Session Merchandising
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Transcript of Session Merchandising
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8/12/2019 Session Merchandising
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Madhumita Mohanty
Merchandising & Buying
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ROLE OF MERCHANDISING
A Merchandisers/Category Managers role in a Retail
organization is akin to a product managers in a
FMCGcompany.
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CATEGORIES IN RETAIL
Staples / Groceries
Processed Food
Beverages/Drinks
Personal Care
Non Food/ Cleaning
products
General Merchandise
Fruits & Vegetables
Dairy
Ladies wear
Ethnic
Western formal
Western casual
Mens Wear
Formal
Casual
Semi formal
Kids wear
Infant
BoysAge group
Girlsage group
Food retailApparel
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CATEGORY MANAGEMENT
Definition
The process of managing items in a product category as a
Strategic Business Unit by determining
pricing
merchandising
promotions
product mix
based on category goals, the competitive environment and
consumer behaviour.
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CATEGORY MANAGEMENT
Category consists of a group of SKUs addressing similar
needs of the consumer
Products in a category should be inter related or substitutable Role of logistics/ storage while grouping in a category
E.g.- Processed foodaddresses need for convenient and
fast food
Name is often self explanatory
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THE 2 WORDMANTRA
SALES
RUPEE GROSS MARGIN a.k.a RGM
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SALES / MARGIN PLANNING
HISTORY
CURRENT AFFAIRS
GEOGRAPHY
MATHS
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HISTORY
Why is History important ?
Unless the past is known, the present cannot be
understood or future predicted
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CURRENT AFFAIRS
Knowing how the category / store / product is behaving
Knowing what factors impact sales
Knowing what are the trigger points
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GEOGRAPHY
Whether weathermatters !
Who is your Neighbour ?
Who is planning to be your Neighbour ?
What is the topography ?
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MATHS
Know yourMathwell !
Constant requirement : Analyzing past data to
predict future trends
present requirements
Gap analysis
Comparative Analysis
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Numerical & Analytical
Negotiation
Interpersonal
Decision Making
Quick & Smart Thinking
.. Lastly the most uncommon trait of all
COMMON SENSE !
SKILL SETS
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NEGOTIATION
is the most important word in a Merchandisersdictionary !
He / She is forever negotiating for
CostMargin
Promotions
Trade loads/ QPS
Display Income
Credit period / Payments
Stocks returns
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Space Planning
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Space planning
If there is something more precious than stock in a retail store, it is
space to stock the stock !!
Defined and limited space with pre-fixed # bays, fixtures, display units
Different SKUs have different rate of sale
Defined delivery schedule to storeeither from supplier or from DC
Limited and fixed BOH
New product introductionsfast and furious ! Customers like to find what they want right away !
How to plan for the right space allocation ?
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Spaceplanning
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PLAN-O- GRAM
Definition: Plan-O-Gram is a map of the category as
represented in the store. It gives the position of each SKU in
the store.
Purpose:
Ease of shopping
Ease of display
Aesthetics
Tactical benefits
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PLAN-O- GRAM
Planograms differ significantly by retail sector
Supermarkets largely use text and box based planograms
Apparel brands and retailers are more focused on presentation
and use pictorial planograms
POGs can be of various types
Sales enhancing
Margin enhancingSeasonal
Promotional
Store specific or cluster based
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Blocking and adjacencies management are criticalget rights
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Adjusting allocation of space betweencategories while maintaining the brandimage is a key opportunity area
Grouping the right products together in a
logical and customer friendly manner isvital
Better blocking removes confusion andhelps the customer find what they arelooking for
It also makes the store moreaesthetically pleasing and drives returnvisits
All ti th i ht t f h lf
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Allocating the right amount of shelf space can meanthe difference between Wasted product and LostSales.
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Space allocated to each product hasto be optimized across the availableshelving and depends on
The Pack Size of the productThe Case Size of the product
The Sales Rate of the productThe Replenishment Rate of theproduct.
Assign too little space and the
product will sell out.
Assign too much and you may endup throwing it away, while anotherproduct sells out.
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Where you put the product on the shelf isimportant
Because shoppers are not all the same
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Traditionally Retailers have tried a One Size Fits AllApproach
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One size fits all Planogram
Doesnt fit the specific Store Layout
Planogram ends in the Bin
Store implementssuboptimal shelf layout
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ASSORTMENT
Definition:
Assortment is the process of reviewing a categoryshealth in
terms of Sales and margins. This is a periodic method useful
to weed out non performing products and make way for new
products.
Tool used for this isCRMor Category Role Matrix
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The process of managing items in a product category as a
SBU by determining pricing, merchandising, promotions and
product mix based on
Category goals
The competitive environment
And consumer behaviour.
CATEGORY MANAGEMENT
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Uses category profitability to frame the categories within astore
Other factors are important, but profitability and salesvolume/valueare the most important criteria for managingand measuring category performance.
CATEGORY ROLE MATRIX
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CATEGORY ROLE MATRIX
Flagship Cash Machine Maintain &
Grow
Core Traffic Under Fire Rehabilitate
50 % 80 %
Cumulative Sales (%)
GM%Avg GM %
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NEW PRODUCT INTRODUCTION
Process note
Periodic review mechanism for new products
Reasons can be many
Big Launch by concerned FMCG
Innovative
Big brand
Attractive margin
Good promotions
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PROMOTIONS
Price offers
Value offers
Cross promotions
Bill discount
Scratch / coupon offers
Multi pack promotions
Loyalty programmes
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PRICING
The importance of pricing decisions is growing today
because customers are looking for good value when they
buy merchandise and services.
VALUE is the relationship of what the customer gets to
what she has to pay for it
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PRICING
Retailers have responded to customer needs with
Discount chains/stores offeringeverydaylow prices
(Wal-Mart, Buy nSave stores)
Supermarkets offering a more aggressive pricing strategy
with a large share of products being offered ondiscounts.
(Foodworld, Food Bazaar, More )
Premium storesoffering high quality/service ( Shoppers
Stop, Mom & Me, Mainland China)
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PRICING STRATEGIES
Everyday Low Pricing
The term EDLP is a misnomer, low does not always mean
lowest .
This strategy could more accurately be called everyday same
prices,because prices donthave significant fluctuations.
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PRICING STRATEGIES
High / Low Pricing
This strategy typically describes a sale driven format.
The retailer offers not necessarily the lowest price, but uses
advertising to promote the Sale.
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APPROACHES FOR SETTING PRICES
The 3 different approaches to set prices are
Cost oriented method
Demand oriented method
Competition oriented method
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APPROACHES FOR SETTING PRICES
Cost oriented method
The retail price is determined by adding a fixed percentage
to the cost of the merchandise.
Demand oriented method
Price is based on what the customers expect or are willing to
pay.
Competition oriented method
Price is based on the competitors prices
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TOPICAL PRICING STRATEGIES
HAPPY HOURS
DIFFERENTIAL PRICING - STORE SPECIFIC
DIFFERENTIAL PRICING - PERIOD SPECIFIC
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STOCK MANAGEMENT
Efficient stock management is one of the key parameters
differentiating a successful retailer from a not-so-successful one.
Key is to :
Avoid stock outs
Avoid overage stocks
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STOCK OUTS are an absoluteNO-NOfor any store.
It not only leads to sale loss but also customer dissonance
A good Merchandiser will try and avoid stock outs as far as
possible by end to end tracking of
Fill rates by supplier to warehouse
Fill rates for warehouse to stores
STOCK MANAGEMENT
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OVERAGE STOCKS are equally bad for a retailer. They not only
suck up precious working capital, but also end up as non
saleablestocks on the shelf.
The trick lies in not having paid-up stocks, but managing
the credit period to effectively rotate stocks.
STOCK MANAGEMENT
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Madhumita Mohanty
Thank You