Page 33 - DMGT554_RETAIL_BUYING

Retail Buying

Notes When expansion takes place into suburban outlets, the population is likely to be different. There
might be single households or married without children, but the more dominant family is the
one with children. With this information in mind, the focus of the store’s merchandise
requirements might differ from those of the downtown flagship.

Merchandise Differences

Department stores generally like to have the branch stores carry a representation of the
merchandise carried by their flagships. However, this might be an impractical approach to
maximize the branch’s profits. While there might be some of the same merchandise as found in
the main store, the assortment might be different. A smaller inventory for career dress and more
merchandise oriented toward leisure might be the wiser choice. Similarly, the flagship might
not focus on products for outdoor living such as garden furniture, whereas this might be a
natural product classification given the nature of the suburban locations. These and other factors
must be considered to make the merchandise assortment appropriate for these shoppers’ needs.

Price Point Variation

Generally, the flagship operation carries a wide assortment of merchandise at many price points,
the major focus of prices that are merchandised by a company. Since, their clientele base is
usually made up of different family income ranges, they must carry an assortment that caters to
all of their needs. In the suburban branches, however, there is often a more homogeneously
grouped population in terms of income. Because of this, the price points must be appropriate for
the needs of that specific clientele. Thus, the merchandise assortment might place emphasis on
higher price points if the population served is more affluent. Merely carrying the same price
points in the same quantities as the flagship store might be inappropriate.
If the buyer regularly visits the branches, firsthand analysis of the variations from one branch to
another can take place. Discussions with the store manager, department heads, and sales associates
may reveal some merchandise price point directions that computerized reports will not reveal.
By making this a practice, it is more likely the merchandising decisions will be wisely made.

Self Assessment

Fill in the blanks:
1. The .................... department store offers a wide assortment of hard goods and soft goods
for the entire family and also features non-merchandise departments.
2. The .................... department store restricts its offerings to a large assortment of one or two
merchandise classifications.
3. In the table of organization, a .................... features a number of different departments as
well as the personnel who carry out the responsibilities that have been assigned to them.

4. The .................... manager serves as a policy maker and operating officer along with the
others in the company who head their divisions.
5. .................... managers act as the liaison between the GMM and the numerous buyers within
their division.
6. The .................... scouts the competitors’ advertisements and inventories to determine if
there are any price conflicts between the companies.

7. In the .................... division, those involved range from the upper levels of the management
team down through the sales associates who interact with the shoppers.

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