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MERCHANDISING
ASSORTMENTS
& BUYING SYSTEMS
Krithika G.K
Asst. Professor
FMS
Session 1
KGK-FMS
Retail Merchandising
….
… is the process by which a retailer attempts to
offer the right quantity of merchandise, in the
right place, at the right time while meeting the
company’s financial goals.
- Levy & Weitz
- Swapna Pradhan
Planning Merchandise KGK-FMS
Assortments
Source: Retailing Management; Levy & Weitz, Exhibit 12-1, Pg. 348
KGK-FMS
Buying Systems
Source: Retailing Management; Levy & Weitz, Exhibit 12-1, Pg. 348
KGK-FMS
Assortment Planning…
….the process of trading off variety,
assortment and backup stock
Assortment Plan…
….is the culmination of planning the financial
& merchandising objectives for a particular
merchandise category
Organizing the
Buying Process by
Categories
Session 1
KGK-FMS
Category
Category is an assortment of items that
the customer sees as reasonable
substitutes for each other.
Session 1
Standard Merchandise KGK-FMS
Session 1
KGK-FMS
Merchandising Financial
Performance: GMROI
GMROI:
Source: Retailing Management; Levy & Weitz, Exhibit 12-3, Pg. 355
KGK-FMS
Apparel 241
Food 170
Furniture 111
Consumer electronics 97
Source: Retailing Management; Levy & Weitz, Exhibit 12-2, Pg. 348
KGK-FMS
Source: http://www.slideshare.net/shrirangan1986/retail-presentation-783281
Measuring Inventory
KGK-FMS
Turnover
Inventory Turnover:
= Net Sales
Avg. Inventory at Retail
Avg. Inventory:
Inventory TO
Increased sales volume
Increases asset TO
KGK-FMS
Session 1
KGK-FMS
Forecasts:
Review past sales
Forecasting
Previous Sales Volume
Customer Information
Focus Groups
Competition
Cycle
Maturit
Total Retail
Source: Retail Management; Berman & Evans; Eighth Edition; Pearson
y Declin
Introductio e
n Growth
Sales
One Basic
VARIETY Some variety Greater variety Less variety
Offering
SALES
SALES
SALES
TIME TIME TIME TIME
Source: Retailing Management; Levy & Weitz, Fourth Edition; Exhibit 12-6, Pg. 363
KGK-FMS
1. Top-down Planning
2. Bottom-up Planning
Assortment Plan
Details the merchandise that will be sold in
each product/merchandise category –
complete mix of products available to the
consumer
Session 1
KGK-FMS
Stage 4:
Assortment Planning….
Merchandise
…involves determining the Hierarchy
quantities of each product Company
Merch. Category
SKU
The Assortment Planning
KGK-FMS
Process
Key Merchandising Terms
Staple / Basic Merchandise Variety
Merchandise Line:
A group of products that are closely related because they are intended
for the same end use, are sold to the same customer group or fall within
a given price range.
The Assortment Planning
KGK-FMS
Process
Trade-offs b/w Variety, Assortment & Product
Availability
Source: Retail Management; Berman & Evans; Eighth Edition; Pearson Education Asia; pp.469
Retail Assortment Strategies
1. Wide & deep
Source: Retail Management; Berman & Evans; Eighth Edition; Pearson Education Asia; pp.469
KGK-FMS
Advantages Advantages
Source: Retail Management; Berman & Evans; Eighth Edition; Pearson Education Asia; pp.469