size of retail firm.

Discount Store are also few of the other formats .Unit Store  The Departmentalized Store  The Chain Store The Specialty Store.Various Fashion Retail Businesses Three basic Formats The Small Single.

   . selling. merchandise planning and control.maintenance of facilities. fashion coordination Sales and promotion division. special events. visual merchandising. stores and merchandise protection.Major Divisions & Responsibilities  Merchandising division.advertising.credit. publicity and public relations Finance and control division. and inventory control. customer service and receiving and marking of merchandise. account payable. personnel. o Personnel and Branch Store Division may function separately if the store operations are very large. Operational division.buying.

Stock holders Board of Directors President STAFF Legal counsel research department Vice President and General Manager STAFF Other advisory services Merchandising division GMM Sales Promotion Division Sales Promotion Manager Finance and Control Division Treasurer & Controller -ACCOUNTING OFFICE -a/c payable -cash office -general a/cing -inventory taking -insurance & taxes -payroll office -sales audit -statistical -CREDIT OFFICE -billing customers -cashiers in office -charge a/cs -charge authorization -credit interviewers -defered payments -CREDIT UNION -EXPENSE CONTROL -LAYA AY OFFICE -MERCHANDISE STATISTICS Operating Division Store Superintendent Personnel Division Branch stores Personnel Director Executive in charge of branches -ADVERTISING -BUYING OFFICES -COMPARISON BUREAU DEPARTMENT -DIVISIONAL MANAGERS -artists -copywriters -department managers -direct mail -assistant buyers -layout -sales people -radio & television -FASHION -DISPLAY DEPT. .ORKROMS -Audit -credit -store planning -maintenance -receiving -transfer of merchandise -employment training -merchandising -sales planning -advertising -displays -special events -liaison with main store . -on the job -RECEIVING & MARKING .ELFARE & HEALTH -RESTAURANTS -STORE PROTECTION -TRAFFIC DEPT. COORDINATORS -Interior displays -HOME PLANNING -sign room BUREAU -window displays -MERCHANDISE PLANNING & CONTROL -exterior displays -PUBLIC RELATIONS -MERCHANDISE -news releases RESEARCH -public fashion shows -special events -use of auditoria -ADJUSTMENTS -EMPLOYMENT OFFICE -ARCHITECT¶S OFFICE -interviewing -CUSTOMER SERVICE -placement -sales people -termination -service desk -HOUSE ORGAN -telephone & mail orders -PERSONNEL BUDGETS -bridal registry -PERSONNEL TESTING -DELIVERY -RECORDS & REVIE S -ELEVATORS -budgets & records -MAIL DIVISION -job analysis -MAINTENANCE -rating & reviews -PACKING & PICK UP -TRAINING -PRINTING -induction & system -PURCHASING DEPT.AREHOUSE .

The Merchandising Division General Merchandise Manager (GMM) Divisional Merchandise Manager (DMM) Soft Line Hard Line Merchandise Managers (MM) Buyers Assistant Buyers Trainees .

Qualities of a Fashion Buyer       Dedication Enthusiasm Awareness Stamina Foresight Creativity       Product Knowledge Decision-making skill Mathematical ability Communication skills Negotiation skills Managerial skills .

Work Area of a Fashion Buyer   Liaising with suppliers (immediate vendor) Liaising with internal departments Buying Colleagues Quality Control/Tech Buyer Design Finance Marketing/PR Fabric technology Retail Sales people .

THE BUYER¶S JOB Planning  Buying  Selling  .

Preparation of 6 months buying plan with knowledge of fashion trends.Planning  Based on 2 factors -How much the store expects to sell? -How much inventory is needed to achieve that sales goal? The buyer must plans stocks so that the store image is reflected in the merchandise. other records of the past seasons.     . Flexibility is the most important factor to be kept in mind. economic factors. Includes provision for constant adjustment to actual results. market conditions.

Buying  Adequately stocking the department¶s price lines and securing the best possible mark ups on all purchases. Establishing and maintaining effective buying relationships with vendors.   . Supervising the physical inventory or stock counts to verify the accuracy of stock records.

Selling  Communication and promotional activities. Determining the selling features of the merchandise for promotion purposes and the timing of these promotions.  .

What is the difference between Buyer & Merchandiser ? .

.The buyer¶s role in USA includes the administrative and financial input part also besides core buying responsibility. Job Details for both these profiles are different with different organizations and are quite overlapping but all fashion buyers are responsible for overseeing the development of range of products aimed at a specific type of customer and price bracket. Buying is perceived as central role and merchandising as parallel department to buying. whereas in many companies in UK. In USA buying is often a subdivision of the merchandising team.

BUYING PATTERNS .

CENTRAL BUYING The centralization of all buying activities from a central headquarters with the authority and responsibility for the selection and purchase of merchandise limited to buyers of particular merchandise categories .

Three Forms of Central Buying    The central merchandise plan The warehouse and requisition plan The price agreement plan .

. pricing.The central merchandise plan   Central buying assumes complete authority for buying the assortment of goods. Buyer has an opportunity to check the goods to be sure they have been shipped as ordered. warehousing and distribution to the many stores. Central make their purchases and have the merchandise delivered to the warehouse.

 Goods are inspected before delivery. DISADVANTAGES Adjustment to local conditions is difficult  Cooperation may be lacking  An enthusiastic selling force may be lacking .The central merchandise plan ADVANTAGES It provides a steady flow of merchandise provides for specialists in each merchandise category.  It allows better stock control.

The store manager has the responsibility for ordering enough merchandise to carry the store through the buying season. The store manager is provided a list of the stock that is inventoried in the warehouse where the central buyer will see it is properly filled. Used for staple goods.   .The warehouse and requisition plan  The central buyer arranges for the initial assortment and has the merchandise shipped to the individual stores.

 Poor warehouse control may lead to an imbalance in store inventory. .The warehouse and requisition plan ADVANTAGES Gives the store manger some responsibility in merchandise selection.  Reorders or fill-ins are usually filled promptly. DISADVANTAGES There is little control over the composition of the merchandise selection.

style and assortment of staple types of merchandise as well as the terms of shipping. keeping the store catalog up to date.    . color. adding new items. The store manager has complete authority for the composition of the stock and orders can be placed directly with the vendors concerned. size. canceling old items. The central buyer is responsible for prearranging the minimum amount of goods to be purchased by the entire chain.The price agreement plan  Central buyer working with vendors and manufacturers will agree on the retail price. The merchandise is illustrated and described adequately in catalog to be given to store manager.

.  Reduces the expense of warehouse and the necessity of keeping detailed records of each unit. DISADVANTAGES Problems arise with tardy deliveries and with high transportation cost.The price agreement plan ADVANTAGES It develops a feeling of responsibility on the part of the store manager.

THE PLANNING & CONTROL FUNCTIONS THE DOLLAR MERCHANDISE PLAN .

To earn profit .Objectives 1.To satisfy the needs and wants of customer 2.

Planning for the profit
Major goals of planning in retail merchandising are: 1. to maintain an inventory enough meet the anticipated customer demand. 2. to time the delivery of purchase so that merchandise is available for sale for customer demand. 3. to keep purchases in line with the store¶s ability to pay for them. 4. to have funds available for the purchase of new goods when needed. Dollar merchandise plan: it is the specific budget that the buyer uses to project both, sales goals and the amount of stock that is required to achieve the goals.

Earning a profit 

Net sales are all of the sales that have been made minus µcustomer returns and allowances¶. Cost of goods sold is the amount the buyer has paid for the merchandise that the store has held for that same time period. Gross margin is the margin of dollars between what the merchandise cost and what it was sold for. Expenses is the amount of money spent to run the business. It includes salaries, advertising, rent, heat and light. Profit-the amount of money that is left over after all of the merchandise that is offered for sale has been sold and all of the expenses of running the business have been paid.    

Earning a profit
Net sales ± cost of goods sold = gross margin expenses $ 70,000 ± 42,000 28,000 24,000 % 100 ± 60 40 ±34.3

-

= profit

4,000

5.7

µNet sales ± cost of goods sold = gross margin¶ µGross margin ± expenses = profit¶

transfers. markdowns. . and return-to-vendor. In this system. purchases. such as sales.Use of retail figures Majority of departments and stores operate under the accounting system known as retail method of inventory. all transactions affecting the store¶s inventory. are recorded at their retail prices.

Feb.PERIOD OF PLAN The period plan may vary for a month to an year.August. The usual planning is of six months.January ..   The Spring Season.July The Fall Season.

not by the departmental buyers The buyers then using the planning form and his knowledge of market conditions. trends. stocks. and purchases for his department for the upcoming season. markdowns. prepare figures on anticipated sales. These goals are established by the store management. and demand cycles.Procedures for Preparing the plan The store¶s accounting department supplies the buyer with a planning form several months in advance of the start of the actual buying season On it are figures of the same department¶s merchandising operations during the same season last year. .

All the plans are reviewed by both. . The merchandise manager then consolidates all the plans made by the buyers of the same division into a divisional plan and submits it to the general merchandise manager. when approved. the store¶s controller and the general manager or president.The plan made by the buyer is then reviewed by his divisional merchandise manager. departmental plans are combined into a master plan for the whole store.

study general fashion trends that may influence the department¶s sales.Steps of dollar merchandise planning 1.95% in sales than an increase from $ 24. examine external internal factors that may effect sales. it is easier to understand the increase of 4. These estimated plans are then broken down into sales goals for each of the months.400) . Reviews past sales figures. (Ability to work with % is helpful tool.PLANNING SALES:    The buyer makes a realistic estimate of prospective sales during the upcoming season.200 to$ 25.

In order to support planned sales. interesting merchandise assured throughout the month. PLANNING STOCK To estimate the amount of stock that will be needed to support the planned monthly sales . Considerations influencing the planning of BOM stocks : There must be adequate opening assortment on hand in sufficient quantity to meet anticipated consumer demand until stock replacements for goods sold can be secured. . and a steady flow of new. markdowns minimized. The planning must be such that the desired seasonal stock turnover may be realized .2. a Beginning of Month (BOM) has to be estimated.

MARKDOWNS can be used as tool of reducing inventory as the season ends. . sizes and colors when the public is in the mood to buy. Similarly BOM stock plans should be reduced as a selling season approaches its close or demand decreases.Variations in monthly stock goals In planning monthly stock goals stocks should be bought to a peak just prior to the time when sales are expected to reach their peak By peaking stocks before consumer demand reaches its crest the buyer will be able to present maximum assortments in needed styles.

) . It is also higher in departments featuring lower price ranges than in those featuring higher price ranges. Monthly stock sales ratio The monthly stock-sales ratio uses the no.Stock-sales relationships Stores are guided by two stock-sales relationships: 1. Stock-sales ratio = $ BOM stock / $ Planned Sales for month 2.It also directly relates stock requirements to the planned sales. of months that would be required to dispose of a BOM inventory at the planned rate of sales for the month. of times that an average stock of merchandise has been turned into sales in any given period . Rate of stock turnover Refers to the no. Stock turnover = $ net sales / $ average inventory (In general the rate of stock turnover is higher in women¶s apparel than in men¶s clothing or home furnishings.

What is Average Inventory How to calculate average inventory for February to July Season. BOM stocks of February till July + EOM Stock of July / 7 =Average Inventory .

.

3. The chief factors to be considered in establishing seasonal markdown goals are: the past experience of the store or department comparative figures of similar stores amount of the old stock on hand at the beginning of a new season Markdown % is the amount of dollar markdowns taken during a given period expressed as % of the net sales Markdown % = $ markdown / $ net sales . PLANNING MARKDOWNS Markdowns are usually planned as a percentage of each season¶s planned sales. They may then be allotted to individual months. according to the buyer¶s estimates of when and to what extent the monthly markdowns are going to be needed to sell the goods.

The planned purchase includes Planned EOM stock + planned sales + planned markdowns = total needs for the month .BOM stock . In most of the large stores . Planned purchase = total needs for the month .4.purchases are planned on monthly basis. PLANNING PURCHASES Planned purchases means the amount of money buyer can spend on merchandise during a given period without exceeding the value of the inventory planned to be on hand at the end of that period.

Important elements are as follows: ‡initial markup ‡gross margins ‡cash discounts earned as percentages of purchase on sales ‡rate of stock turnover ‡shortage reserves ‡operating expenses . particularly large departmentalized stores . expand budgeting procedures beyond the four basic elements .SUPPLEMENTAL ELEMENTS RELATING TO DOLLAR MERCHANDISING PLANNING Many retail stores .

no less or no higher. Retail stores plan initial markup percentages to ensure that the income derived from sales will be adequate to cover : ‡ all expenses incurred in the operation of the business ‡ anticipated reductions in the retail value of the inventory . .Markup: Markup is the difference between the cost price and the retail price of the merchandise. such as mark downs . and employee discounts ‡ a reasonable margin of profit for the store The planned markup should be aimed at achieving the goal figure indicated on the dollar merchandise plan. stock shortages. Retail markup % = $ retail .$ cost / $ retail The dollar difference between the delivered cost of the merchandise and the retail price placed on it when it is first brought into stock is called initial markup.

NET COST OF MERCHANDISE SOLD $Gross Margin / Net Sales = %Gross Margin . GROSS MARGIN = NET SALES .Gross margin: Gross margin represents the amount of money left from sales income after deducting the total cost of merchandise sold during that given period. It also indicates the amount of money available to pay all operating expenses and taxes with a reasonable profit left over.

Terms of sale: The combination of allowable discounts on purchases and the time allowed for taking such discounts is referred to as terms of sales. Such discounts are allowed to encourage to the prompt payments of the invoices. because they reduce the actual cost of merchandise purchases. It is an additional income for a store . Cash discounts increase gross margin.Cash discounts: Cash discounts are the percentages or premiums allowed by manufacturers off their invoices if payment of the invoice is made within a certain specific period of time. .

When the book inventory is greater than the physical inventory there is said to be stock shortage. When the physical inventory is greater than the book inventory there is said to be stock overage. .Stock shortages: Stock shortages or overages represent the dollar difference between the book inventory ( the value of inventory on hand as indicated by the stores accounting records) and the physical inventory ( the value determined by taking a physical count ).

THE BUYING CYCLE .

What is Buying cycle? The key events and process in which the fashion buyer is involved in order to buy a garment range. .

July Autumn/Winter. Spring/Summer.Fashion Industry traditionally splits the year into two main seasons.February. . The occurrence and the names of sub seasons vary from company to company.August ± January The competitive and constantly changing fashion business requires a more frequent introduction to merchandise. resulting in most stores introducing new ranges many times in between these two main seasons.

End Mar Beg Apr.Mid Apr Mid Apr-End May Mid May to Mid July Mid July to Beg Aug Mid July to End Aug Beg Aug -End Sept Beg Oct -Mid Nov Mid Oct-Mid Nov Mid Nov-Beg Jan Beg Jan .Mid Jan 6 Weeks 8 Weeks 2 Weeks 6 Weeks 8 Weeks 2 Weeks 6 Weeks 8 Weeks 6 Weeks 3 Weeks 6 Weeks 2 Weeks Four distinct and two promotional season within each half of annual retailing Period .Seasons Spring Transition Spring Spring promo Summer 1 Summer 2 Summer Sale Autumn Transition Autumn Winter 1 Winter Festive/Holiday Winter 2 /Christmas Winter Sale Approximate Durations (with overlaps) Mid Jan-End Feb Beg Feb .

Various ranges introduced within the season.  .Ranges which bridge the gap between one season and the next season. TRANSITIONALS. PHASES.

The Buying Cycle Review of current Season¶s sales Budget Planning Comparative Shopping Directional Shopping Sourcing for product development .

The Buying Cycle (Contd«) Range planning Garment samples sourcing for range Pre Selection of garment samples Price negotiation with suppliers Final Range Selection .

The Buying Cycle (Contd«) Placing orders for ranges Pre production sampling & approvals Bulk garment manufacturing Delivery of products to the retailer Purchase by customer Review of current season¶s sales .

Comparative ShoppingOften referred as comp. shop Undertaken at the beginning of each season and continues with once a month visit Byers & Designers are involved Starts with the looking at current merchandise in the stores of competitors which sell comparable ranges Report will be produced with few sketches & information grid Analysis of missing important trends in own range .

colors and fabric for ref.Directional ShoppingTerm used for trips to gain inspiration for design concepts Trips depend upon the buyer¶s product range & travel budget Buyer may visit designer RTW ranges to mass market ranges Makes note on key shapes. . details. Buyers usually have budget to buy samples which are referred as bought samples Designers may share responsibility of directional shopping with buyers.

Participants are the Design. Range is reviewed vis a vis:     Styling. Price and Delivery Sourcing strategy regarding product and Supplier base. Marketing. Merchandising and QC teams. Garments samples featuring on the Range plan are presented.Pre selection  Time after the Range planning stage at the Buyers¶ end can be in form of the Line review/Range review meeting. Colors . .

Request for additional samples if required for the final range review meeting by the buyer. Involves: y y y y y y Informing suppliers regarding the styles which have been included in the final Range. prices for the Final Range. Styles dropped. . Change in styles if any.Period after Line/ Range review   Finalization of the Styles . suppliers. Price re-negotiations Order Delivery dates re-negotiations.

These may be generated by the Merchandising department or by a separate Purchase department. orders are placed with the suppliers in form of sending Purchase orders /Purchase sheets for each individual items selected to be on the range.Final Order Placement After the Final Range Selection meeting. .

By virtue of the T&A the various activities involved in the Product development/Production processes and the responsible party is fixed .Critical path/Time and Action Calendar for the buyer The key activities and the timelines associated with them. for processes like product development and production of any item forms the critical path or the Time and Action calendar.

Style Description Supplier & Country of Origin Lab dip/strike off approval Trim approval Fitting Sample approval Size set approval Bulk fabric & trim approval Pre production sample approval Bulk production Ex factory Due in warehouse . production & delivery (Time & Action Calendar) Style no.Critical paths for product development.

MANAGING MERCHANDISE ASSORTMENT .

. A merchandise assortment is usually grouped together in one selling area of the store. classified by size.  A balance assortment is in which types.MERCHANDISE ASSORTMENT refers to a collection of varied types of related merchandise that are intended for the same general use. type.  It Assortment plan is a compressive and detailed listing of all the merchandise that will carry in stock during a given period. quantities. and price line. and price lines of merchandise in inventory closely match the demand of your target customers.

DEVELOPING TAILOR MADE CLASSIFICATION SYSTEM
To evaluate the classification system according to the department buyer and customer needs we discuss below  the purpose of classification, 

explanation for the setup classifications where there is no existing system. Examining how the classifications of a fashion department is unique. 

PURPOSE OF CLASSIFICATION
CLASSIFICATION is : An assortment of units or items of merchandise which are all reasonably substitutable for each other REGARDLESS of who made the item, the material which it is made, or the part of the store in which it offered for sale. REASONS FOR SUBDIVIDING MERCHANDISE INTO CLASSIFICATION 


To precisely define the NATURE and extent of customer demand so that merchandise is readily available to satisfy that demand. It provides with a means of better PLANNING and CONTROL of the merchandising operation.

ESTABLISHING CLASSIFICATIONS AND SUBCLASSIFICATIONS 

Begin the process of setting one up by listing every item at every price line that is currently in stock and also those which were in stock during the preceding 12 months. 

Next sort out the listed items by classification or end use. 

After one has established broad classifications on the basis of END USE and non substitutability, one continues to set up sub classifications.

usually a number. each classification and sub classification is assigned a permanent identification code. Duplication of merchandise has been minimized. if not prevented.  All price lines within departments price range are represented in the assortment plan The best selling price lines are appropriately represented with the widest variety of types. The code of classification consists of a fixed range of consecutive numbers. materials and sizes. . For merchandise planning and control purposes. each sub classification is assigned a specific range of numbers within the wider range assigned to the broad classification. colours.

³DOES THE SYSTEM REFLECT THE WAY IN WHICH THE CUSTOMERS BUY MERCHANDISE?´ .

CK etc would be in the same sub classification.then you make classification of all pants together and under it sub classification of all wool pants.TAILORING THE CLASSIFICATION SYSTEM  If majority of your Customers ask for merchandise by COLOUR .  HOWEVER   EXAMPLE: If customers look for Calvin Klein pants in size 10. And DKNY pants into another . FABRIC.and all other pants into another. CONCLUSION: All CK pants would be in one SUB classification. . IF    EXAMPLE: if customers look for blue wool pants in size 10. CONCLUSION: DNKY. and SIZE you can put the store brand merchandise together with that of a number of different DESIGNERS within the same SUB CLASSIFICTAIONS.

APPAREL SOURCING .

Suppliers of Fashion Goods Suppliers of Fashion Goods Suppliers from Domestic Market Suppliers from Foreign Markets Local Manufacturers Importer wholesaler Exporter Foreign selling agents Resident buying Office Import trade fairs Buying trips abroad to market & Manufacturers Foreign Buying Office Foreign trade fairs .

Advantages of Domestic Manufacturers         Delivery Proven specification Availability of merchandise in selected quantities Availability of reorder Very close control on the merchandise planning and production Accommodation of changes due to any reason is easy Planning and control of stock relatively easy Permit the stock adjustment to new trends .

BUYING FOREIGN MERCHANDISE .

Objectives Of Foreign Buying Prestige.image store & Uniqueness Better quality Lower cost Specification buying .

Foreign Buying Problems Variation of quality standards Deliveries and reorders Size discrepancy Monetary problems Time involved Other conditions .

g.Other Problems  Language Barriers Unethical practices (e. Child Labor) Political unrest   .

Methods Of Buying Foreign Merchandise Domestic sources Domestic importers Resident buying office Foreign selling agents Import trade fairs Foreign sources Liaison Offices Foreign buying offices Direct Exporters .

Domestic Importers/Wholesalers          Stockers of foreign merchandise Prove to be more useful for smaller stores Goods can be bought closer to the time of need Risk involved lies with the importer Costs higher than direct buying Offers less exclusivity No concessions are offered Very small qty. Sells through showrooms or directly from warehouse . of merchandise can also be purchased.

Resident Buying Office (RBO)         RBO situated in the same place where the retailers are. RBO has many retailers as their members. RBO also offers trend inputs in forms of periodicals and catalogues to the members. Goods are sourced keeping the member stores and their target customers in mind. . Commitments must be made far in advance of the selling season Risk & problems of off shore sourcing are managed by RBO. The orders can be large or small as they can absorb Group purchasing plan is also offered which lowers the cost for the participants.

They make periodic trips abroad to be up to date with the foreign market developments. Foreign selling agents     . Orders need not be large as many orders are compiled together before sending No guarantee of quality standards. They are a group of foreign manufacturers who may or may not carry stock in the importing country. Buyer can actually see the merchandise with the styling and uniqueness. size discrepancies etc.

Import Trade Fairs ‡ Fairs organized in the importing countries with the goods from the exporting countries ‡ Some trade fairs feature the fashion merchandise of only one country. because of space limitations .most manufacturers can only show a small portion of what they can manufacture. ‡ Although there is an advantage in being able to view so many lines in one place. . such as Italian Donna Moda.

NIKE .LIAISON OFFICE ‡ Store owned foreign buying offices ‡ Located in major fashion centers & in exporting bases of the world ‡ Advise buyers about new trends ‡ Accompany buyers on their market visits acting as interpreters and planning market itineraries ‡ Because of their broad & strong base in the local market they get the best resources according to the need of the buyer ‡ Function as a follow up service to ensure prompt delivery and quality control ‡ Each liaison office works as a separate profit centre ‡ Types of stores that have such offices are ± GAP.

        Generally located in a major city of the foreign buying area and facilitates indirect exporting They are independent buying agencies and are also known as Foreign Commissionaires They work for many buyers/retailers They often organize buyer manufacturer meet in their offices and also take the buyers to visit manufacturer's¶ facilities. They do not make purchases for the client unless authorized to do so The client pays them fee usually a percentage of the first cost They then follow up to make sure the delivery is made on time and the quality is checked Foreign Buying Offices . They must have very strong vendor base with them.

Direct Exporters      The manufacturer. Cost of establishing another market may overweigh the monetary benefits of direct exporting The exporter may be exposed to more direct risks. Increases its profit margin by saving on payments to an intermediary Develops a closer relationship with the overseas buyer. .exporter undertakes the entire export process.

MERCHANDISING RESPONSIBILITIES IN BUYING & EXPORT HOUSES .

. delivery schedules.Export House        Coordinator of all activities at the manufacturer's end Correspondence with buying Agencies Could be handling many buyers at a time Takes care of PD. regular follow up. fabric and trim orders. negotiations. Sources of information are limited as compared to buying house merchandiser Is directly responsible for the merchandise Ensuring inspections and quality levels. costing. sampling. production planning.

sampling. production planning Responsible for vendor selection and development . costings.PD.delivery schedules. negotiations.Buying House      Could be looking after one account/ one division of a buyer but many vendors Product exposure is much more Depends for all information on vendors Are responsible for.

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