This ppt will show the design management process of any organisation in retail perspective.

1. Design Management
BY: SHAMIK CHAKRABORTY
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2. ROLE OF WINDOW DISPLAY IN MODERN RETAIL
DEFINITION: WINDOW DISPLAY IS THE FINE ART OF DISPLAYING STORE MERCHANDISE IN THE STORE
WINDOW. RETAILERS ARE RECOGNIZING THE IMPORTANCE OF WINDOW DISPLAY AS THE FIRST POINT OF
CONTACT BETWEEN THE STORE AND THE CUSTOMER AND A CHANCE TO CREATE THE MOST CRITICAL FIRST
IMPRESSION ON THE CUSTOMER.
IMPORTANCE OF WINDOW DISPLAY:
 IT DEFINES THE STORE AND GIVES AN IDEA OF WHAT THE STORE IS ALL ABOUT TO THE CUSTOMER. IT
DETERMINES WHETHER THE CUSTOMER WILL WALK INTO THE STORE OR WALK AWAY FROM IT.
 WINDOW DISPLAY CAN CONVEY WHAT AGE GROUP OR INCOME GROUP OF CUSTOMERS THE STORE
CATERS TO.
 WINDOW DISPLAY MAKES THE DECISION MAKING PROCESS OF THE CUSTOMER RATHER SIMPLE.
 WINDOW DESIGNERS ARE NOW EXPERIMENTING WITH CONCEPTS TO TRY TO ATTRACT AND HOLD THE
ATTENTION OF THE CUSTOMERS. ONE OF THESE CONCEPTS IS THE USE OF SMELL.
 SIMILARLY, APPAREL RETAILERS ARE ALSO MAKING USE OF THE FRAGRANCE OF FRESHLY LAUNDERED
CLOTHES IN DESIGNING WINDOW DISPLAYS. SOME RETAILERS ARE MAKING USE OF MOTION TO
ATTRACT CUSTOMERS.
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4. VM- A TOTAL OF SUCCESS IN MODERN RETAIL
VISUAL MERCHANDISING IS THE PRACTICE IN THE RETAIL INDUSTRY OF DEVELOPING FLOOR PLANS
AND THREE-DIMENSIONAL DISPLAYS IN ORDER TO MAXIMIZE SALES.
BOTH GOODS AND SERVICES CAN BE DISPLAYED TO HIGHLIGHT THEIR FEATURES AND BENEFITS. THE
PURPOSE OF SUCH VISUAL MERCHANDISING IS TO ATTRACT, ENGAGE, AND MOTIVATE THE CUSTOMER
TOWARDS MAKING A PURCHASE.
CONTRIBUTION TO RETAIL BRAND STRATEGY
THE DESIGN OF THE STORE SHOULD REFLECT THIS AS PART OF THEIR RETAIL BRAND STRATEGY. THIS
INCLUDES THE IN-STORE ENVIRONMENT AND BRAND COMMUNICATIONS USED SUCH AS SIGNAGE AND
IMAGES DISPLAYED IN-STORE.
THESE VISUAL ELEMENTS ALL PLAY A PART IN BUILDING A RETAIL BRAND AND THEREFORE THEY HELP A
BRAND DIFFERENTIATE ITSELF FROM ITS COMPETITORS, CREATE BRAND LOYALTY, AND ALLOWS FOR A
BRAND TO PLACE PREMIUM PRICING ON THEIR PRODUCTS.
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5.  METHODOLOGY
 Techniques
The physical environment is a primary objective in communicating with customers in retail. Research from Thaler
shows that consumers are more willing to pay a higher price for a product if the product is purchased in a more
favourable environment.
As methods of visual merchandising can be used color and style, symmetry and rhythm, face and side
presentation etc.
Visual merchandising consists of mainly two techniques; interior and exterior displays, also known as in-store
design and window displays.
In-store design and window display techniques can be used to enhance the store environment, influencing
consumer behaviour and purchasing decisions. In-store design is a technique, which can be used to enhance
the atmosphere of the store and the overall store environment. Having a visually appealing store design can
simulate the representation of the brand and attract customers.
The window design technique is a way of communicating with customers, which uses a combination of lighting,
colours, props, text, and graphic design to display goods, attract the attention of the customer, and sustain a
brand image. The overall goal of the window display for the retailer is to persuade the customer into the store
and motivate purchasing.
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6.  INTERIOR DISPLAYS
 In-store visual merchandising can be used to capture the attention of consumers
whilst they are in the store
 To capture the attention of the customer, the retailer must consider the customer's
needs during this process
 Factors that contribute to the overall in-store design include:
1. The store layout,
2. Store design,
3. Point of purchases displays,
4. Item display,
5. Assortment display, and
6. Signage
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7. EFFECTIVE AD CAMPAIGN
When a company has a product or service, it is vital that potential consumers learn
about the new offering. The company then has to go a step further and entice the
customer to buy the product or service.
For advertising to be "effective," it must be:
1. Memorable
2. Resonate with consumers by ringing true and delivering a personally meaningful message, even if the brand has a
huge target audience like Nike's
3. Communicate how the product or service fits into consumers' lives or work to make them better, more productive,
happier, more fulfilled
4. Stand for values above and beyond the product or service itself
5. Be inextricably linked to the brand, so the ad won't be attributed to a competitor
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8. STORE PLANOGRAMS & ITS BENEFITS
A planogram is a visual diagram, or drawing, that provides detail where every product in a
retail store should be placed. These schematics not only present a flow chart for the
particular merchandise departments within a store layout but also show which aisle and on
what shelf an item is located. A planogram should also illustrate how many facings are
allocated for each SKU.
Planogram Purpose
Product placement and improved sales are just two very basic reasons a retailer should be
implementing planograms in their shops. Planograms provide many other positive benefits as
well:
 Assigned selling potential to every square foot of space
 Satisfying customers with a better visual appeal
 Tighter inventory control and reduction of out-of-stocks
 Easier product replenishment for staff
 Better related product positioning
 Effective communication tool for staff-produced displays
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10. RETAIL 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.
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11. 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
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12. MICRO MERCHANDISING:
Retailer adjusts shelf space allocations to respond to customer and other differences amongst the local
markets. Data mined through the data base. E.g. space for cereals for adults.
Cross merchandise: carries complementary goods and services to encourage shopper to buy more.
E.g. apparel stores and accessories (shirts and scarves, fry pans and scrubbers).
MERCHANDISING PLANNING:
Role of Merchandise Manager
• Planning : Policy formulation, forecasting sales for budget period, estimate consumer demand and
impact of changes occurring in retail environment
• Directing: Guiding and training of buyers
• Coordinating: coordinate buying effort of many buyers and fit into stores image
• Controlling: assessing buyers performance
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13. TYPES OF MERCHANDISE:
• Staple: regular products carried Eg milk, eggs, bread
• Assortment: Apparel, furniture
• Fashion : Products which have a cyclical sales due to changing tastes and lifestyles
• Seasonal: change according to seasons E.g. AC
• Fad: high sales for a short period of time E.g. Harry Potter
TYPE OF STOCK PLANS:
• Basic stock list: specifies the inventory level, color, brand, style, category, size, pack etc
• Model Stock plan: project no of specific items such as no of red, green and blue sweaters.
Items are ordered according to popular size and colors
• Never out stock plan: enough products so that they are not out of stock
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14. PLANNING PROCESS:
• Done in advance, time to buy merchandise , have it delivered and send it to stores
• Analysis of consumers needs and wants, consumer buying process, sale of high selling
products,interaction with sales staff ,analysis of external sources of information
• Steps: 1. Developing a sales forecast 2. Determining a merchandise requirements 3. Merchandise
Control- The Open to Buy 4. Assortment Planning
ANALYSIS AND DEVELOPING THE SALES FORECAST:
• Forecasting involves what a consumers may do under a given set of conditions
• Determines the inventory need for the product or category
• Based on targets given by top management
• Typically answer : How much, new products, price?
• Made for a specific time period ie weeks, season short term or long term
• Aware of the changes in tastes and attitudes of the consumers, size of target market and changes in
spending patterns
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15. ANALYSIS AND DEVELOPING THE SALES FORECAST
• Process:
o Reviewing past sales.
o Analysing the economic conditions: direct link to consumer spending patterns.
o Analysing the sales potential: demographic changes in market and products to be sold o The
marketing strategy of the competitors.
o Creating the forecast: estimate.
DETERMINING THE MERCHANDISE REQUIREMENTS
• Planning at Merchandise takes place at two levels: The creation of merchandise budget - The
assortment plan
• Merchandise budget: financial plan as to how much to invest in product inventories in monetary terms
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16. MERCHANDISE BUDGET
• Sales plan: how much of each product needs to be sold, dept wise/storewise etc
• Stock Support plan: How much of inventory is needed to achieve those sales • Planned reductions:
incase of product not selling
• Planned purchase level: Qty of each product that needs to be procured from the market
• Gross margins (diff between cost of goods sold and sales) that each dept contributes to the overall
profitability
METHODS OF INVENTORY PLANNING
• The Basic Stock Method
• The Percentage Variation Method
• The Week’s Supply Method
• The Stock / Sales Ratio Method
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17. BASIC STOCK METHOD:
• Retailer believes that it is necessary to have a given level of inventory at all times. Min amt of inventory
that needs to be maintained for a product ,category or store even during times of low sale
• Basic Stock = Avg. stock for the season – Avg. mthly sales for the season where,
• Average Monthly Sales for the season = Total Planned Sales for the season / No. of months in the
season
• Avg. stock for the season = Total Planned Sales for the season/Estimated inventory turnover rate for
the season.
• BOM(Beginning of month) Stock = Planned Monthly Sales + Basic Stock.
THE PERCENTAGE VARIATION METHOD
• Used when the stock turnover rate is more than 6 times/year
• Basic premise is that inventory levels should reflect the actual sales
• BOM stock = Avg stock for the season x ½ [1+planned sales for the month / Average Monthly Sales ]
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18. WEEKS SUPPLY:
• Followed by grocers who follow inventories weekly, and whose sales don’t fluctuate substantially The
Week’s Supply Method is calculated as under: No of weeks to be stocked = the number of weeks in the
period / Stock turnover rate for the period Avg weekly sales = Estimated total sales for the period / The
no. of weeks in the period BOM Stock = Avg weekly sales x no of weeks to be stocked.
STOCK TO SALES RATIO METHOD:
• This method is very easy, however requires the retailer to have a beginning of the month stock/sales
ratio. This ratio tells the retailer how much inventory is needed for the month.
• Stock to Sales Ratio = Value of Inventory / Actual sales
• Planned BOM Inventory = Stock – Sales Ratio x Planned Sales
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19. THE STOCK TURNOVER RATE:
• An effective measure at which products or merchandise moves in and out of retail store at a given
period
• Stock Turnover Rate = Planned Sales ( for the period) / Planned Average Inventory ( for the period)
SIX MONTH MERCHANDISE PLAN:
• Done after a inventory plan, merchandise plan
• This plan is prepared for six months
• Merchandise budget should be prepared in advance of selling season
• Easy to understand
• economy is changing, plan for 6 months
• Flexible budgets
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20. THE SIX MONTH MERCHANDISE PLAN:
Six Month Merchandise Budget M1 M2 M3 M4 M5 M6 Total BOM Last Year Plan Revised
Actual Sales Last Year Plan Revised Actual Reductions Last Year Plan Revised Actual.
Depends on the sales for the month & reductions, merchandise buying can be adjusted.
• Maintains relation between stock and sales
• Controlling the money to buy – The Open to Buy
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