CLASS 1
CH1
What is Retailing?
● Retailing is the set of business activities that adds value to the products and services sold to
consumers for their personal or family use
● Did you know? 84% of Canadians own a smartphone.
Functions Performed By Retailers
● Retailers provide important functions that increase the value of the products and services they
sell to consumers.
● Retailers facilitate the distribution of those products and services for those who produce them.
● Value-creating functions such as:
○ Providing an assortment of products and services
○ Breaking bulk
○ Holding inventory
○ Providing service and services
Social and Economic Significance of Retailing
● Corporate Social Responsibility (CSR) describes the voluntary actions taken by a company to
address the ethical, social, and environmental impacts of its business operations and the
concerns of its stakeholders.
● 1,000,000 (and counting) of children have participated in Canadian Tire’s “Jumpstart” program
since 2005.
Retail sales in Canada
● Retail is a driving force of Canada’s economy and affects every facet of life.
● Canada’s leading retailers tend to concentrate their operations in four provinces (BC, Alberta,
Ontario, Quebec) as they include the country’s largest cities
● Sales in the retail sector were dominated by the motor vehicle and parts sub-sector, which
totalled $149.7 billion in sales in 2023, or 24.8% of market share, and the food and beverage
store sub-sector, which totalled $142.0 billion, or 23.5% of market share
Global Retailers
● The top 10 have a much larger geographic footprint than the top 250 overall
● The average revenue derived from foreign operations for the Big Ten is approximately 25.8% of
their overall income.
● With worldwide retail revenue estimated at $4.7 trillion, the ten largest global retailers represent a
32.2% share of the world market
● The acronym IKEA is made up of the initials of the founder’s name (Ingvar Kamprad) plus those
of Elmtaryd, his family farm, and the nearby village of Agunnard
Opportunities in Retailing
Management Opportunities
● Retail managers are often given considerable responsibility early in their careers.
● After completing a management training program in retailing, managers can increase their
starting salary in three to five years if they perform well
Entrepreneurial Opportunities
● Tim Horton (Tim Hortons)
● Eddie Black (Black’s Cameras)
● John Holt and G.R. Renfrew (Holt Renfrew)
● John Forzani (Sportschek)
The Retail Management Decision Process
Understanding the World of Retailing
Customers
● Customer needs are changing at an ever-increasing rate
● Retailers are responding to broad demographic and lifestyle trends in our society, such as the
growth in the elderly and minority segments of the Canadian population and the increasing
importance of shopping convenience to the rising number of two-income families
Developing a Retail Strategy
● The retail strategy indicates how the firm plans to focus its resources to accomplish its objectives.
It identifies:
○ The target market, or markets, toward which the retailer will direct its efforts
○ The nature of the merchandise and/or services the retailer will offer to satisfy the needs of
the target market
○ How the retailer will build a long-term advantage over competitors
Strategic Decision Areas
The key strategic decision areas for a retailer involve determining:
● Market strategy
● Financial objectives
● Location strategy
● Organizational design
● Human resources management strategies
● Retail information and supply chain management systems
● Customer relationship management
● More than half (54%) of retailers said the customer experience is their most important area of
focus, way ahead of cross-channel marketing (16%), data-driven marketing (14%), mobile (11%),
and programmatic buying/optimization (4%)
Retail Strategy
Ethical and Legal Considerations
Some examples of difficult situations that retail managers face are:
● Should a retailer sell merchandise that it suspects was made using child labour?
● Should a retailer advertise that its prices are the lowest available in the market, even though
some items are not?
● Should a retail buyer accept an expensive gift from a vendor?
● Should retail salespeople use a high-pressure sales approach when they know the product is not
the best fit for the customer’s needs?
● Should a retailer treat some customers better than others?
CH2
Expanding Retail Breadth
● New retail formats have been developed.
● Consumers can now purchase the same merchandise from a wide variety of retailers
● The initial category specialists in toys, consumer electronics, and home improvement supplies
have been joined by a host of specialists, including:
○ Spotchek (sportswear)
○ Bed Bath & Beyond (home decor)
○ PetSmart (pet supplies)
● Other established retailers have added to their merchandise mix:
○ Loblaw’s - pharmacies, clothing (Joe Fresh) and home decor products to expand their
retail mix
○ Shoppers Drug Mart - grocery products to the traditional health and beauty options
● Rental companies represent an interesting retail format that has evolved from:
○ Simple car/equipment rental
○ Netflix (streaming movies and TV shows)
○ Easyhome (sales and lease ownership firm)
● The internet has spawned a new set of retailers offering consumers the opportunity to buy
merchandise and services:
○ [Link]
○ [Link] - Participate in auctions
○ [Link] - “take it or leave it” bids
Increasing Industry Competition
The Canadian marketplace is powered by a small number of large retailers who dominate in their specific
retail category.
Retailer Characteristics
Four elements of the retail mix classifying retailers:
● Types of merchandise/services offered
● Breadth and depth of merchandise offered
● Level of customer service
● Price of merchandise
Type of Merchandise
● The US, Canada, and Mexico have developed a classification scheme called the North American
Industry Classification System (NAICS) to collect data on business activity in each country
● Every business is assigned a hierarchical, six-digit code based on the type of products and
services it produces and sells
● The first two digits identify the firm’s business sector, and the remaining four digits identify various
sub-sectors.
● Most service retailers appear in sector 71 (arts, entertainment, and recreation) and 72
(accommodation and food services)
● For example, food services and drinking places are in category 722, subdivided into full-service
restaurants (7221) and limited-service eating places like fast food restaurants
General Merchandise
The types of general merchandise retailers include:
● Discount stores
● Specialty stores
● Category specialist
● Department stores
● Home improvement centres
● Off-price retailers
● Value retailers
Food Retailers
● As shown in the world’s largest food and grocery store is Walmart, with sales over $433 billion in
2021
● The next largest is Amazon, at $236 billion in sales, and Kroger rounded off the top three with
sales of $132 billion
● Canadian retailers had a number of entries with the top world retailers
○ Loblaws placed 14th with $37.6 billion in sales
○ Sobeys placed 17th with $26.6 billion in sales
○ Dollar Tree placed 19th with $25.5 billion in sales
○ Metro placed 26th with $14.3 billion in sales
Big Box Food Retailers - Warehouse Clubs
● A warehouse club is a retailer that offers a limited assortment of food and general merchandise
with little service at low prices to ultimate consumers and small businesses
● Large stores in low-rent areas
● Simple interiors and concrete floors
● Costco and U.S.-based Sam’s Club (a division of Walmart), is the fourth-largest food retailer in
Canada (Sam’s Club left Canada in 2018)
Nonstore Retail Formats
● Electronic Retailing (e-tailing, online retailing and internet retailing) is a retail format in which the
retailers communicate with customers and offer products and services for sale over the internet
● Catalogue Channels is a non-store retail channel in which the retail offering is communicated to
customers through a catalogue, whereas direct-mail retailers communicate with their customers
using letters and brochures
Television Home Shopping
● Cable channels dedicated to television shopping - The Shopping Channel
● Infomercials
● Direct-response advertising
Services Retailing
Merchandise/Service Continuum
All retailers provide goods and services for their customers. However, the emphasis placed on the
merchandise versus the services differs across retail formats, as shown above.
● What is the value of this continuum with respect to retailing?
○ Intangibility
○ Simultaneous product and consumption
○ Perishability
○ Inconsistency of the offering to customers
Multichannel Retailers
● A multichannel retailer is a retailer that sells merchandise or services through more than
one channel.
● Single-channel retailers are evolving into multichannel retailers to attract and satisfy
more customers.
● By using a combination of channels, retailers can exploit the unique benefits provided by
each channel
Turning into the Multichannel Universe (M-commerce)
● Due to the rapid growth of domestic and international broadband access through mobile devices,
retailers are very interested in developing m-commerce - purchasing products and services
through mobile devices
● In addition, retailers have developed apps - small computer programs - that enable mobile device
users to engage in an activity such as shopping
● Example, The Brick, working with the development company Imagine Software Ltd., has an app
that allows consumers to scan QR codes on furniture tags and size the furniture against a photo
of a room in their home
M-Commerce
● Retailers have developed apps - small computer programs - that enable mobile device users to
engage in an activity such as shopping
● The adoption of mobile devices by consumers is growing at a rapid rate
● Mobile is a natural fit for the Canadian consumer, as Canadians are adopting mobile technology
● Many retailers are currently focusing on optimizing their websites for mobile devices
The Rise of Omni-Channel Retailing
Omni-channel retailing requires seamless integration between all channels so that shoppers can shop
any way they want with the exact same results.
● “An integrated sales experience that melds the advantages of physical stores with the
information-rich experience of online shopping.”
● With an omni-channel strategy, retailers allow customers to experience the brand, not a channel
within the brand
In order to employ a successful omni-channel retail strategy, an organization must consider the following
five factors
● Evaluate synergies across channels
● Find the best operating methods
● Choose technologies/processes for each operating method
● Define optimal flow paths
● Choose specific technologies
Types of Retail Ownership
● Independent, single-store establishments
● Corporate Retail Chains
● Franchise
CH3
What is Consumer Behaviour & Why is it Important for Retailers?
● The study of how individuals, groups, or organizations select, purchase, use, and dispose of
goods, services, ideas, or experiences to satisfy their needs and desires
● It involves understanding the decision-making processes of consumers and the various internal
and external factors - such as psychological, cultural, social, and personal influences - that affect
their choices
○ 1) Influence their purchase decisions at all stages of the buying decision process
○ 2) Design products that better meet the needs and wants of consumers
○ 3) Allocate and use its resources more efficiently and effectively
○ 4) Communicate more effectively with customers in an inefficient way (e.g. design better
advertisements and choose appropriate media and messages, such as message strategy
and execution)
Why do People Shop?
● Purchase merchandise or services
● Take a break from your daily routine
● Social experience
● Learn new trends and fashions
● Satisfy need for power and status
● Self-rewards
Need Recognition
● The buying process is triggered when
consumers recognize they have an unsatisfied
need (wants?)
● Types of Needs
○ Utilitarian - when consumers go shopping to accomplish a specific task, such as buying a
suit for job interviews
○ Hedonic - when consumers go shopping for pleasure
Selecting Merchandise
The retailer must do market research to collect the following information:
● Alternative retailers that the customers consider
● Characteristics or benefits that customers consider when evaluating and choosing a retailer
● Customers’ rating of each retailer’s performance on these characteristics
● Importance weights that customers attach to the characteristics/benefits
Purchasing the Merchandise or Service
Reduce wait times by:
● Having more checkouts
● Installing digital displays to entertain customers in the waiting line
● Queuing theory
○ Disney Virtual Queue - accessible via the Disneyland app - may be used for select
attractions or experiences. When a virtual queue is in place, you can request to enjoy that
attraction or experience later in the day, so you can enjoy other experiences while you
wait.
● Offer liberal return policies, money-back guarantees, price-matching policies, and refunds if
customers find the same merchandise at lower prices from another retailer
● Self-service checkouts, drive-throughs
● Click-and-collect via apps
Post-Purchase Evaluation
All about SATISFACTION
● How well a store, product, or service meets or exceeds customer expectations
● This then becomes part of the customer’s internal information that affects future purchase
decisions
● Unsatisfactory or Satisfactory experiences can result in?
This post-purchase evaluation then becomes part of the customer’s internal information and affects future
store and product decisions
Social Factors Influencing Buying Decisions
Approaches for Segmenting Markets
The segmentation Method(s) selected should be directly related to the target market of the types of
goods/services that the retailer sells
CH6
Store Design Objectives
A growing trend in experiential marketing known as “retailtainment” engages shoppers in various
interactive events such as contests, shows, giveaways, and activities. The results are sales increases
and long-term customer loyalty.
● When designing or redesigning a store, some objectives are to:
1. Implement the retailer’s strategy
2. Build loyalty
3. Increase sales on visits
4. Control costs
5. Meet legal requirements
Store Design Elements
● Three elements in the design of stores are:
1. Layout
2. Signage
3. Feature Areas
● To develop a good store layout, store designers must balance many objectives—objectives that
often conflict.
● The store layout should entice customers to move around and shop the store.
● Good layouts can: increase store traffic, drive sales and build store loyalty.
● Provide interesting design elements.
● Provide a balance between giving customers adequate space in which to shop and productively
using this space for merchandise
Store Design Objectives
● Does the shelf presentation meet the needs of the target customer?
● Is it logical and appealing?
● Does it help to differentiate the store?
● Is it consistent with the role, strategies, and evaluation criteria?
● Does it help to reinforce the variety and price images?
● Consistent with retailers’ image and strategy
● Positive influence on customer satisfaction and purchase behaviour
● Cost-effective
● Flexible
● Meet the needs of those with disabilities
Types of Design
● Grid
● Racetrack
● Free Form
● Servuction System
Grid Layout
● Long gondolas in a repetitive pattern
● Easy to locate merchandise
● Does not encourage customers to explore the store
○ Limited sight lines to merchandise
● Allows more merchandise to be displayed
● Cost efficient
● Used in grocery, discount, and drug stores
Racetrack Layout
● Loop with a major aisle that has access to departments and the store’s multiple entrances.
● Draws customers around the store.
● Provide different site lines and encourage exploration, impulse buying
● Used in department stores
Free-Form (Boutique) Layout
● Fixtures and aisles are arranged asymmetrically
● Pleasant, relaxing ambiance does not come cheap – small store experience
● Inefficient use of space
● More susceptible to shoplifting – salespeople can not view adjacent spaces
● Used in specialty stores and upscale department stores
The Servuction System
● This retail design is based on the service retailers
● Two separate areas:
○ Customer Interaction Area
○ Production Area (the chef)
● Consumers typically do not enter the service production area
● Processed service is either consumed in the Interaction area or taken away for consumption/use
at a later time
● Visible: In-store design; service providers/sales staff; other customers
● Invisible: Company policies, rules and regulations, company values
Signage & Graphics
Signage and graphics help customers locate specific products and departments, provide product
information, and suggest items or special purchases.
Types:
● Category Signage
● Promotional Signage
● Point-of-Sale Signage
● Generally, less is more, as customers are already being exposed to many sensory experiences
● Fewer signs, therefore, more attention to them
● “Bigger is Better” – in terms of size of signs, and more importantly, FONT
Prime Locations for Merchandise
● Highly trafficked areas
○ Store entrances
○ Near the checkout counter
● Highly visible areas
○ End aisle
○ Displays
Space Management - Space Allocated to Merchandise Categories
● Some factors that retailers consider when deciding on how much floor or shelf space to allocate
to merchandise categories and brands are:
○ The productivity of the allocated space.
○ Inventory turnover
○ Impact on store sales
○ The display needs required for the merchandise.
Space Productivity
Store planners must then adjust the initial estimate on the basis of the following 5 factors:
● How profitable is the merchandise?
● How will the planned inventory turnover and the resulting stock-to-sales ratio affect how many
SKUs will normally be carried in stock?
● How will the merchandise be displayed?
● Will the location of certain merchandise draw the customer through the store, thus encouraging
sales?
● What items does the retailer wish to emphasize?
Evaluating Space Productivity
Productivity ratios are output/input
● Sales per square foot
● Sales per linear foot
● Gross or contribution margin per square foot
Evaluating Space Productivity
● In-store advertising and promotion deliver your message in the convergence zone - where the
product, consumer and message all come together
● On average, 70% of purchase decisions are made in-store
Fixture - Four Types
● The primary purposes of fixtures are to efficiently hold and display merchandise.
● They must help define areas of a store and encourage traffic flow.
● 4 Fixture Types:
○ Straight Rack
○ Rounder
○ Four-Way Fixture
○ Gondola
Creating an Appealing Store Atmosphere
● Colour
● Scent
● Music
● Lighting
Website Design
In many, but not all, cases, the good design principles that apply to a physical store can also be
applied to a website and/or mobile app.
Consider the following examples:
● Simplicity Matters – No clutter
● Getting around – Find what you are looking for
● Let them see it – easily view the merchandise
● Blend the website and devices with the store - reassure customers that they are going to have the
same satisfactory experience
● Prioritize - advise & guide
● Type of Layout – speed, convenience, and ease of navigation, not necessarily fancy
● graphics
● Checkout – easy, fast and SAFE
If you can’t MEASURE it, you can’t MANAGE it
● Data can be obtained through technologies such as in-store kiosks, in-home scanners, and
intelligent shopping carts and analyzed using shopper segmentation tools
● Standardized frameworks on the best ways to analyze and interpret these data pools is lacking in
the academic research - use of an ‘eye camera’ to collect data about what media the shopper
sees and focuses on while shopping
CH4
What is a Retail Strategy?
The term strategy is frequently used in retailing. For example, retailers talk about their:
● Merchandise strategy
● Promotion strategy
● Location strategy
● Private-brand/label strategy
Definition of Retail Market Strategy
● The target market is the market segment(s) toward which the retailer plans to focus its resources
and retail mix.
● A retail format describes the nature of the retailer’s operations—that is, the retailer’s mix (product,
price [value], promotion [communication], place, people [team member], and processes
[systems])—that is designed to satisfy the needs of its target market.
Retail Mix Elements
● Product
● Price
● Place
● Promotions
● People
● Process
● Physical evidence
Developing Competitive Advantage
Three ways to build sustainable competitive advantages:
● Building strong relationships with customers
● Building strong relationships with suppliers
● Achieving efficient internal operations
Relationships with Customers
● Customer Loyalty
● Customers' commitment to a particular retailer
● Loyalty is more than simply preferring one retailer over another
● Loyalty means that customers will be reluctant to patronize competitive retailers
Brand Image
Retailers build customer loyalty by developing a well-known, attractive image of their brand—their name.
● Strong brand images:
○ facilitate customer loyalty because they reduce the risks associated with purchases.
○ consistent level of quality and satisfaction from the retailer.
○ The retailer’s image can also create an emotional tie, which leads the customer to trust
the retailer.
Positioning
● Positioning (Brand Building) is the design and implementation of a retail mix to create an image of
the retailer in the customer’s mind in relation to its competitors.
● Retailers need to research what its image is and make sure that it is consistent with what the
customers in its target want.
● A perceptual map is frequently used to represent the customer’s image and preference for
retailers.
Growth Opportunities
This involves directing efforts toward existing customers by using the present retailing format
● Devising strategies that induce current customers to visit a store more often to buy more
merchandise on each visit
○ Opening more stores
○ Open longer hours
○ Cross-selling
CH 5
Evaluating Specific Areas for Locations
● Many types of locations are available for retail stores, each with its own strengths and
weaknesses
● Location decision into four levels:
○ Country
○ Region
○ Trade area
○ Specific site
Competition
● Level of Competition
○ Saturated Trade Area
○ Understored Trade Area
○ Overstored Trade Area
Evaluating a Site for Locating a Retail Store
Four site characteristics to consider:
● Traffic flow and accessibility
● Location characteristics
● Restrictions
● Costs
Factors Defining Trade Areas
● Accessibility
● Natural & Physical Barriers
● Type & Size of Shopping Area
● Type of Store(s)
● Competition
Data Collection
● Retailers must determine how many people are in the trade area and where they live
● Retailers use the Internet and other published sources to assess their competition
● Customer Spotting:
○ To spot or locate the residences of customers for a store or shopping centre.
● Data specific to a retailer’s customers are usually obtained from:
○ Credit card or cheque (when was the last time you wrote a cheque?)
○ Customer loyalty programs manually as part of the checkout process
○ Automobile license plates (more so for retailers near provincial/US borders)
Location of Consumer Market Segments
● Data and analytics providers, such as Environics Analytics, specialize in developing and
enhancing census and marketing research data in a format that’s easy to understand, easy and
quick to obtain, and relatively inexpensive.
● Data from a national census will eventually be dated. These firms construct computer models to
generate estimates of current and future population projections, which can then be integrated with
behavioural and psychographic characteristics to predict consumer spending.
Measuring Competition - Anchor Stores
● An anchor store is a large retail store in a shopping centre or mall
● Generally, a high(er)-end store attracts customers to the mall
● An anchor store typically has a long-term lease, which helps the mall to generate a steady stream
of revenue
Types of Locations
● Shopping Centre “Mall”
○ A group of retail and other commercial establishments that is planned, developed, owned
and managed as a single property.
● Strip Centre/Plaza “Strip Mall”
○ A shopping centre that usually has parking directly in front of the stores and does not
have enclosed walkways linking the stores.
Location and Retail Strategy
The selection of a location type must reinforce the retailer’s strategy. The location type decision needs to
be consistent with the shopping behaviour and size of its target market and the retailer’s positioning in its
target market.
● Convenience Shopping - Consumers are engaged in convenience shopping situations,
○ Primarily concerned with minimizing their effort to get the product or service they want.
○ Indifferent about which brands to buy or the retailer’s image and are somewhat
insensitive to price.
● Specialty Shopping - When consumers go specialty shopping, they know what they want and will
not accept a substitute.
● They are brand and/or retailer loyal and will pay a premium or spend the extra effort, if necessary,
to get exactly what they want.
● Examples of these shopping occasions include:
○ Buying an expensive designer-brand perfume
○ Adopting a dog from the animal shelter
○ Buying a dress made by a specific designer
Density of Target Market
A good location has many people in the target market who are drawn to it.
● Convenience – Central Business District
● Comparison – Mall
● Specialty – will travel to get there
LAST CLASS - CH 9
Distribution Channels Add Value
Distribution centres are an important component in adding value:
● Buying
● Selling
● Facilitation of exchange
Distribution Components
Creating Strategic Advantage Through Supply Management and Information Systems
● Distribution Channel
○ Institutions that transfer the ownership of goods and move goods from the point of
production to the point of consumption.
● Supply Chain Management
○ To efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores,
and transportation intermediaries into a seamless value chain in which merchandise is
produced and distributed in the right quantities, locations, and times.
● Logistics Management
○ Describes the integration of two or more activities to plan, implement, and control the
efficient flow of raw materials, in-process inventory, and finished goods from the point of
origin to the point of consumption.
Supply Chain Management in Motion
● Good distribution is critical to marketing success
● A well-thought-out distribution strategy is critical when attempting to convince retailers to carry
their products
Factors Affecting Physical Distribution Service Levels
● Info on product availability
● Order processing time
● Backorder procedures
● Inventory storage
● Order accuracy
● Damage in transit
● Online status information
● Advance info on the delays
● Delivery time
● Compliance with customers
● Defect-free deliveries
● Handling adjustments/returns
Improve Product Availability
Efficient supply chain management provides two benefits to retailers and their customers:
1. Fewer stock-outs
2. Tailored assortments
These benefits translate into:
● Greater sales
● Lower costs
● Higher inventory turnover
● Lower markdowns for retailers
Information Flows - Key Terms
● Universal Product Code (UPC)
○ A black-and-white bar code containing a 13-digit code that indicates the manufacturer of
the item, a description of the item, information about special packaging, and details about
any special promotions.
● Advanced Shipping Notice (ASN)
○ It is a document that tells the distribution centre what specifically is being shipped and
when it will be delivered.
● Electronic Data Interchange (EDI)
○ The computer-to-computer exchange of business documents in a standardized format.
System Design Issues
Retailers need to consider the following:
1. Should we outsource to independent firms?
2. What merchandise, if any, should be delivered to the store, bypassing the distribution centre?
3. How should shipments be made directly to customers should be made?
Push vs. Pull
Pull and Push Supply Chains
● Pull Supply Chain
○ A supply chain in which requests for merchandise are generated at the store level on the
basis of sales data captured by POS terminals.
● Push Supply Chain
○ Merchandise is allocated to stores on the basis of forecasted demand - once a forecast is
developed, specified quantities of merchandise are shipped (pushed) to distribution
centres and stores at predetermined time intervals.
Collaboration Between Retailers and Vendos in Supply Chain Management
● Benefits of Coordination → Supply chain efficiency dramatically improves when vendors and
retailers share and work together
○ Using EDI
○ Sharing information
○ Vendor-Manged Inventory (VMI)
○ Collaborative planning, forecasting and replenishment (CPFR)
Electronic Communication Tools
● Radio Frequency Identification (RFID)
○ A technology that allows an object or person to be identified at a distance by means of
radio waves.
○ Attached to containers, shipping cartons or even behind labels on individual items.
○ Transmit data about the object in which they are embedded.
○ Keep track of where an item has been in the supply chain and where it is stored in the
distribution centre.
Beacon Technology
● Beacon technology is a newer technology currently for retailers across North America.
● Technology works with a consumer’s smartphone (Bluetooth) and an electronic enabler (beacon)
that the retailer locates on store shelves
Organizing the Buying Process
● Merchandise management activities are undertaken primarily by buyers and their superiors,
divisional merchandise managers (DMMs), and general merchandise managers (GMMs).
○ Merchandise Management
■ It is the process by which a retailer attempts to offer the:
● Right quantity of the…
● Right merchandise in the…
● Right place at the…
● Right time…
while meeting the company’s financial goals
Forecasting Sales and Category Life Cycles
● Category life cycle
○ Describes a merchandise category’s sales pattern over time.
○ Product categories typically follow a predictable sales pattern—sales start off low,
increase, plateau, and then ultimately decline.
● Forecast
○ Is the term used for forecasting short-term sales and other financial factors based on
current business conditions.
Developing an Assortment Plan
● Category Breadth and Depth
○ This is the number of different merchandising categories within a store or department. #
of SKU’s within the category.
● Depth
○ This is the amount of a particular item that a retailer will stock, includes the attribute of
brand, size, or colour - number of styles of a specific brand