DEVISING MERCHANDISE PLANS FOR RETAILERS

Devising Merchandise Plans for Retailers



Devising Merchandise Plans for Retailers

Introduction

The most successful and endearing icon of U.S. consumerism from the late nineteenth century to the mid-twentieth century was the Sears, Roebuck & Co. catalogue. Known affectionately as “the Wishbook,” “Mr. Sears's Catalogue,” and “the Farmer's Bible,” the catalogue offered shoppers, especially in rural areas, a delightful and unprecedented cornucopia of consumer goods and a source of wonderment. This remarkable marketing tool revolutionized shopping and merchandising and in the process homogenized and democratized the market, making Sears the world's largest merchandising corporation. Indeed, every company today—including those on the Internet, the latest incarnation of catalogue shopping—that uses mail-order catalogue sales (which reached $110.2 billion in the United States in 2000) benefits from the model and trust established by Sears. At its core, the Sears catalogue helped people obtain the “good life”—making life easier, more pleasant, even fun—and acquire consumer goods at a good price. This paper devise merchandize plan for retailer in a concise and comprehensive way.

Devising Merchandise Plans for Retailers

Core shops are being buffeted by many changes in the retail climate today. Much of what is affecting retailers is beyond our control. We can't control competition, unemployment, the weather, and surf or snow conditions just as we can't control the tightening of credit from vendors, the banking community, or the fact that big-box stores are now in the action-sports market. Success will always depend on understanding the factors over which we have dominion, or at least influence, studying them, and making wise choices. One area for improvement for all retailers is the constant improvement of merchandise plans.

Waste In Retail Can No Longer Be Tolerated

Poor merchandise plans equal squandering cash, which can no longer be tolerated. With fewer customers in the marketplace, sales are too hard to get and margins are too tight (especially in hardgoods) to allow wasteful uses of cash.

The first step to holding on to your cash is understanding where the leaks are. A business keeps score through financial statements. Do you evaluate financial statements on a monthly or quarterly basis to eliminate waste? Variable and fixed expenses must be matched to the margin dollars produced. When margins drop, you must eliminate wasteful expenses.

When was the last time that you re-evaluated credit card merchant fees (variable expense) or annual insurance premiums (fixed expense)? Cost of goods sold (COGS) must be minimized to increase maintained markup (MMU). Excessive overbuying increases COGS which decreases MMU.

The next step is developing an effective open-to-buy (OTB) merchandising plan that is based on today's reality, not just a guess based on last year's numbers. This plan should be adjusted monthly with objective inputs reflecting national trends, the economy, store trends, future events, and then reviewed by qualified merchandisers. Your plan must provide for the right inventory levels by month by class to support sales levels for planned marketing and store events. Your plan must also eliminate wasted investment and that starts with an accurate forecast of sales in each ...