Leading the Way Merchandising 101

Our Mission ZAG is a collection of merchandise buyers for zoos, aquariums and other wildlife-related institutions and attractions. The goals of ZAG are to increase and improve communication between buyers, and to raise awareness and professionalism of the field within the zoo and aquarium industry.

Merchandise Intro All products need to tell a story Everything must be priced or have great signage. What are you trying to sell?

What does your customer see when they enter the store? Watch your customers. Where are you pointing your customers attention? Impulse vs destination purchase habits

Merchandising 101  Merchandising over view  What is GMROI?  Why should I care about my stock turn?  Inventory investment  Improve your inventory  Exit strategy for dead merchandise  The Power of New

GMROI = GROSS MARGIN RETURN ON INVESTMENT #1 Retail Metric - Key indicator for how well inventory is performing. Analyzes inventory at cost against gross profit. How to calculate = Gross margin $/Average inventory at cost What is a good GMROI? Better than last year!

Ways to increase GMROI: Lower the average inventory Increase the gross margin Buyers should consider themselves investors of merchandise.

Inventory Turn/Stock Turn Turn is an annual ratio How to calculate Turn = Cost of Goods Sold/Average Inventory at Cost Why have optimal turn? Have fresh products and good cash flow Cheaper by the dozen - not always if you have to carry the inventory investment too long.

To Improve Inventory Turn Think in terms of TIME 4.0 turn is 3 months of supply… Take Markdowns on a timely basis Unsold product cost $$$ Be diligent and disciplined about reorders on key items & best sellers!

The Power of New 80/20 Rule = 80% of sales are generated by only 20% of inventory. New goods always trump old. Its not how much you have in inventory but how much of inventory is new. Assortment creep: the slow and steady increase of inv levels that does not add to sales. Too much inv is a problem but too little is worse.

Merchandising by Division Retail is the business of recognizing consumer shopping patterns. Example: Our hierarchy: Div/Dept/Class/Item Our plan is by division/dept, example Accessories/Hats Store sales are at the item level, but planning, analysis should be done at the division level. Hierarchy Division needs to be consumer focused.

In Summary  Buyers are investors for the Company  Higher Stock Turn means greater cash flow  Higher GMROI means greater return on investment  New Merchandise always trumps old! Refresh your displays, so that the are always eye catching. DUST!