Merchandise And Assortment Planning Pdf
File Name: merchandise and assortment planning .zip
- Merchandise Planning
- What is Assortment Planning?
- Solution Brief for Retail - Merchandise and Assortment Planning.pdf
- Planning Product Assortment Using Portfolio Optimization
There is only one way cution processes, it puts you in an ideal real-time performance met- to win it: offer shoppers the kind of position to maximize profits and adapt products they want when they want quickly to changing market conditions. Not only does it holistic approach to your merchandising enable you to create plans based on life cycle — an approach that focuses on preexisting templates, it helps assure the specific demands of your shoppers that those plans are executed as intend- and the positioning of your competitors. The application also helps ensure that This makes it difficult to set strategic your finance and merchandising depart- business objectives that dictate the di- ments, store operations, and trading rection of multichannel merchandising. Planning delivers data from a single, central source and provides top manag- End-to-End Support ers with the tools they need to make profitable decisions. With software that single click.
Merchandise planning is about striving to make the right product available, at the right time, in the right place, in the right quantities, and at the right price. It has been observed that a retail business has the chances of losing out a deal on their profits due to a reduction in price and loss of sales. To get an idea of the amount of loss you can incur due to markdown and lost sales, in terms of money, have a look at the example given below.
And, to have merchandise that is in demand and moves swiftly through the supply chain and order fulfillment process. You have to manage inventory efficiently, observe the sales trends, match them with the forecasted trends and maintain the right amount of products at the right time, for the right time, in front of the right customers, and with the right selling price.
How can I achieve all these things, in this highly competitive omnichannel retail industry? Though different retailers of different industries would have a different way to plan their merchandise, however, the aim or goal of all of them is the same.
So, follow this write-up ahead to learn merchandise planning. Merchandise planning is a method of selecting, managing, purchasing, displaying, and pricing the products in a manner that brings in maximum returns on investment, value addition to the brand name by satisfying the consumer needs while avoiding the creation of excess inventory.
Moreover, merchandise planning is about striving to make the right product available, at the right time, in the right place, in the right quantities, and at the right price. As mentioned above, every industry will have a different way of approach to merchandise planning that will suit their specific needs. Retail industries like clothing will have to focus on the size, color, and design that will be in demand and how many of them they will be selling.
In contrast, an online grocery store will have to focus on selling different types of edible items and what people will need more in a particular season. Nevertheless, there is still a fundamental process of merchandising, which is followed by most of the companies and around which they structure their plan of action.
Demand forecasting is the pillar around which the strategy is crafter because, based on this, the stocks are stuffed up. Forecasting involves the anticipation of how a customer would behave during a sales season. A sales forecast is the primary step in figuring out the amount of inventory is needed and at what time.
In detail, the estimates should tell you about the number of the products required to purchase, the selling price of the products, and if it is needed to add new products to the merchandise assortment.
Mostly in sales or demand forecast planning, there are two approaches one is top-down planning and bottom-up planning. In top-down planning, the senior management figures out the demand and sales plan, and then it is given to the merchandising team.
On the other hand, bottom-up planning is that in which the mid-level department managers estimate the demand. Data derived from both approaches are then added to get the total demand figures. Now after you have forecasted demand and you know how much you need to plan how you are going to buy and manage the products so that you can provide the right product, at the right time and in the right place to your beloved customer.
Budgeting is the first stage of merchandise planning because, first, you need to know how much of your money will be invested or how you can minimize it. These products form a set because they share similar physical characteristics. Assortment Planning is about deciding the number of each product that will be bought to make sure the demand is met.
Assortment planning is done majorly to ensure that customers are allocated products in a balanced way. The details of inventory like color, size, materials, brand, etc.
This is called a merchandise hierarchy in which the products likely to be picked first or more in quantity are grouped, and the products that are less likely to be sold are kept together. Many times the grouping can go on to create levels. Open to buy is a technique of merchandise control that fulfills two jobs. One, to adjust the merchandise buying according to sales of the products. Second, to maintain the flow of stock so that the sale can take place smoothly as planned.
Planning for one month, you might want to buy the entire designed stock, but OTB will stop you from buying everything because you already have some on-hand inventory that you might have ordered, but you might not have received it. The range plan is about creating a balanced range for each SKU so that you have the exact amount of products available for your consumers.
The approach of the range plan is to ensure that the merchandise plan is on the spot, and you have every product in your pocket that will be asked by the customer. Post the decision of money to be invested is taken, another decision on what to buy and in what quantity also needs to be made.
The model stock plan, as the name suggests, is about precisely stocking the items in the amount required for each merchandise line. To execute the model stock plan, you would need a specific demand of the customers as in what the customer would like to buy and create levels of the amount required for each type of consumer choice. Lastly, in the plan, after the specific demand is figured out, the money is allocated for each type of item.
Retailers of modern times might not ask this question because they know how vital merchandise planning is; however, for the beginners or the ones who think that it is not that important, here are some of the reasons why you should plan your merchandise.
There are a lot of dilemmas involved in this, and as a smart planner, you need to make correct decisions to get out of those dilemmas. Yes, retailers having business both online and offline have to design a course of action for both and ensure that the inventory is available for both portals. Understanding the needs of an online customer and offline customer is the key because both, though they want a quality product, have a different approach to shopping.
You need to have an omnichannel approach to make it work, and therefore you should have a great connection between all the stores and their inventory. For that, a centralized inventory management system can help you to accumulate all the data on one desktop screen. This is also a balancing act because after you know that a product is right for the consumers, you need to figure out how much of that correct product is enough.
The quantity is significant because you might think that the merchandise will sell smoothly, but there is a limit to everything, so you need to understand how much you should stock without overstocking. You can use the OTB formula i. It is very much essential to understand that the plan that works for the domestic markets may fall flat for the international market, including the choice of merchandise because of the change in culture, geological demographics, and weather.
Often times US companies export their US product, which does not always translate in all areas of the world. Beyond just cultural inconsistencies when taking a product worldwide, there are challenges as simple as the product you are currently buying say for winter will not translate to a part of the world say the southern hemisphere which would be in summer during your winter season.
When going into an international market, corporations want to come out of the gates strong, and this means having plenty of inventory to support sales and potentially unplanned upside. While store openings can be difficult to nail down in the US, they become even harder to keep on time in an international market. A two-month delay in a store opening can mean a large back up in inventory if not planned accordingly. I hope the information is helpful to you for planning the merchandise effectively.
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Appreciate 1. Merchandise Planning - Table of Contents. What is Merchandise Planning? And, only then you add more inventory to your warehouse. Deciding on the Merchandise Needs. Now there are steps you need to take to plan your merchandise. The budget comprises five sections. The sales plan — Projecting the amount of each product that will be sold this season from each retail outlet, online platform, or marketplaces.
Inventory plan — this will tell you how much inventory you need to stock to achieve the demand. Planning the purchase levels — Planning of how much a single product will be procured.
Deciding on gross margin — the difference between the selling price and the COGS. Assortment Planning. Merchandise control — The Open To Buy. The advantages of OTB are — Saves you from overstocking, understocking, and going out of stock Maintains the budget and limits overspending Avoids markdowns because of the pressure to sell the excess inventory Reduces the loss of opportunity of sales due to out of stock scenarios Planning for one month, you might want to buy the entire designed stock, but OTB will stop you from buying everything because you already have some on-hand inventory that you might have ordered, but you might not have received it.
What is Assortment Planning?
Merchandise planning is about striving to make the right product available, at the right time, in the right place, in the right quantities, and at the right price. It has been observed that a retail business has the chances of losing out a deal on their profits due to a reduction in price and loss of sales. To get an idea of the amount of loss you can incur due to markdown and lost sales, in terms of money, have a look at the example given below. And, to have merchandise that is in demand and moves swiftly through the supply chain and order fulfillment process. You have to manage inventory efficiently, observe the sales trends, match them with the forecasted trends and maintain the right amount of products at the right time, for the right time, in front of the right customers, and with the right selling price. How can I achieve all these things, in this highly competitive omnichannel retail industry? Though different retailers of different industries would have a different way to plan their merchandise, however, the aim or goal of all of them is the same.
The task of planning product assortments using portfolio optimization is developed and applied to a case in apparel manufacturing and distribution. The planning process begins with the retail buyer, the key individual in the organization that selects merchandise for resale to the consumer. In order to maximize the profit and minimize the risk of the merchandise investment, the retail buyer must simultaneously consider many different factors that impact the merchandise mix decision. A merchandise planning model is developed for the retail buyer based on the concept of stock portfolio theory. The investment returns and risks are considered to determine the product assortment. A retrospective statistical test is conducted to verify the goodness of the product assortment portfolio model. The methodology, developed for a large Midwest retailer, can be extended to a wide variety of cases in manufacturing, especially cases involving the production of consumer products.
Keywords: Assortment Planning, Retail Buying, Store Operations, Firm Performance, Fashion Retailers. JEL Classifications: L81, L20, M 1.
Solution Brief for Retail - Merchandise and Assortment Planning.pdf
Skip to main content. Written by Tommy See. Contact Us. December 07, What is Assortment Planning?
A role-based user can do the following:. View the look and feel and of the assortment from the customer's perspective as a collection and at the detail level. Create a buy plan sales, margin, inventory, receipts, and sell-thru to guide the execution of the assortment and to track its results. Select options and request adjustments be made from an assortment offered by third-party vendors. Create a global assortment from which each regional business unit selects a subset to carry in their region.
Planning Product Assortment Using Portfolio Optimization
Staying stagnant is the quickest way to falling behind the competition. There are tons of ways to increase profitability, from in-store events to influencer marketing and everything in between. Assortment planning defined: Assortment planning in retail is when a store optimizes visual merchandising, store layout, and product placement for the most conversions. Product assortment planning happens by period, whether daily, weekly, monthly, quarterly, or some other cadence. Retailers often confuse merchandise assortment planning with purchasing. Though assortment planning gets way more complex and drilled down than that.
Looking for an assortment software solution that enables you to provide the right products to your customers at the right time and place? Or an assortment optimization service underpinned by our leading software and proven methodology? After booking your free online exploratory consultation, you can expect us to research and evaluate your unique context. Assortment planning is the process of selecting the collection of products which will be on offer in particular areas localisation and during specified periods of time seasonality. It considers the financial objectives and seasonality of the product selection in a way so that both you and your customers gain from the outcome.
assortment plans. • Develop the range plans and model stock plan. • Tools used for merchandise planning. Chapter 7: Planning Merchandise Assortments. 2.
What Is Assortment Planning?
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