UNDERSTANDING RETAIL CONSUMER RETAIL MERCHANDISING What is Merchandising Merchandising consists of the activities involved in acquiring particular goods and services and making them available at the p.
RETAIL MERCHANDISING What is Merchandising • Merchandising consists of the activities involved in acquiring particular goods and services and making them available at the places, times, prices and quantities that enable a retailer to reach its goals • A merchandising philosophy sets the guiding principles for all the merchandising decisions the retailer makes • Must reflect the target market desires, retailers institution type, the marketplace positioning, the defined value chain, supplier capabilities, cost, competitors and product trends • Drives every product decision, from what product lines to carry to shelf space allotted to different products to inventory turnover to pricing Merchandising Philosophy Retailer needs to decide: • Breadth of assortment (narrow or wide) • Depth of assortment (deep or shallow) • Quality of assortment (high/med/low) • Store brands or national brands • Pricing policies Merchandise management • Includes the planning, acquisition, analysis, handling and control of merchandise and investment of the retail operation - analysis: needs & wants of the target audience - Planning: for future sale of merchandise - acquisition: procurement from distributors and mfgs - Handling: merchandise available at required store at right time and right condition - Control: Amount of money spent on buying • Micro merchandising: Retailer adjusts shelf space allocations to respond to customer and other differences amongst the local markets Data mined through the data base Eg space for cereals for adults • Cross merchandise: carries complementary goods and services to encourage shopper to buy more Eg apparel stores and accessories (shirts and scarves, frypans and scrubbers) ATTRIBUTES AND FUNCTIONS AFFECTING THE BUYING ORGANIZATION LEVEL OF FORMALITY Used by larger firms includes functions of acquiring the merchandise and making it available for sale Distinct retail task with Formal separate dept Full time, specialized merchandisers Clarity of responsibilities Same personnel carry out buying (merchandising) and other retail functions Small retailers less emphasis on merchandise planning Informal Responsibility and authority are not clear cut Not a distinct task Low costs and flexibility DEGREE OF CENTRALIZATION All buying ( Adv include integration of effort, strict controls, Centralized consistent image proximity to top mgt, staff support, volume discounts , Adv include adaptability to local conditions, quick order Decentralized processing, good employee morale due to local autonomy All buying done locally Organizational breadth • In general buying organization, one or several people buy all of the firms merchandise • Eg owner of small store: does all the buying himself Good for small retail store, saves cost and personnel • Specialized organization: Separate buyers for each section Greater expertise and more personnel required Personnel Resources • Retailer can choose between an inside buying organization and an outside buying organization • Inside buying: staffed by retailers personnel and decisions are made by permanent employees Used by very large retailers and very small retailers • Outside buying: external source is hired on a fee basis Used by small or medium sized retailers • Resident buying office: touch with key market trends, provide data and contacts • Cooperative buying: Group of retailers come together to avail of volume discounts ... making it available for sale Distinct retail task with Formal separate dept Full time, specialized merchandisers Clarity of responsibilities Same personnel carry out buying (merchandising) and other