Page 128 - DMGT554_RETAIL_BUYING

Unit 9: Buying Decisions

9.3 Buying for Retail Stores Notes

Beginning with the turn of the century and continuing for many years, retailers and buyers for
retail stores (retail purchasing) concentrated all of their buying efforts on the selection of
merchandise items they thought their customers would like and would purchase. These buyers
were product-orientated. It was called subjective retailing because the buyer based the buying
decision on a personal view of the likes and dislikes of customers.
Within recent years the consumer movement (consumerism) has forced a change in the retailer’s
buying efforts from a subjective attitude to that of an objective one. The retailer now has to
measure the likes and dislikes of the customers before a buying decision can be made. The buyer
has to be consumer-orientated. Retailing has entered into the new era of the marketing of
merchandise.

9.3.1 Marketing Approach

It was now necessary to obtain the answers, through research and study, to the where, who,
what, when and why of the consumer’s buying habits and choices. The “where” refers to the
trading area from which the retailer attracts its customers. The “who” refers to the demographic
descriptions of these customers which provide a profile of the potential customers. The “what”
refers to the types of merchandise these potential customers want to buy and, therefore, want
the retailer to stock. The “when” refers to the part of the year when the customers make their
purchases. The “why” refers to the psychographics of the customers which reflect their varied
life-styles and the projection of these life styles into purchasing habits.
As a result of this consumerism, the small retailer and the buyer for the larger store has had to
learn the significance of a new vocabulary to successfully affect this marketing of the merchandise
approach. The new vocabulary includes such phrases as: target group, an understanding of the
wants and needs of the consumers the retailer has selected to serve; the marketing positioning,
the merchandising policies the retailer has established upon which to develop a reputation as a
price, value, quality, assortment, and fashion leader; market penetration, the extent to which the
retailer has succeeded in interpreting and satisfying the merchandise wants and needs of the
target group; the new tools, the new approach of marketing the merchandise requires a
knowledge and understanding of the tools necessary to effectively buy for retail stores; and, the
merchandise plan which is a timetable of merchandising objectives to be achieved within a
stated time frame to ensure that your planned market positioning and market penetration are
realized.

9.3.2 Merchandise Plan

The plan is applicable to all forms of retailing at all sales levels. It is most often a six-month
merchandise plan but there can be time frame variations depending upon the merchandise.

!
Caution The first six-month plan includes February-March-April (spring) and May-June-
July (summer).

This plan is prepared and finalized in the previous August to permit early buying of imports
and other merchandise. The second six-month plan includes August-September-October (fall)
and November-December-January (winter). This plan is prepared and finalized in the previous
February for the same reasons stated above.

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