FASHION MERCHANDISING 2.02 BUYING

KEY TERMS assortment breath, assortment plan, buying plans, classification buying, comparison shoppers, complementary products, departmental buying, direct selling, discounts, dollar merchandise planning, floor-ready merchandise (FRM), indirect selling, markdown, markup, merchandise cycle, open-to-buy, retail buyers, specification buying, stock-keeping unit (SKU), stock shortages, stock-to-sales ratio, and stock turnover

ROLE OF RETAIL BUYERS IN THE FASHION INDUSTRY Buyers are responsible for selecting and purchasing goods for their companies.   Could be a specific department or classification Could be for an entire retail store They must ALWAYS consider company image and watch activities of competitors thus making a profit for the company when the goods are sold.

ROLE OF RETAIL BUYERS IN THE FASHION INDUSTRY They estimate future demand for merchandise for the target clientele of their stores, catalogs, websites, etc. and determine the quantities and timing for various styles, colors, sizes, prices, and fashion emphasis.  

ROLE OF RETAIL BUYERS IN THE FASHION INDUSTRY They follow company policy as to breadth and depth of stock while trying to make the highest possible profit. Breadth: Being broad in scope. Carrying items in many different product categories. Offering several different types of service under one roof. Depth: Being intense in scope by immersing your business into an industry or product category. Stocking a focused product mix, a specialized service offering.

ROLE OF RETAIL BUYERS IN THE FASHION INDUSTRY Buyers must notice changes in people’s living patterns, preferences, and tastes.  Correctly “reading” customers’ tastes involves skill and practice.  They recognize what people want, when they will want it, and what they will be willing to pay for it.   They predict quantities the market can absorb and 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: Past sales records Customer feedback to salespeople Want slips Consumer polls Company merchandising bureaus

DIFFERENCE BETWEEN INTERNAL AND EXTERNAL INFORMATION USED FOR MERCHANDISE PLANNING External information can be found outside the retail company External examples: Vendors Trade information (publications, shows, industry statistics) Comparison shoppers Resident buying officers/consulting services Fashion forecasters

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.

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.   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 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 ASSORTMENT 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. Is a figure for a specific point in time. Guides to help estimate the amount of stock required in relation to sales.

FINANCIAL ASSORTMENT 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 RESOURCES USED IN SELECTING VENDORS Manufacturers Wholesalers Websites Catalogs (paper or video) Importers