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Structure uniqueness of Textile Complicated stock keeping units (SKU) estimation Strong effect of Fashion Domination of textile supplier and retail buyers over manufacturers Difference of product ordering procedure
But the Biggest challenge is to“ Integrate qualitative data andtheory to quantitative demandforecasting ”This most of the time leads to Intuition basedDecision .
To reduce possible Fatal-loss from an uncertain demand prediction retail buyers use :-1)Quick response (QR) system2)Electronic Data Interchange (EDI)3)Point of sale (POS) system4)Management Information System (MIS) Implementation of these helps in1)Effective order-reorder schedule2)Inventory cost management3)Faster sourcing strategy4)Improvement of Assortment planning
RETAIL BUYINGPROCESS ROLE OF RETAIL BUYER Planning policies Buying in Budgeting Planning model stock Contacting Vendors Planning Promotions
RETAIL BUYING PROCESS Merchandise Planning For realistic Merchandise planning retail buyer must consider:-1)Target market demand2)Local retail competition3)Physical expansion needed in the store4)Planned promotional efforts5)Trend analysis6)Seasonal consumer demand7)Economic condition
RETAIL BUYING PROCESS Merchandise Planning Merchandise planning may require fashion forecast , sales forecast . Objective of Fashion Forecast in merchandise planning:-1)Studying market condition consumer buying behavior.2)Evaluating up to date fashion trend information.3)Noting street fashion of target consumer.
RETAIL BUYING PROCESS Merchandise Planning Objective of sales forecast in merchandise planning :-1)Trend analysis2)Effective order in term of quantitydecisions of specific style ,colors, size.3)To develop efficient and effectiveinventory control plan.
RETAIL BUYING PROCESS Merchandise Planning Two approach used for sales forecast:-1)Top-down2)Bottom-up 4 Steps of top-down forecasting process :- 1 • Planning sales goal 2 • Planning stock level for company & each store 3 • Planning assortment plan 4 • Making a sales forecast report
RETAIL BUYING PROCESS Merchandise Planning 3 steps of Bottom-up forecasting process:- • Determining sales potential for individual item 1 • Planning total sales & stock level by adding 2 • Making a sales forecast report 4• If item proportion in assortment plan is positively correlated BOTTOM-UP approach is used .• If item proportion in assortment plan is negatively correlated TOP-DOWN approach is used.
RETAIL BUYING PROCESS Assortment Planning UNIT PLAN DOLLAR PLANUNIT PLAN:- It most often refer to qualitative decision DOLLAR PLAN :- It is quantitative result of assortment planning
RETAIL BUYING PROCESS Actual buying and rearrangement plan with vendors Retail buyer looks for new product. Vendor evaluation on following criteria :-1)Quality of goods2)Good delivery3)Product fashion-ability4)Fair price5)Styling6)Reputation7)Selling history8)Steady source of supply.
RETAIL BUYING PROCESS Organizational Buying BehaviorOrganizational Buying Behavior involves three aspects • Psychological world of individuals involved 1 • Rapid & joint buying decision making 2 • Conflicts and its resolution among decision 3 makers.
RETAIL BUYING PROCESS Assortment - planning process
RETAIL BUYING PROCESS Assortment planning process 1.PROBLEM RECOGNITION It is perceived gap or discrepancy between current state and desired state of company /store. Two Major problem with which this step begins :- 1) Change in desired state for a store . 2) Change in current store assortment .
RETAIL BUYING PROCESS Assortment planning process 2.Information Search Internal source of Information :- Store records , merchandise plan reports , sales people opinion. External Source of Information :-a)Customer panelb)Consumer magazine & trade publicationc)Vendor opiniond)Trade associationse)competitorsf)Fashion forecast magazine .g) Reporting bureaus.
RETAIL BUYING PROCESSq Assortment planning process 3.Product Evaluation(a) Qualitative Evaluation :- Important aspect in evaluation is desired solution to a problem, establishing criteria of evaluation. Fiorito`s product specific criteriaKang found in her :- Quality research that retail buyers and their Color target customer have similar variance Position on the fashion cycle of criteria importance and product specific Styling perceived risk Distinctiveness
RETAIL BUYING PROCESS Assortment planning process 3.Product Evaluation(b) Quantitative Evaluation :-Its component are following :- Initial markup for period Planned net sales Planned BOM(Beginning of month) Planned ending inventory (EOM) Planned reduction Planned purchases at retail.
RETAIL BUYING PROCESS Assortment planning process 4.Forecasting product selection and sales. Forecasting Style Selection Forecasting Color Selection Forecasting Size SelectionForecasting methods for Assortment -planning :- 1. Decomposition 2. Product life cycle analysis 3. Exponential Smoothing 4. Regression Analysis 5. Jury of Executives. 6. Fashion Diffusion Curve Analysis
RETAIL BUYING PROCESS Assortment planning process 4.Forecasting product selection and sales. Decomposition :- It is a sales forecast which split total sales forecast for individual forecast of each product line and SKU level by importance rating. Regression Analysis :- It is a forecast that estimate relationship between sales and external variables. Exponential Smoothing :- It is a weighted moving average of past sales with considering irregular component. Jury of executive opinion :- It is a sales forecast based on cross section of a smaller expert group .
RETAIL BUYING PROCESS Assortment planning process 5. Rules for Product Selection1. Compensatory Rule :-It includes calculation of an importance weight and attribute rating for each attribute & then arrive at total product satisfaction score by adding them.2. Lexicographic Rule :- It requires to rank the attributesaccording to importance & then select brand that is superioron most important attribute.3. Conjunctive Rule :- Minimum standard is set for eachattribute and then fast and simple elimination is used forselection of best alternatives.