UNIT - 1

Merchandise concepts, importance

 Concepts of Retail Merchandising

 RETAIL: The word retail is derived from the word retalier,

which in French means to cut off or to break the bulk.

 RETAILING: Retailing includes all the activities involved in

selling goods or services to the final consumer for personal
non-business use, usually in small quantities.

 TRADING: Trading means buying and selling of goods.

Traders may be wholesalers or retailers.

 MERCHANDISE: Merchant means trader and merchandise

means goods meant for trading.
 In conti…
 MERCHANDISING: All the activities and processes related to
proper management of merchandise are referred to as
merchandising.

 Termed as the planning, buying and selling of merchandise

 It is an integral part of retailing and is also one of he most
challenging functions
 Retailers often say, “GOODS WELL BOUGHT ARE HALF
SOLD”.

 Merchandiser is someone who is continuously involved in

business promotion by buying and selling of goods.
 IN THE SUPPLY CHAIN, merchandising is the
practice of making products in retail outlets
available to consumers, primarily by stocking
shelves and displays.
 IN RETAIL , merchandising means maximizing
merchandise sales using product design, selection,
packaging, pricing, and display that stimulates
consumers to spend more.

 This includes disciplines in pricing and discounting,

physical presentation of products and displays, and
the decisions about which products should be
presented to which customers at what time.
 Roles & Objectives of Retail
Merchandiser
 Planning: 1.Forward visualization in terms of changing taste and
consumption patterns and different market segments on the basis of
age, gender etc., and 2. Collecting and analyzing store level data.

 Implementation: Effective implementation of plans.

 Acquisitions: Procurement of material from wholesalers,

manufacturers, in house production, S&R basis, consignment basis etc.

 Handling: Merchandising needs to be handled in an appropriate

way to ensure that it is sold in perfect condition.

 Monitoring: As buying is an investment decision, entire merchandise

operation needs to be monitored to ensure adequate returns.
 The Right Merchandising Blend
 Right Merchandise: Keeping in mind consumer needs, tracking consumer
purchasing patterns, being aware of changes in fashion and tastes and
introducing new products.

 Right time: Stocks should be managed so that the product offer reflects the
requirement of customers at any particular time.

 Right Quantity: Retailer must neither run out of stock nor tie up capital and
space in excess stock. Too much stock may also result in reduction in prices to
clear the dead/slow moving stock leading to reduction in profits.

 Right Place: Merchandise must be procured keeping in mind the size and
location of store, profile of customers, logistical concerns etc.

 Right Price: Sales price must also be kept in mind while making a purchase
decision. For e.g. smaller margin for fast moving /bulk items, larger margin on
less frequently sold products, price level the customer is willing to pay etc.
 Importance of merchandising
 Merchandising is very crucial.

 The main reason is stock is the retailers biggest cost. It is

fundamentally the most important financial asset to the
business, and effective merchandising has a significant
impact on the retail business because of this.

 It's the Buyers' and the Designers' job to ensure that they
produce beautiful products that our customers are going
to love and are fantastic value for money, but it’s the
Merchandisers’ job to make sure they maximise the
potential of that stock.
 A great Merchandiser needs to understand product
and also be very numerate. The key is to mesh these
two things together because they need to be able to
look at the numbers and understand what our
customer is actually saying to them.

 As everybody knows, Next is a multi-channel business

across Stores, Mail Order, and the internet. The
challenge is to continue to seamlessly integrate all
three sides of the business.
Roles & Responsibilities of Merchandising Dept.-
According to position in hierarchy

General Merchandising Manager:

 Developing an overall merchandising budget

 Establishing the store’s merchandise direction (Product lines,
price points, and quality).
 Determining budgetary allocations for Divisional
Merchandising Manager.
 Carrying out top management’s merchandising policies.
 Regular meetings with the merchandising team and market
specialists.
 Visits to the market place, trade expositions and showroom
 Divisional Merchandising manager

 Assisting and advising the General Merchandising

Manager.
 Responsible for a particular merchandising line. For e.g.
Divisional Merchandising manager for children' wear
would supervise the buyers who purchase merchandise
such as baby clothes, clothes for newborns, clothes for
boys, clothes for girls, accessories etc.
 Distributing the division’s budget to the buyer.
 Coordinating the efforts of buyers to ensure that the
overall merchandising direction decided by top
management is followed.
 Advising buyers on merchandise acquisitions
Buyer

 Buyers are mainly responsible for developing a product offer

that meets customer’s expectations of value and quality.

 Buyers negotiate a price, order the goods, agree on a

delivery date, complete all the paper work and keep in touch
with the suppliers to ensure that goods arrive on time.

 They are also responsible for vendor selection, development,

and management.

 They maintain regular contact with sales force and interact

with shoppers.
Central Buyers: Work for chain stores and mail order
houses and generally located at head quarters

Associate or junior buyers: Usually buy specific items for

a department or division of a large organisation which is
too large to be served by a single buyer. She/he
assumes responsibility for specified purchases but need
to coordinate with head buyer.

Purchase agents: They focus on routine purchase tasks

specializing in commodities or a group of commodities.
They usually track market conditions, price trends, and
future markets.
Roles and responsibilities of
merchandisers according to store formats

Buying for a single independent store

 Coordinating the purchasing of various products

required for the store.
 Writing Orders.
 Handling special orders as and when they are received.
 Deciding about merchandise returns.
 Pricing of merchandise.
 Planning sales promotion and publicity.
Buying for a chain store
 Buyers should be specialist for specific product lines
or specific regions.

 S/he should be aware of peculiarities of different

merchandise and type of merchandise needed for
different markets.
Buying for non store retailers (Catalogues,
Direct mail, Home shopping, E-tailing)

 S/he should be aware of peculiarities of large

geographic area as merchandise orders shall be
received from a wide region.

 Very advance planning is required as production of

catalogue takes a long time.

 Uniqueness of product and competitiveness of price

needs to be ensured to counterbalance the effect of
touch and feel factor.
The Key Merchandising Competencies required
for a merchandiser/buyer

 Effective communicator
 Appropriate interpersonal skills
 Advanced numerical capabilities (To work out budgets,
understand sales figures, prices, markups etc.)
 Ability to translate customer’s wants into specific
products.
 Ability to work in a team
 Itinerant-Should love traveling.
 Awareness of general economic conditions to anticipate
consumer buying patterns
 Resourcefulness, Good judgment, self-confidence, Quick
decisions, Ability to take risk and marketing skills.