2. Objectives
To demonstrate the importance of a sound merchandising
philosophy
To outline the considerations in devising merchandise
plans: forecasts, innovativeness, assortment, brands,
timing, and allocation
To discuss category management
• To study various buying organization formats and the
processes they use
3. Retail Merchandising
Definition & the Concept of Retail
Merchandising
Role & Responsibilities of a Merchandiser
Fashion Merchandising
Merchandise Characteristics
Merchandise Management- Merchandise Mix &
Merchandise Budget
Basics of Merchandise Accounting
4. RM - DEFINITION
Retail selling effort that is the principal task of in-store sales personnel through the
use of promotions designed by a manufacturer, such as unique displays, giveaways,
or discount and premium offers. In this case, merchandising is the act of managing
and arranging the merchandise on display in a store so as to promote its sale.
5. Role & Responsibility of Merchandiser
Planning
Directing
Co-ordinating
Controlling
7. Functions of Merchandisers at Shopper’s stop
Inventory-turn Management
Achieving Sales & Margins
Plans Merchandise
Availability Management, as per range plan
Merchandising strategy & planning
Processing of purchase orders
Analysis of Data & Sales Budgeting
Profitability Targets & Expense Control
Vendor/Supplier relations for both, in-house products as well as for
brands.
10. Merchandising arrangement
MERCHANDISING ARR
ANGMENT………
Why making effective use of your space is so important.
How to position your departments and products.
How to improve store lighting.
The importance of atmosphere and cleanliness in your store.
How to create great displays and signage.
W
HAT W W
E ILL ACHIEVE AS A BUSINESS……….
The consistently best Display standards against Competition in India
A great environment that will attract & satisfy Customers
Showcase to best advantage our product offer
Dramatically enhance Customer Service
11. Managing the Merchandise
Developing a sales forecast
Determining the merchandise requirements
Merchandise control
Assortment planning
12. Developing Sales forecast
Reviewing Past sales
Analyzing the changes in Economic Conditions
Analyzing the changes in the sales potential
Analyzing the changes in the marketing strategies
of the retail organization and the competition
Creating the sales forecast
13. Forecasts
These are projections of expected retail sales for
given periods
Components:
Overall
company projections
Product category projections
Item-by-item projections
Store-by-store projections (if a chain)
19. The Balance Sheet
The Balance Sheet is a statement of an
organization's Assets, Liabilities and Owners’
Equity at a Particular Point in time.
Assets
Liabilities
Owner's Equity
20. Assets
Assets – Owned by an organization
a. Short term (or) Current Assets
b. Long term
21. Liability
Liability: Debts owed by an organization
Payment on Short term
Ex: Payment to supplier
Payment on Long term
Ex: Mortgage on Land &
Building
Investment on Extension,
Expansion &
renovation
22. Owner’s Equity
Owner’s Equity : Difference between asset and
Liability.
Relationship:
Assets = Liabilities + Owner’s Equity
24. Income statement
Profit performance for a specific period of time
Income statement is otherwise called Statement of earnings or Profit
& loss statement
Income statement:
Revenue – Expenses = Net Income
Profit = Expenses < Revenue = positive Net Income
Loss = Expenses > Revenue = Negative Net Income
25. Income statement
Income statement can be computed for an entire organization
contd…
Individual Store
A Group of Store
Department
Profit and loss is based on the revenue & expenses directly associated
with each unit of business.
26. Income statement
contd…
Components : 5 major components
Revenue
Cost of goods sold
Gross margin
Expenses
Net Profit
Relationship among the components
Net revenue
–
Cost of goods sold - Expenses
Gross margin
Net Profit
27. Income statement
contd…
Relationship among the components
Net revenue
–
Cost of goods sold - Expenses
Gross margin
Net Profit
Net revenue : composed of sales, Leasing or renting property or
interest on accounts
Net sales = Gross sales – Customer return
Gross sales are used to determine the customer return rates
Customer return rate = Customer returns x100
Gross sales
28. Income statement
contd…
High customer return rate is often indicates of issue related
a. Customer service
b. Quality
c. Fit of merchandise
High sales attest to the ability of an organization buyer to
select assortments of goods that are appealing to the store’s
target customers.
29. Income statement
contd…
Cost of goods sold (or) Cost of Merchandise sold (or)
cost of sales
Cost of goods sold = Billed cost of Merchandise +
work room costs +shipping cost – cash Discount Returns to vendors
30. Income statement
contd…
Shipping cost : Delivery cost for transporting goods
from supplier
Workroom costs: activities that prepare
merchandise for sale ( steaming & pressing apparel)
Return to vendors : defective or slow selling goods
returned to suppliers for credit
Cash discounts : Invoice concessions from suppliers
for prompt payment
31. Income statement
contd…
Expenses: Payroll, rent, Utilities, advertising and
interest on debt.
Direct Expense: attributable to a specific unit
( store rent )
Indirect Expense: is not attributable to a specific
unit. ( news paper advertisement )
32. Income statement
contd…
Gross margin : Difference between sales and cost of goods sold.
Net Income : Gross Margin – Expenses
Income can be increased by Increasing sales
Increasing Gross Margin
Decreasing cost of goods sold
Any combination of above
Component Percentage :
Cost of goods sold = cost of goods X 100
Net sales
Gross Margin = Gross Margin X 100
Net Sales
Expenses = Expenses X 100
Net Sales
34. GMROI
Gross Margin Return on Investment
Integrates
two performance
Gross Margin
Turn Over
To create a single measure of performance
GMROI = Gross Margin X Net sales
Net Sales
Average Inventory
GMROI = Gross Margin / average Inventory
35. Key terms
Assets
Balance sheet
Cash discount
Cash Flow
Component Percentage
Cost of goods sold
Current ratio
Expenses
Factor
GMROI
Gross sales
Income statement
Liability
Net Income
Net Loss
Net Sales
Return to Vendor
Owner’s Equity
Time Series Comparison
Workroom cost