1
CHAPTER 1
Retail Merchandising
TMH Swapna Pradhan Retail Merchandising
2
Retail Merchandising
The concept of merchandising
The need for the function of merchandising
The different roles of merchandising
Merchandising in different retail formats
The methods of buying
TMH Swapna Pradhan Retail Merchandising
3
Retail Merchandising
Merchandise strategy
Communications strategy
Customer service strategy
Format and environment strategy
Out of all these, merchandising is becoming
increasingly important.
1
‘Background to Strategy: A Review of Recent and Current Applications’,
Retail Strategy, Planning & Control, David Walters and Jack Harahan, pg 48
TMH Swapna Pradhan Retail Merchandising
4
Retail Merchandising
‘The planning involved in marketing the right
merchandise at the right places at the right time in the
right quantities at the right price.’
- American Marketing Association
TMH Swapna Pradhan Retail Merchandising
5
Retail Merchandising
Right product
Right quantity
Right place
Right time
Right price
TMH Swapna Pradhan Retail Merchandising
6
Retail Merchandising
‘The process of developing, obtaining, pricing,
supporting and communicating the retailer’s
merchandise offering.’
-Lewison, Merchandise Management,
Planning and Evaluating the Merchandise Mix, Retailing- 6th edition
TMH Swapna Pradhan Retail Merchandising
7
Retail Merchandising
Includes
Analysis
Planning
Acquisition
Handling
Control
-of the merchandise investments of a retail operation
TMH Swapna Pradhan Retail Merchandising
8
Retail Merchandising
Understanding the customer segment
Creating the basket that is offered to the customers
Merchandise assortment
Interacting with vendors and suppliers
Working towards determining the best suited vendors and
suppliers
Negotiating favourable manufacturing and supply terms
with the vendors
Retail buyers are also referred to as ‘customers’ advocates’.
TMH Swapna Pradhan Retail Merchandising
9
Retail Merchandising
Planning
Directing
Co-ordinating
Controlling
TMH Swapna Pradhan Retail Merchandising
10
Retail Merchandising
Forecasting sales for the forthcoming budget period.
Translating the sales forecast into inventory levels in
terms of rupees.
Inspiring commitment and performance on the part of
both, the merchandisers and the buyers.
Assessing the performance of merchandise and buyer.
TMH Swapna Pradhan Retail Merchandising
11
Retail Merchandising
The type of retail organisation
The type of merchandise to be retailed
The qualities to be retailed
TMH Swapna Pradhan Retail Merchandising
12
Retail Merchandising
Co-ordinating the purchasing for various products
Writing of orders
Handling special orders
Making decisions regarding merchandise returns
Re merchandising the store
Taking decisions with respect to the pricing of the product
Planning and coordinating various promotional activities and
events
Customer contact and selling
TMH Swapna Pradhan Retail Merchandising
13
Retail Merchandising
Central Buying Plan
Central Merchandising Plan
TMH Swapna Pradhan Retail Merchandising
14
Retail Merchandising
The mail order buyer needs to plan well in advance.
Buyers for an e-tail venture need to have a clear
understanding of the type of products customers will
buy online.
In direct marketing or e-tail ventures, it is the
uniqueness of the product(s) and the competitive
pricing, which makes all the difference.
TMH Swapna Pradhan Retail Merchandising
15
Retail Merchandising
TMH Swapna Pradhan Retail Merchandising
16
Retail Merchandising
The philosophy a retailer chooses to adopt also influences
his choice of merchandise.
It is a reflection of the retailer’s target market.
It varies from retailer to retailer.
It helps the retailer in determining the roles of the various
persons involved in the procuring-the-merchandising
function.
TMH Swapna Pradhan Retail Merchandising
17
Retail Merchandising
Co-operative Buying
◦ (a) Voluntary chains
◦ (b) Co-operative chains
Centralised Buying
Decentralised Buying
Buying Committee
Resident Buying Offices
TMH Swapna Pradhan Retail Merchandising
18
Retail Merchandising
1. Understand the target market
2. Build the merchandise plan, one store at a time
3. Buy what your customers want, not what you want
4. Build the right assortment
5. Be consistent
6. Offer value
7. Understand the needs of the vendor and negotiate a win-
win
8. Share information
9. Accept that mistakes happen
10. Seek to surprise the customer
TMH Swapna Pradhan Retail Merchandising