Retail Merchandising Planning

Merchandising Planning

1. Retail Merchandise Planning By- Shahbaaz Ahmed PGFB1345

2. Introduction- Merchandise Management- Activities involved in acquiring particular goods and services and making them available at the places, times, prices and quantities that enable a retailer to reach its goals . Termed as the analysis, planning, acquisition, handling and control of merchandise investment of retail operation

3. ANALYSIS - Needs & wants of the target audience PLANNING F or future sale of merchandise ACQUISITION P rocurement from distributors and mfgs HANDLING M erchandise available at required store at right time and right condition CONTROL Amount of money spent on buying

4. Factors Affecting the Merchandising Function

5. Role of Merchandising Manager Planning : Policy formulation, forecasting sales for budget period, estimate consumer demand and impact of changes occurring in retail environment Directing : Guiding and training of buyers Co- ordinating : C oordinate buying effort of many buyers and fit into stores image Controlling : A ssessing buyers performance

6. Planning process- Analysis of consumers needs and wants, consumer buying process, sale of high selling products,interaction with sales staff ,analysis of external sources of information Steps : Developing a sales forecast Determining a merchandise requirements Merchandise Control- The Open to Buy Assortment Planning

7. 1. Developing a sales forecast- Forecasting involves what a consumers may do under a given set of conditions Determines the inventory need for the product or category Typically answer : How much, new products, price? Process : Reviewing past sales. Analysing the economic conditions . Analysing the sales potential The marketing strategy of the competitors. Creating the forecast .

8. 2. Determining a merchandise requirements Planning at Merchandise takes place at two levels: The creation of merchandise budget The assortment plan There are two methods of developing the merchandise plan Top down planning Bottom up planning

9. Merchandise Budget & Inventory Planning- Sales plan - product to be sold Stock Support plan - stock needed to achieve sales Planned reductions- for weak products Planned purchase level- Quantity to be procured Gross margins (of each department) Methods of Inventory planning- The Basic Stock Method The Percentage Variation Method The Stock / Sales Ratio Method Stock turn over Rate

10. The Basic Stock Method Basic Stock = Avg.stk for the season – Avg monthly sales for the season BOM(Beginning of month) Stock = Planned Monthly Sales + Basic Stock. The Percentage Variation Method- Used when the stock turnover rate is more than 6 times/year BOM stock = Avg stock for the season x ½ [1+planned sales for the month / Average Monthly Sales ] The Stock / Sales Ratio Method- Stock to Sales Ratio = Value of Inventory / Actual sales Planned BOM Inventory = Stock – Sales Ratio x Planned Sales Stock turn over Rate- Planned Sales (for a period)/ Planned average Inventory (for the period)

11. 3. Merchandise Control- Open to Buy Depends on the sales for the month & reductions, merchandise buying can be adjusted. Maintains relation between stock and sales Limits overbuying & under buying Prevents loss of sales due to unavailability of required stock Open to Buy = Planned EOM Stock – Projected EOM Stock

12. 4. Assortment Planning Selection of merchandise a retailer carries. Quality of the merchandise- expensive/moderately priced/inexpensive items Width of assortment : number of distinct goods and services (product lines) a retailer carries Depth of assortment : Refers to variety in any one goods /service category (product line) a retailer carries Store brands or National Brands

13. Depth & Breadth of merchandise DEPARTMENT PRODUCT LINE BREADTH DEPTH       STYLES COLOURS SIZES ZODIAC VAN HEUSEN LOUIS PHILLIPPE ARROW SHIRTS TROUSERS ACCESSORIES MENSWEAR

14. RETAIL ASSORTMENT STRATEGIES Wide & Deep : (many product lines & large variety in each ) Wide & Shallow : (many product lines & limited variety in each ) Narrow &Deep : (few product lines & large variety in each ) Narrow &Shallow : (few product lines & few variety in each)

15. Thank you