Introduction
Merchandising planning can actually help a growing company to increase its profitability. The merchandising planning system has actually played a high profile in the retail industry. In order to make a merchandising plan correctly, the first thing to do is to make a business case for the project. System vendors have invested a great deal of time and money in persuading retailers just instead of making these merchandising plans which seems to be quite effective for these companies.
RLL is one of the fastest-growing companies in the United Kingdom. This company runs the entire merchandising department, including doing the following activities, it plans and coordinates buying, merchandising, and the promotion of products in an area of responsibility, it also does the work of monitoring sales and the accrued sales in the different assigned areas and adjusts the merchandising plans as they are needed to meet the desired goals and set objectives, it also establishes annual merchandise plans and budget for areas of responsibility and finally directing, coordinating and evaluating the different activities of the different buyers. (Abrams and Ronald, 1948).
RLL Category of stores
When to make the merchandising plans
Before making these merchandising plans, the first thing to ask yourself is whether you really have effective core operational systems in operating the myriad day transactions. Also, your transactional systems should be well established and clearly understood by your users. Also, you can describe your organization as information-driven. Your organization must also be mature enough. It is also easy to be seduced by the sizzle offered by the currently available products without taking into account the large investment that will be required to change the way in which your merchandisers operate.
What should a system achieve? It is assumed that the main goal of the merchandising plan’s system is to maximize sales and achieved margins by reducing stock-outs and markdowns. The merchandise planning system should include the following, pre-season analysis, plan seeding, channel planning, category level planning and store layout design. It is also known that some systems actually focus on the numeric side of planning while others focus on the visual side of planning and the qualitative side of planning.
In each of the modules, it focuses on a set of inputs, processes and outputs, for example, in the RLL Company, which operates 50 fashion stores throughout the United Kingdom. It has two distribution centres, one in the north serving 25 stores and the other one in the south serving the other 25 stores in all these stores on average, 2000 square feet of selling space with very small stock rooms for holding fastest selling products.
Now when making the merchandising plan for this company with 50 stores branch retailers. If we plan for all total branch levels, we will have 50 categories plans in this case to review. If we take these plans to the individual branches, we will have 50 branch plans to deal with and review. To some extend, in this case, the planning process, which you have chosen, will define the scope. For instance, if you wish to plan by use of space by branch, then you will be required to maintain a store base data and plan at the individual branch level.
When also making these merchandising plans, there are some things which can not actually be controlled and includes some of the things like weather patterns, competitive activities, economy and distortions and hence. As a result, some of these things should be left constant since they have to occur. Also, these variables can actually have a strong impact on the performance of the company. The main elements of a planning system include
The pre-season analysis is very much vital when preparing these plans. It is seen as the foundation on which effective planning is based. The pre-season analysis actually involves reviewing actual data before the planning process actually begins. Strategic planning is also vital. In almost every business, it should have key performance measures that can well be defined, for example, can define terms like we are doing all right as long as in our company, our sales are increasing by a certain percentage like 45%, and our achieved margin is a certain percentage like 59%. (Abrams and Ronald, 1948).
RLL merchandise planning for South store ladies casual high
Annual trading profile.
Requirements by the clients
RLL directs the activity of buyers to help optimize sales and profit through leadership, communicating and training. It also meets with buyers daily and suggests alternative-buying plans as needed, and this actually helps the company to gear towards its determined goals and objectives. It also manages the merchandise buying, which is actually based on business analysis and its merchandising plans. This actually helps the company to monitor its market trends and its sales activity.
It also happens to attend various functions like trade shows and markets, and this actually helps the company to improve on its various functions. The company also establishes merchandise plans, and these plans actually help the company to forecast its future activities, development of its various activities, and plan and analyze its different activities. The company also prepares different seasonal merchandising plans, and it’s through working together with the buyers that the company is in a position to determine costs and pricing of its goods in order for the company to make a profit—managing the existing business, which at the end leads to the growth of the company.
It also develops the annual budget, which includes the sales and profit figures, space requests, promotional emphasis and products advertising. Requirements for making the buying and merchandising plans. Need for a thorough knowledge needed in retail budget formulation, enough skills needed in analyzing sales and economic data, spotting trends and the development of contingency plans, skills which are actually vital when analyzing and resolving problems arising when doing the different activities of the company, skills which are needed in order to achieve the estimated and formulated goals and objectives, skills needed when establishing these plans in order to effectively meet the formulated goals and objectives, and ability to develop detailed and maintain current knowledge of products, events and trends.
Merchandising tips. Merchandising can be seen as a combination of science and art that takes strategy, imagination, money and persistence. There is a need to build a good merchandising plan for your company in order for it to succeed since the merchandising plan helps you to dazzle customers. (Sullivan, 1913).
The trade-off concept as an aid to the decision-making process
The application of visualization actually helps to aid trade-off decisions when solving multi-objective problems and uncertainties. In this case, the plan implementer should consider potential complex trade-offs decisions, and this helps him to choose a point in which to proceed. He can examine the coupled subsystem design space under different uncertainty co0nditions through three-dimensional visual representation. There are certain buying decisions which include, buying straight from the manufacturers and this makes prices below since there are no middlemen to raise the prices, buying online and the advantage is that computer shopping sites have an exclusive amount of product information and lastly is buying using a VAR or systems integrator.
There are also various deciding factors, which companies need to look at before it makes any move. One is that the company needs to answer the question of whether that product is good or not for the company, whether there is actually enough information to make that decision, and if the information is enough, should go ahead and make that decision, need to answer the question which can be trusted to advise you on making that decision and lastly whether the company can be in a position to pay for that decision. (Benach, 1994).
Recommendations
According to the plan, suppliers should be chosen based on their performance. For instance, in the above case, you find that ladies casual wear has the best performance and hence. As a result, the company producing that product should be encouraged. The pricing and markdown strategy should be based on the other competitors. (Benach, 1994).
Reference
Abrams and Ronald, J (1948). The Technique of Fashion Layout. New York: Harper.
Stratton, H. (1940). Consumer behavior. Jacksonville 111,Numb. Inc.
Sullivan, J. (1913). Markets for the people: The consumer part. New York, Macmillan Company.
Benach, J (1994). Information technology and the corporation of the 1990s. New York Oxford University Press.
Spaeth, L, (1936). What about Dollars? Consumer Education. New York, McClure Publishing Company.