Merchandising Strategy

This video is on Merchandising Strategy.
Merchandise management is concerned with the planning and controlling of the retailers inventories.
It is a process by which a retailer attempts to offer the right quantity, of the right merchandise, in the right place, at the right time along with meeting the financial goals of the company.
Merchandise management is the analysis, planning, acquisition, handling and control of the merchandise investment of a retail operation.
Analysis
Retailers must be able to correctly identify their customer before they can ascertain consumer desires and their needs/requirement to make a good buying decision.
Planning
Planning is important because merchandise to be sold in the future must be bought now.
Acquisition
Acquisition because the merchandise needs to be procured from others- either distributors or manufacturers.
Handling
Handling involves seeing that the merchandise is where it is needed and in the proper condition to be sold.
Control
Control as the function of merchandising involves spending money for acquiring products, it is necessary to control the amount of money spent on buying.
Types of Merchandise
Staple / Basic Merchandise
Staple merchandise are those products which are always in demand. They may also be the basic necessities of life like sugar, salt, pulses, groceries, etc.
Depending on the types of the retail model, the retailer has to determine the staple products for the store. In many cases these products may also be termed as classics.
Fashion Merchandise
Merchandise which has high demand for a relatively short period of time is referred to as fashion merchandise.
Excess buying may result in heavy obsolete stock at the end of the season or when the product goes out of style.
Seasonal Merchandise
Seasonal merchandise includes products that sell well during a particular season.
Example of such products includes rainwear like umbrellas and raincoats, winter wear, thermal clothing etc.
Fad Merchandise
Fads in contrast of fashions, enjoy popularity for a limited period of time and usually generate a high level of sales for a short time.
Example - Belts Over Suspenders, Trench Coat, Collar Pins, Bell-Bottoms
Merchandise Management - Key Topics
Assortment
Selection of merchandise carried by a retailer.
It includes both the breadth of product categories and the variety within each category.
Variety of Merchandise [product lines]
The variety of the merchandise mix refers to the number of different lines that the retailers stocks in the store.
For example, a department store may provide a collection in men’s, women’s, and children’s wear.
This would then be termed as the variety offered by the store.
Width/ Breadth of Assortment
Width of merchandise may also be referred to as breadth of merchandise
Refers to the number of merchandise brands in the merchandise line.
For example, a retailer stocking various brands of men’s shirts, etc.
Depth of Assortment
The variety in any one goods/service category (product line) with which retailer is involved.
For example, if a retailer decides to stock 10 designs of shirts in 5 different sizes and colors, and then it would be the depth of the assortment.
Principles of Merchandising
Understand the Target Market
The retailer exists for the customer. Thus product retailed in the store should be a reflection of the consumer needs and wants.
Build the Merchandise Plan, one store at a time
The customers visiting each store are different; hence they have to be understood as separate entities.
Buy what your customers want, not what you want
The buyer (retailer) is the representatives of the consumer and it is necessary to remember that the choice and the taste of the target consumer may be very different from that of the buyer (retailer).
Build the Right Assortment
In case of most of the products which are bought/ consumed, the consumer is always looking for choice.
Be Consistent
When building a range of products for the customer, it is necessary to ensure that there is consistency across all products offerings; consistency is required not only in the choice of products offered, but also in the quantity.
Offer Value
The consumer’s decision to buy a product is not always governed by price alone. Nowadays, the consumer is seeking value in the purchase that he makes.
Merchandise Planning
It is the planning and control of merchandise inventory of the retailer firm, in a manner which balances between the expectation of the target customers and the strategy of the firm.
It is beneficial to the retailer as it enhances the possibility of the right assortment of goods, with the adequate amount of depth to be available at the stores.
This video is on Merchandising Strategy and it has the following sub-topics.
Time Stamps
0:22 - Merchandise Management
6:30 - Merchandise Planning
12:55 - Merchandise Procurement
18:38 - Buying Function
22:49 - Category Management
26:52 - Lifestyle Merchandising