BUYING CYCLES AND TOOLS OF MERCHANDISING

Fashion BuyingMultifaceted job involving:fashion forecastingrange planningorder sourcing budgeting and marketing.

Refers to key events and processes involved in developing a garment range for a retail or mail ordering company.

Driven by a fixed calendar of trade fairs, fashion shows and events etc.

Traditionally splits into two main seasons:

Spring/ Summer(Feb to Jul) and Autumn Winter (Aug to Jan).

Length of the cycle varies between the companies but usually takes a year.

Season Order Confirmation Order Delivery

FALL December March January April February May

HOLIDAY March June April July May August SPRING June September July October August NovemberSUMMERSeptemberDecemberOctober JanuaryNovember February

An example of the buying cycle for phase 1 Autumn/Winter10 range Task Approximate dateReview of current seasons salesearly August09Budget planningmid- August09Comparative shoppingAugust September09Directional shoppingAugust October09(Fabric sourcing)October09 Range planningOctober November09Garment sourcingNovember09Price negotiation with suppliersNovember December09Final range selectionmid December09Placing orders for rangingDecember January(Product development- samples, testing etc.)January April10Bulk garment manufactureApril July10Delivery of products to retailerAugust10IN STORESAugust October10

Buying ProcessBuyer is always working on two seasons ranges simultaneously.

i.e. while planning a range for the autumn winter season, the buyer simultaneously works on the garment fittings, fabric sample and quality approval of the range for spring summer season.

CONSUMER BUYING BEHAVIOR

Refers to the buying behavior of final consumers -individuals & households who buy goods and services for personal consumption.

Factors Influencing Consumer Behavior:CulturalSocial Personal Psychological Buyer

Review of current seasons sale:The available sales figures reviewed by the buyer to know garment's performance.

The merchandising department compiles a review of previous seasons performance of the range to identify the best sellers and the poor sellers.

The review is known as sales review or range direction meeting.

Budget Planning:Planned by merchandiser.

Based largely on last seasons performance as well as any anticipated developments.

Buyer needs to be far more informed than any other department.

Fast FashionA business strategy aimed to reduce processes in buying cycle and lead time for getting new fashion products into stores in order to satisfy consumer demand at its peak.

Aims at the more fashion conscious younger end of the market.

Buying cycle is usually much shorter than a year.

The response time has to be very quick.

The concept has become mainstay of the UK fashion industry.

The fashion retailers usually introduce new ranges to stores at least once a month.

The bestsellers are retained while the phases are introduced frequently to the stores.

Such ranges, also known as transitional help in filling the gap between one season and next.

This makes the fashion buying environment extremely challenging as the workload for two or three seasons overlaps, leaving no time to pause in between new ranges.

Directional & Comparative Shopping

Directional Shopping Directional Shopping - trips to gain inspiration for design concepts for a new season.

Depending on the product type & the companys travel budget, designers & buying teams visit major fashion cities.

Stores of most influential designers & retailers, usually in a higher price bracket than the market they design for are visited.

They return with bought samples (notes, sketches & garments) for inspiration.

London, Paris & New York are destinations popular with designers for most product types & market levels.

Milan is often visited by lingerie designers.

Childrenswear designers may find more inspiration in Tokyo.

In London, designers usually aim for the major fashion departmental stores like Harrods, Harvey Nichols & Selfridges.

In Paris, the main department stores which stock fashion designer wear are Galeries Lafayette & Au Printemps.

A directional shopping trip to New York usually includes visits to Macys, Bloomingdales & Henri Bendel in Manhattan.

In Milan, La Rinascente is the key department store which is visited.

Buying team visits stores stocking merchandise following different trends.

Most stores visited stock designer ready-to-wear ranges.

They may also visit mass market stores which are aimed at a younger market & or are more expensive than their own range.

Basically the buying team makes notes on shapes, details, colours & fabrics for reference

After this entire exercise a picture can be formed of the key trends which are coming through.

Buying teams are usually given a budget to buy garments during directional shopping trips.

These are generally referred to as bought samples, which typify the trends.

Comparative ShoppingComparative Shopping is often referred to as Comp. Shop.

Usually undertaken several times each season by the buying/design teams.

Involves observing the current merchandise in the stores of competitors which sell comparable ranges (similar product types & prices).

The aim of Comparative Shopping is not to copy competing retailers products.

It is conducted to be aware of the choice of merchandise on offer to target customer to ensure that the company offers consumer value for money & is aware of developments.

Report - sketches & a grid with descriptions of products compared with prices, fabrics & colours of similar merchandise from competing stores.

This report concludes by analysing how competitors ranges compare with each other & noting any important trends or styles which are missing from the companys range.

Range Planning & Selection

Range Planning is the stage when buyers define the detail of the range that is to be offered to the customer in terms of styling, fabric, design details, suppliers and prices.

Final Range Selection involves contacting suppliers, amendments to be made, renegotiating prices and writing range plan

Initial orders are sent and New Line sheets are generated by buyers

Importance To increase sales To offer existing customers new products To attract new customers To offer choice and variety of product To replace products which are not selling well To build on the success of good selling products To differentiate the range from the competition To be in line with seasonal trends To utilize new raw materials, new techniques, or new technology

Business ReviewUnderstanding Cooperative Objectives or Mission

Understanding Corporate Identity

Defining current business position

SWOT analysis under the marketing headings product, price, place, promotion

Defining desired position in terms of sales/profit growth

Importance of knowing the market/trade requirements relevant to your product.

Planning ProcessMarket Research helps create concept boards

Collate the products

Reviewed into themes or ranges

List products in the relevant product group

Group the new product samples into the new colour themes/concepts.

ContdInclude details of the product to be adapted

List according to priority and demand.

Include no. of new products required

Determination of the no of collections to be developed

Identifying starting points for collectionsRetained Products

Raw materials

Innovations

Products to be Adapted

Basic Stock ListHomogeneous

Heterogeneous

Seasonal

Non seasonal

Model StockAssortment of Staple goods

Assortment of Fashion goods

ClassificationPriceSize MaterialColour

Assortment of Seasonal goods

Quantity To PurchasePeriod for which Purchasing is done

Estimated Sales for the Period

Merchandise on Hand and on Order

Desired Merchandise at the end of a Particular Period

Period for which Purchasing is done

Open to Buy [OTB]Controls the Volume of Inventory

Hand to Mouth BuyingToo much price FluctuationsIncrease risk for VendorsIncrease risk of loss in sales

Speculative buying

Quantity discounts

Supply Conditions

Storage Facilities

Estimated Sales for the Period

Changing Business Conditions

Competition

Economic conditions

Unemployment

Fashion trends

Desired Merchandise at the end of a Particular Period

Price fluctuations

Availability of Supply and Materials

Type of Retail Institutions

Availability of discounts

Stage in the Product Life Cycle

Factors Affecting PlanningType of Retail institution

Past Sales Records

Determination of Consumer Wants

Type of goods offered

Elimination of Merchandise Lines

Retail InstitutionsAvailability of capital resources

Trading Area served

Nature of goods carried

Competition represented in the Trading Area

Types of goods offeredFashion goods

Seasonal goods

Convenience goods

Shopping goods

Specialty goods

Elimination of Merchandise linesAttention to stock turnover and rate of salesAvailability of substitutes (staples)No improvement in salesLittle contribution to the sale of other products.

SignificanceFirm Plan is established Reduce the amount of workReduction in the costCreation an action planDesired RevenueManaged Product Development

Time And Action Calendar

IntroductionBasis for all merchandising planning.

It is designed to control the key events needed to get the right apparel products, in the right mix, at the right price to the right customer at the right time.

Also called as Merchandising calendar, Key events calendar or Critical path calendar.

A planning tool.It is the central mechanism from which all marketing schedules and all merchandising and manufacturing plans evolve.

It is the clock that drives merchandising product development schedules, manufacturing planning and shipping schedules.

It sets forth the starting and completion dates for all critical events necessary to achieve a successful season.

The calendar includes information about the name of the buyer, season, style, wash and quantity.

The calendar includes the target dates for each event such as pre production garment approval, lab dip approval, pattern approvals and when graded sates of pattern should be sent out.

The person who is responsible for an event must sign it off in the system when the system has been completed so that everyone can monitor the status of the line development.

Key Elements.Line preview dates by season.

Line release dates by season.

Start ship date

End ship date

Weekly sales plan

Weekly shipping plans

It is the merchandisers deadline for having all prototypes and pricing for a new product line completed.

Merchandisers work back from this date to create their product development plans.

It is the date of seasonal sales meeting where the merchandising team presents the line to the sales force.

Line Preview Date

Line Release DateIt is the merchandisers deadline for having all sales samples ready for the sales team to begin presenting the new line to the customers.

This deadline is crucial to the success of the sales effort, since most sales representative schedule their earliest appointments with their most important customers.

Weekly Sales PlanIt measures the effectiveness of a product line for the merchandising department.

A graphic analysis of this plan can project increase or decrease in overall sales for a season.

Weekly Shipping PlanIt shows season to date as well as shipping statistics for a specific week or monthly time period.

It helps to determine whether or not the product mixes being delivered to distribution meet the shippability.

Determination of Lead TimeCPM is used.

It is the key to a successful merchandising calendar.

It determines the critical functions necessary to perform an activity or series of activities required to achieve an overall objective.

After the critical functions are selected, each one must be analysed to determine the time required to accomplish it.

A typical merchandising calendar may have 25 to 50 functions for a product line.

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FLOW STRUCTURECONCERNED DEPARTMENT

CAD DEVELOPMENTDESIGNER

CAD DESIGN SELECTIONMERCHANDIZER /BRAND

FABRIC DEVELOPMENTPURCHASE TEAM

SAMPLE MAKINGDESIGNER

SAMPLE SELECTIONMERCHANDIZER / BRAND

FABRIC ORDERING FOR SAMPLE/PRODMERCHANDIZER

PREPARING BOOKING SHEETMERCHANDIZER

ORDER RECEIVEDDISTRIBUTORS / SALES MGR

COLLATING ORDERSMERCHANDIZER

PROCESSING ORDERS AS CONFIRMEDSUPPLY CHAIN, PURCHASE

KEEP TRACK ON PRODUCT DISPATCHMERCHANDIZER, SUPPLY CHAIN

MERCHANDIZE PLAN IN RETAIL TEAMMERCHANDIZER, RETAIL TEAM

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TIME 'n' ACTION CHART

BACKWARD PLANNING

ACTIVITYLEAD TIME

BUYER RETAIL NEED STOCK ON1st week FEB

IN WAREHOUSE OF IMPORTER OFFICE

IN NEW YORK15th JAN

NEW YORK PORT15th DEC

GOODS EXPORTED15th NOV

PRE PRODUCTION SAMPLES30th SEP

ORDER CONFIRMATION - Lead time for Prod

90 days lead Time15th AUG

SALES MAN SAMPLES15th July

(With Actual Fab / Trims )

FIT SAMPLE APPROVAL30th June

FINALIZATION ON PRICE OF SAMPLES GIVEN BY BUYER13th June

APPROVAL OF 2nd PROTOTYPE SAMPLE20th April

APPROVAL OF 1st PROTOTYPE SAMPLE [ Style ref]05th April

SAMPLE PACKAGE RECEIVE FROM BUYER20th March

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ACTIONDAYS PRIOR TO DELIVERY

COLOR

color satndards received from buyer65 days

1st lab dip submit to buyer60 days

comments from buyer55 days

2nd lab dip submit to buyer50 days

comments from buyer45 days

TRIMS

care labels approved by60 days

Buttons approved by60 days

threads approved by60 days

others35 days

ALL TRIMS APPROVED BY60 days

ALL TRIMSEX SUPPLIERS40 days

ALL TRIMSIN FTY30 days

SAMPLES

fit sample submit65 days

fit sample approval58 days

2nd fit sample submit51 days

2nd fit sample approval44 days

size set submit33 days

size set approval31 days

green seal sample submit30 days

green seal sample approval25 days

gold seal sample submit10 days

gold seal sample approval5 days

TESTING PROCESSES

prod fabric submitted for testing65 days

test report available by60days

prod garment submitted for testing35 days

test report available by30 days

PLANNED CUT DATE30 days

PRODUCTION

fabric delivery local35 days

fabric in fty imported

begin cutting26 days

begin sewing24 days

begin washing15 days

begin packing8 days

Final audit4 days

EX FACTORY DATE0 days

EX COUNTRY DATE

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Critical Path Method

Critical PathAn activity is any discrete part or task of a project which takes resources and time to complete.

Activities exhibit precedence relations.

Activities with their precedence relations form a project network.

The longest chain of activities considering task dependencies is called critical path.

Significance of CPMCPM is the key to successful merchandising calendar.

It determines the critical functions necessary to perform an activity or series of activities required to achieve an overall objective.

When a critical activity is delayed it forces all subsequent tasks to be delayed.

Determining Critical PathThe activities involved in development, execution and delivery need to be analyzed.

Determine the time required to accomplish them.

Determine the critical path.

Critical functions are represented throughPERT ChartsGantt Charts

PERT Charts

PERT is a method to analyze the involved tasks in completinggiven project, and identifying time needed to complete the totalproject.

PERT chart tell a managerlist of operations necessary to finish a projecttime needed for each operationcritical activities activities that consume the largest part of project-completion-time

Gantt Charts

A series of parallel horizontal graphs which show schedules for functions plotted against time.

Product Development

Time and Action Calendar

Production & Delivery

ReferencesCareers in Fashion & Textiles-By Helen GoworekFashion Buying-By Helen GoworekFashion Marketing-By Tony HinesFast Fashion-By Liz BarnesApparel Merchandising-By J.A. RosenauMerchandise Buying-By M.S. Bohlinger

THANK YOUPresented byAbhilasha HoonMansi GuptaReshma RajendranShivali DhimanSurasree Paul AMIT VII(2005-2009)