Understand the preparation of fashion merchandise buying plans. FM 2.02 Understand the preparation of fashion merchandise buying plans.

Role of Retail buyers in the fashion industry Responsible for selecting and purchasing goods for their companies. Could be a specific department or classification Could be for an entire retail store ALWAYS consider company image and watch activities of competitors. Must make a profit for the company when the goods are sold. Estimate future demand for merchandise for the target clientele of their stores, catalogs, websites, etc. Determine the quantities and timing for various styles, colors, sizes, prices, and fashion emphasis.

Role of Retail buyers in the fashion industry Follow company policy as to breadth and depth of stock while trying to make the highest possible profit. Notice changes in people’s living patterns, preferences, and tastes. Correctly “reading” customers’ tastes involves skill and practice. Recognize what people want, when they will want it, and what they will be willing to pay for it. Predict quantities the market can absorb. Accurately forecast what merchandise will appeal to their customers.

Difference between internal and external information used for merchandise planning Internal information can be found within a retail company. Internal examples: Company Merchandising Bureaus Purpose: forecasting fashion trends to assist the buyer Uses: standards and testing labs to check if merchandise meets company standards Ex. Bureau working with a group of retailers to determine a quality check of certain merchandise.

Internal examples: Sales Records (stock, sales, ratio or stock turnover) Purpose: to show increase or decrease in sales Uses: items in growth or decline phase. Media, PR, or weather impacts on sales Ex. Increased sales due to a current sales promotion. Sales People Purpose: provide personalized information for customers Uses: sales process steps provide opportunity to increase sales while providing great customer satisfaction Ex. Sales person assisting a bride and court in the wedding gown and bridesmaid dresses

Internal examples: Want Books Want Slips Purpose: logs completed for customer inquiries about out of stock items or products not carried Uses: identify potential new products, preferred product assortments, and current stock deficiencies Ex. Salesperson makes a log entry about a new brand of jeans that customers continue to want but the store doesn’t carry them. Retail buyer needs to order Want Slips Purpose: slips completed for customer inquires about out of stock items or products not carried Uses: identify potential new products, preferred product assortments and current stock deficiencies Ex. Completed for customer and submitted for buyer to order or reorder

Difference between internal and external information used for merchandise planning External information can be found outside the retail company. External examples: Comparison Shoppers Purpose: mystery shoppers hired to gather intelligence on competitors and own store Uses: depth of assortments, prices, ambiance, services, media selection, and quality of salespeople Ex. Mystery shopper goes into Belk and visits 3 departments tracking the level of service provided.

External examples: Consumer Opinions and Behaviors Purpose: to stay in touch with the market Uses: surveys, panels, customer counts, and sample products Ex. Focus group to gain information about a new line of cosmetics Reporting Consulting Services Purpose: expert guidance for forecast planning Uses: Assist buyer in merchandise selection Ex. The Donegar Group provide a report on upcoming trends to the merchandise department

Resident Buying Offices External Examples: Resident Buying Offices Purpose: expert buying services Uses: developing merchandise plans Ex. The Donegar Group prepares the merchandise plan for their client/retailer Trade Information Purpose: information from trade associations, shows or publications Uses: networking, competitive analysis, and market research Ex. Attending a trade show and observing the vendors to complete a competitive analysis

Vendors Purpose: suppliers of merchandise External Examples: Vendors Purpose: suppliers of merchandise Uses: provide product information, market knowledge, and information on other retailers Ex. Questioning a vendor about the different retailers that sell a particular product

Financial and merchandise assortment influence fashion buying plans Buyers plan balanced proportions of styles, colors, sizes, and price points. A fashion assortment lists each item by SKU number, including size, price, and color. An assortment plan for a store with branches indicates what specific items are allotted to each branch store. The goal is a balanced assortment (an ideal stock situation) which has sufficient items to meet demand with breadth and depth to satisfy all customers.

Financial and merchandise assortment influence fashion buying plans Merchandise assortment plans: Basic stock plan: Proposed purchase list composed of commodity goods, such as blue jeans, underwear, and men’s dress shirts. These are basic items with consistent demand, dependable, and quite predictable.

Financial and merchandise assortment influence fashion buying plans Model stock plan: Mostly fashion merchandise. Includes items that have strong customer appeal for a limited time. Always changing as fashion rise and then fall out of favor. Demand is harder to predict. Deals with unpredictability and higher risk. More likely the goods will have to be lowered in price to clear the inventory.

Financial and merchandise assortment influence fashion buying plans Financial assortment plans: Dollar merchandise plan: Estimated dollar amount for planned, stock, sales, and profit for the department for a six month period Two periods are February – July and August – January. Based on analysis of last year’s plan and results.

Financial and merchandise assortment influence fashion buying plans Stock-to-Sales ratio: Shows dollar sales volume in relation to the dollar value of average inventory Determines stock needed at the beginning of each month based on past sales figures of how fast the particular items of a department or category sell. Related to stock turnover. Indicates an average figure for a certain time span. Guides to help estimate the amount of stock required in relation to sales.

Financial and merchandise assortment influence fashion buying plans Open to buy: Dollar or merchandise unit amount buyers are permitted to order for their stores or departments for a specified time period Controlled device, calculated weekly or monthly. Purpose is to maintain the proper mix and level of goods. Available OTB is what can be spent or number of items that can be purchased at the current time. Present inventory and goods on order are deducted from the original allocation of planned purchases to arrive at the amount.

Types of merchandise resource used in selecting vendors Manufacturers Wholesalers Websites Catalogs (paper or video) Importers

Selecting Merchandise Resources Chapter 15 Selecting Merchandise Resources Wholesalers purchase large quantities of goods from manufacturers, store the goods, and then sell small quantities to retailers. They are used mostly for convenience goods. Websites and catalogs are used to source goods, usually basic items. Sales catalogs contain item photos or drawings and sometimes fabric swatches. “Video catalogs” may be sent on CDs.

Chapter 15 Importers Importers’ merchandise is produced overseas, usually in countries with low wage rates. The goods are sold through showrooms in the American market. Foreign producers sometimes have agents in this country that take orders. Mass merchandise retailers buy a great amount of foreign goods from overseas manufacturers.

Evaluating Vendor Attributes Chapter 15 Evaluating Vendor Attributes A vendor’s merchandise must be suited to the retailer’s customer group, price, quality, fit, and fashion level. Business policies must be compatible. Vendor services might include training of salespeople and promotional assistance. To maximize vendor services, the concept of floor- ready merchandise (FRM) is often specified.

Chapter 15 Vendor Services FRM means that items shipped to the store are ready to go directly onto the selling floor without additional preparation. Turnaround time for orders is an important consideration. Buyers keep files on vendors used through the years with contact information and notes on performance.

Selecting Specific Resources Chapter 15 Selecting Specific Resources Buyers should establish a well-selected group of vendors while being alert for new sources. Key resources or preferred vendor lists are developed for each category of goods. Classification resources are vendors that specialize in certain products. A company must consider the number of resources needed to achieve its goals.

Selecting Specific Resources Chapter 15 Selecting Specific Resources Buyers should regularly determine if their vendors are keeping pace with ever-changing customer buying patterns. A new, efficient method is “e-sourcing” through global online networks to which vendors and retail buyers subscribe. Buyers can send e-mail requests to many manufacturers of specific types of goods.

Product Breadth, Depth and Assortment Product Breadth: the variety of product lines that a store offers. Product Depth: the number of each item or particular styles that you carry of a particular product. Product Breadth + Product Depth = Product Assortment The product breadth is the number of product lines, while the product depth is the variety within each of those lines. Ex: The retail store stocks only 10 varieties of bathing suits(the breadth), but they may stock 15 colors and styles (the depth) of each of those bathing suits.

Brand name vs. private label Brand Name: a name given by the maker to a product or range of products, especially a trademark. Ex: Vineyard Vines Private Label: designating a product manufactured or packaged for sale under the name of the retailer rather than that of the manufacturer. Ex: Gap