FASHION MERCHANDISING

LESSON 2:

MERCHANDISING TERMINOLOGY

MARKETING VS MERCHANDISING
 LEARNING OUTCOMES

• TO PROPERLY LEARN TO DEFINE AND

UNDERSTAND BASIC MERCHANDISING
CONCEPTS AND TERMINOLOGY

• UNDERSTAND THE DIFFERENCE BETWEEN

MARKETING AND MERCHANDISING
 Merchandising or Marketing??
Remember.. The root word of
“Merchandising” is “Merchandise”.

Merchandise= Product

Therefore, Merchandising has

everything to do with
PRODUCT
 Merchandising or Marketing??

Merchandising is used in different areas (e.g.):

• Design
• Sales and Planning (Wholesale Merchandise Planning,
Retail Merchandise Planning and Store Buyers)
• Visual

The purpose of merchandising is to create a complete

customer experience… to show them a cohesive
presentation of that product.
 Merchandising or Marketing?
Merchandisers (on the wholesale side) …

• Work with design teams to coordinate colors palettes

and fabrics per season/group
• Work with design and sales to coordinate how many
styles are presented and offered in each season per
group
• Work with design and sales to decide product
classification ratios (e.g. how many tops to bottoms will
be incorporated in each season per group)
• Work with sales to determine wholesale and retail costs
per style/item to ensure corporate mark ups are met and
pricing is consistent (e.g. with brand and the market)
 Merchandising or Marketing?
Merchandisers (on the retail side) …
• Work with wholesalers to determine their monthly/
quarterly and yearly plans (e.g. their budget- how much
$ they are allowed to spend on your line!)

• Determine the ratio of product categories they will carry

in their stores (e.g. total quantity, then by “door”)

• Work with wholesalers to determine wholesale and

retail costs per style/item to ensure pricing is consistent
(e.g. with brand and the market) and work out any
promotional incentives

• Work with wholesale team to determine ad budget

 Merchandising or Marketing?
Once final buys are made on that season’s line both
wholesale and retail are involved in:

• Revising and Finalizing their plans (based on current

selling trends)

• Revising and Finalizing advertising/marketing budgets

and plans for promotion strategies ( including
cooperative advertising, in store sales promotions, etc)

• Visual Merchandising (Fixtures, T- Stands, Signage, etc)

 Merchandising or Marketing?
Merchandising has to do with PRODUCT.
But it also has a lot more to do with NUMBERS and SALES
than you may think!

Most merchandisers (on both the wholesale and retail end)

spend just as much time working out pricing, costs, sales
(losses and profits) than they do putting together their
ASSORTMENT.

The entire reason merchandising is about product and

creating that customer experience….. Is so that the
product assortment is put together in an attractive way
making it ….. SALEABLE!!!!!!
 Merchandising or Marketing?
So…
Now that you have a better understanding of
merchandising……

You are all Fashion Marketing students….

What is the difference between Merchandising and

Marketing???

What is Marketing??
 Merchandising or Marketing?

Merchandising and Marketing work very closely together.

Once clear form of marketing a product is in the PRODUCT

ITSELF!

The product itself is a marketing tool… but– products don’t

sell themselves.

We need all forms of marketing efforts (advertising, PR,

Promotions, Events, On Line, etc) to ensure we all reach
our common goal…. SELL SELL SELL.
 Terminology

We’ve thrown out some words today that

you may or may not be familiar with, let’s
review them and include a few others
 Terminology

• Product Line: Line created and styled for

wholesale presentation several times a year
(market week).
Usually refers to moderate or better price points
(“Collection” is the same as a “Line” but refers to
high fashion/designer product line)

• Fashion Week/Market Week: industry event

when designers or apparel brands show next
season’s line to their buyers.
 Terminology
Product Lines are by season and divided in
to groups (usually by color story and
delivery month)
Example: Spring 2010 (PRODUCT LINE)
February (Group 1- DELIVERY 1)
March (Group 2- DELIVERY 2)
April (Group 3- DELIVERY 3)

Each month is a delivery or group within

each season’s (product) line.
 Terminology
Each style is assigned a style number used to
identify each style on the line (e.g. style number
for this jacket is # UD164C071).

This identification number is used for

manufacturing, ordering, inventorying and
selling purposes.
 Terminology
• (Wholesale) Assortment: Number of different product items (or styles) the wholesaler
will manufacture that make up the product line.

• Mark -Up- The difference between the cost price added to calculate the selling price
(e.g. cost is $8, selling price is $10, mark up is $2)

• (Retail) Assortment: Number of different product items (or styles) the retailer stocks
within a particular product line (the selection of items chosen from that particular line)

• (Retail) Assortment Plan (or “Buy” Plan): Aligns the product assortment with the
buyers financial goals.
•
• Open to Buy (OTB): the dollar amount budgeted for a retail buyer for inventory
purchases for a specific time period. (Once the buyer has made their assortment plan,
they can figure out what they are still allowed to buy based on their OTB)

• Door: refers to a specific store location for a retailer. (e.g. the Sephora “door” on Huai
Hai Lu showed a 10% increase in sales last month).
 Buyer for a day!

You are a buyer of ladies’ suits.

It is market week (spring 2011) and you are currently
working in the showroom preparing your assortment.

Based on your open-to-buy, you need to buy 4-6 six styles

for February delivery….
 Buyer for a day!
These are the styles being offered for this group
Which group looks more cohesive or
appealing? #1
Which group looks more cohesive or
appealing? #2
Which group looks more cohesive or
appealing? #3