A Beginner’s Guide to Merchandise Planning
Retail Merchandising Planning 101: How to make sure your stores give customers what they want
You’ve probably heard the old adage, “the customer is always right.” Well, there’s a good chance it was a merchandising planner who came up with it.
Merchandising is the science of aligning retail stores and their products with customer needs and preferences. Looking at this definition, it might sound pretty basic. But don’t be fooled. Merchandising is complicated stuff, and in this article, we’ll only attempt to give you a beginner’s introduction to the processes and strategies involved.
For deeper insight, your best bet is probably contacting a retail management and merchandising company. For example, the planning experts at The Revenue Optimization Companies (T-ROC) are more than happy to provide a free consultation on ways to drive sales through merchandising, marketing and other retail solutions.
Who’s planning your merchandise strategies? Are you sure your product mix matches customer demand? Have you taken the time to seriously evaluate your merchandising on a store-by-store level? The right retail management partner can help.
Merchandise Is A Core Financial Investment
The Right Planning Is How You Make The Right Moves. One of the most important reasons merchandise planning is so essential for a retail business is pretty simple – your products are one of your biggest investments. If you don’t get your merchandise right, then every program you put in place to support it is also bound to be full of holes.
Think about it this way. What good are stores and displays full of quality products, if they’re not the products your customers need? What you’re certain to end up with are shelves full of merchandise that you spent a lot of money to procure met by customers with at best a lukewarm interest in purchasing them.
Now, you face an all-too-common merchandising supply and demand dilemma. Not only have you invested in a less than optimal product inventory, you still have to find ways to move it. This usually means offering dramatic price reductions to prompt sales, or marketing programs that become nothing more than blanket markdowns, which very well might diminish the value of shopping at your stores. Worse, customers may find your competition has the products they need and decide to switch altogether.
The point is, planning your product inventory around the merchandise your customers want is the cornerstone of retail success.
Six key considerations when planning your merchandise mix.
- Are you clear on demand? Do you really understand what your customers want in terms of merchandise? Have you pulled customer, environmental, traffic, and sales data or research to validate your retail model and product offerings?
- Product assortment. What products have the best margins? What key items are essential to your success? Are their complimentary products to add to your merchandise plan? Does your merchandise selection present a distinct advantage compared to that offered by your competition?
- Sell thru/turnover. How well are you able track sales against inventory in every one of your stores? Do you get this information in a timely enough manner to react and adapt quickly, stocking each store with the merchandise that’s generating sales?
- Inventory management. How effectively are you streamlining the inventory process. Have you found that perfect balance between having the right merchandise in stock without being bogged down and spending too much on stocking excess product?
- Regional factors/seasonality. If you operate retail stores in different locations, how effectively are you accounting for variances in seasonal demand, customer demographics, regional/geographic needs, traffic patterns, etc. Every location is unique. How well do you understand the differences?
- Realistic and defined goals. Do you have clear goals in terms of sales figures. Are future expansion plans in place? Have you created measurable marketing and merchandising programs in order to reach these goals?
Is it time to re-examine your merchandising planning efforts? Want to hear an example or two of successful programs in action? Contact The Revenue Optimization Companies (T-ROC) to learn about solutions that are changing the game in retail.
The Right Insights – The Secret To Successful Merchandise Planning
Every solid merchandising program is grounded in reliable and actionable information. In fact, nothing is more important when building your strategies than having instant access to all the factors that determine customer demand and drive sustainable sales.
In today’s world of burgeoning retail technology, often referred to as Retail 4.0, that means leveraging powerful new data solutions, like those offered by T-ROC, to gain a truly deep understanding of your customers, retail operations, product inventory, store environments, the competition and more.
“We’ve seen a revolution in retail technology in recent years,” says Brett Beveridge, Founder and CEO of The Revenue Optimization Companies, “At T-ROC, we’re working at the forefront of it to provide our clients with a level of visibility into customer behavior and their own retail operations that’s really remarkable. We capture and distill not just any data, but the right data, the most relevant data, into insights that we use to drive merchandise planning, pricing, marketing and promotions, customer engagement, training, inventory management, essentially, every area that impacts sales.”
How does your company use insights to plan stores and price merchandise? Retail is changing. Are you keeping up?
Using Advanced Retail Technology To Drive Merchandising And Sales
If we can all agree that retail is being driven by data and insights, the question then becomes, “how do you obtain yours; how do you know it’s the right data; and how do you make it work for your business?”
Capitalizing on today’s advanced technology, quite frankly, requires an understanding well beyond a “beginner’s guide” to merchandising and product planning. In fact, digital data capture and other leading-edge solutions tend to be well beyond the core competencies of most retail businesses. That’s why so many choose to partner with a retail technology expert who can help them build an effective merchandising and operations program using the latest digital tools.
At this point, however, let let’s take a look at some of the primary reasons a strong data strategy is so important to merchandising planning:
New digital breakthroughs in intelligent data capture, AI, in-store sensors, and autonomous robots are providing companies with insights into how their customers shops, the products they prefer, the time of day they like to visit stores, and so much more. This is a huge advantage when it comes to store planning. After all, the more you know about customers, the easier it is to provide merchandise and experiences that will drive sales.
One of the biggest challenges to effective merchandising is managing inventory. Again, this is where technology can prove to be a huge competitive advantage. Today’s digital solutions allow for real-time visibility into store and inventory conditions on a per location basis. Identify top sellers and struggling products to adjust inventory accordingly. Examine sales versus variables like geographic region, store location, time of day, and other factors for a better understanding of inventory requirements drilled down to individual stores.
Examining today’s data is an effective way for retailers to predict future trends and opportunities. Often clear purchasing patterns are revealed that can be used to plan more confident and calculated merchandising and product programs down the road.
Do you incorporate digital solutions into your merchandising strategies? Or, are you lagging behind the technology curve? Learn more about Retail 4.0 and how it can impact performance – store by store and across your operations.
Merchandise planning is a complicated process with more challenges and nuances than you can imagine. The good news is, retailers don’t have to go it alone. Leading merchandise and management companies are bringing new digital data solutions and advanced technology to the party.
Companies like T-ROC are redefining merchandising and retail operations with sales solutions built around individual brand, retailer and store needs. These solutions leverage the power of people and technology, while also adhering to a proven set of best practices, in order to optimize every area of merchandise planning – store appearance, merchandise selection, product display, inventory management, price determination, and much more.
If this sounds like an approach that might help your business perform better and sell more, you’re invited to dig deeper at www.trocglobal.com. Also check out our retail merchandising consultants and visual retail merchandising page for more information.
To find out more ways to succeed and drive sales, check out our post on How to Make an Aisle End Cap Display that Drives Sales. TROC is the leading provider of premier staffing outsource, software, managed technology services, and consumer insights for the top global brands, retailers, manufacturers, service providers, and distributors. The company’s distinctive solutions address the entire lifecycle of brick and mortar brand and retail operations by combining retail expertise, best practices, and technology to help its customers achieve sales and operational excellence as well as a sustainable competitive advantage. As a Retail 4.0 thought leader, T-ROC enables companies with high-value products in the physical world to thrive through the digitalization of the physical shopping experience. To learn more about T-ROC, visit www.trocglobal.com.