Page 110 - DMGT554_RETAIL_BUYING

Unit 8: Merchandise in Retailing

8.1 Merchandise Planning – Central to Profitable Retailing Notes

Moving along the time line closer to the time of range launch, merchandise/range plans become
a key document for buyers and merchandisers, a living document, that captures all key
information as products are developed and data is gathered that ultimately influence buying
price, selling price, store distribution and store position, promotion planning, markdown budget,
supply chain flow, sourcing strategy, rate of sales, etc.

8.1.1 Range Planning

Range planning, from setting the concept, purpose and direction through to selecting the products
and finalizing the price, distribution and sales forecast, is a truly iterative process that typically
involves buying and merchandising working hand in hand, often with somewhat opposing
objectives.

Notes The ultimate aim is for the final range selected to meet and exceed the customers’
expectations.
Additionally, buyers will want the range to be innovative and to really shout the brand values
whilst merchandisers will want it to achieve high rates of sale and deliver excellent margin. Of
course, any range should be constructed such that it can be delivered to the consumers’ baskets
in the most reliable and profitable manner.

8.1.2 Effective Range Performance Measurement – Plan vs. Actual

The Range Plan or Merchandise Plan as they are equally well known, form the basis for the
development of the store/store cluster level assortment plan and in a fully integrated planning
process are the trigger for both the demand planning and visual merchandising processes. A
good range plan also allows the buyer and merchandiser to measure the effectiveness of their
ranges against the original budgets and against plan. It allows for hard and soft constraints to be
applied in operations, such as Open To Buy (OTB), management of intake, delivered margins,
promotional activity and markdown/residuals planning to be undertaken via use of a WSSI.
With such criticality to the business and a dependency on such a wide set of data a quality
merchandise plan/range plan with adequate roll up and drill down capability can really only be
delivered from a quality tool, supported by quality business processes and well trained teams.



Caselet Retail Planning is Complex

uyers and merchandisers have much to consider when developing and planning
the range. Buyers and merchandisers have a lot of questions to consider when
Bdeveloping and planning the range, such as how to provide the customer with:

 the right depth and width of range – ensuring sufficient choice and range
completeness

 the right price architecture – guiding the customer through the options available
Contd...

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