BUYING CYCLES AND TOOLS OF MERCHANDISING

• Multifaceted job involving:•fashion forecasting•range planning•order 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 November

• SUMMERSeptember DecemberOctober JanuaryNovember February

Task Approximate date Review of current season’s sales early August’09 Budget planning mid- August’09

Comparative shopping August September’09

 Directional shopping August October’09 (Fabric sourcing) October’09  Range planning October

November’09 Garment sourcing November’09 Price negotiation with suppliers November

December’09 Final range selection mid December’09 Placing orders for ranging December January (Product development- samples, testing etc.) January April’10 Bulk garment manufacture April July’10 Delivery of products to retailer August’10 IN STORES August October’10

• Buyer is always working on two season’s 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:

• Cultural

• Social

• Personal

• Psychological

• Buyer

• Review of current season’s sale:• The available sales figures reviewed by the buyer to

know garment's performance.

• The merchandising department compiles a review of previous season’s 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 season’s performance as well as any anticipated developments.

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

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

• Depending on the product type & the company’s 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 Macy’s, 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 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 company’s range.

• 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

• 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

• Understanding ‘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.

• Market 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.

• Include 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

• Retained Products

• Raw materials

• Innovations

• Products to be Adapted

• Homogeneous

• Heterogeneous

• Seasonal

• Non seasonal

• Assortment of Staple goods

• Assortment of Fashion goods

ClassificationPriceSize MaterialColour

• Assortment of Seasonal goods

• Period 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

• 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

• Changing Business Conditions

• Competition

• Economic conditions

• Unemployment

• Fashion trends

• Price fluctuations

• Availability of Supply and Materials

• Type of Retail Institutions

• Availability of discounts

• Stage in the Product Life Cycle

• Type of Retail institution

• Past Sales Records

• Determination of Consumer Wants

• Type of goods offered

• Elimination of Merchandise Lines

• Availability of capital resources

• Trading Area served

• Nature of goods carried

• Competition represented in the Trading Area

• Fashion goods

• Seasonal goods

• Convenience goods

• Shopping goods

• Specialty goods

• Attention to stock turnover and rate of sales

• Availability of substitutes (staples)

• No improvement in sales

• Little contribution to the sale of other products.

• Firm Plan is established

• Reduce the amount of work

• Reduction in the cost

• Creation an action plan

• Desired Revenue

• Managed Product Development

• Basis 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.

• 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.

• 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 merchandiser’s 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

• It 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.

• It 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.

• It 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.

• CPM 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.

ACTIVITY LEAD TIME

BUYER RETAIL NEED STOCK ON 1st week FEB

IN WAREHOUSE OF IMPORTER OFFICE

IN NEW YORK 15th J AN

NEW YORK PORT 15th DEC

GOODS EXPORTED 15th NOV

PRE PRODUCTION SAMPLES 30th SEP

ORDER CONFIRMATION - Lead time for Prod

90 days lead Time 15th AUG

SALES MAN SAMPLES 15th J uly

(With Actual Fab / Trims )

FIT SAMPLE APPROVAL 30th J une

FINALIZATION ON PRICE OF SAMPLES GIVEN BY BUYER 13th J une

APPROVAL OF 2nd PROTOTYPE SAMPLE 20th April

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

SAMPLE PACKAGE RECEIVE FROM BUYER 20th March

TIME 'n' ACTION CHARTBACKWARD PLANNING

ACTION DAYS PRIOR TO DELIVERY

COLOR color satndards received from buyer 65 days1st lab dip submit to buyer 60 dayscomments from buyer 55 days2nd lab dip submit to buyer 50 dayscomments from buyer 45 days

TRIMScare labels approved by 60 daysButtons approved by 60 daysthreads approved by 60 daysothers 35 days

ALL TRIMS APPROVED BY 60 daysALL TRIMS EX SUPPLIERS 40 daysALL TRIMS IN FTY 30 days

SAMPLESfit sample submit 65 daysfit sample approval 58 days2nd fit sample submit 51 days2nd fit sample approval 44 dayssize set submit 33 dayssize set approval 31 daysgreen seal sample submit 30 daysgreen seal sample approval 25 daysgold seal sample submit 10 days gold seal sample approval 5 days

TESTING PROCESSESprod fabric submitted for testing 65 daystest report available by 60daysprod garment submitted for testing 35 daystest report available by 30 days

PLANNED CUT DATE 30 days

PRODUCTIONfabric delivery local 35 daysfabric in fty imported

begin cutting 26 daysbegin sewing 24 daysbegin washing 15 daysbegin packing 8 daysFinal audit 4 days

EX FACTORY DATE 0 daysEX COUNTRY DATE

• An 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.

• CPM 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.

• The 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 through• PERT Charts• Gantt 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 manager• list of operations necessary to finish a project• time needed for each operation• critical 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.

S. NO Process Start Date Finish Date

1 Order Confirmation 25-3-2008

2 Ordering Bulk Fabric 25-3-2008

3 Receipt of Size Breakdown 27-3-2008

4 Order Sewing/Finishing Trims 27-3-2008

5 Fit submission 27-3-2008 17-4-2008

6 Fit Approval 24-4-2008

7 Wash submission 27-3-2008 23-4-2008

8 Wash Approval 30-4-2008

9 Receipt Sewing Trims 29-4-2008

10 YTS submission 24-4-2008 8-4-2008

11 YTS Approval 1-5-2008

12 GTS submission 1-5-2008 12-8-2008

Time and Action Calendar

S. NO Process Start Date Finish Date

13 GTS Approval 14-5-2008

14 Hand Over Production file to PPC 10-5-2008

15 Receipt of Head ends 05-5-2008

16 Shade Shrinkage Process 05-5-2008 08-5-2008

17 Taper Ready 09-5-2008

18 Patterns Ready 10-5-2008

19 Receipt of Bulk Fabric 12-5-2008

20 Size Set making 13-5-2008 15-5-2008

21 Size Set Review 15-5-2008 17-5-2008

22 Shade Band Approval 19-5-2008

23 PPM 19-5-2008

Ju n 2 8 ,2 0 08 Ju l 0 8 ,2 0 08

wash submission

Ju l 0 1 ,2 0 08 Ju l 11 ,20 08 3

10 +

Ju l 0 8 ,2 0 08 Ju l 1 8 ,2 0 08

wash approval

Ju l 11 ,20 08 Ju l 2 1 ,2 0 08 3

10 +

Ju l 1 2 ,2 0 08 Ju l 2 2 ,2 0 08

YTS submission Ju l 1 7 ,2 0 08 Ju l 2 7 ,2 0 08 5

10 +

Ju l 2 2 ,2 0 08 A u g 0 1 ,2 00 8

YTS approval

Ju l 2 7 ,2 0 08 A u g 0 6 ,2 00 8 5

10 +

H/O Ss/prod file to ppc Ju l 2 8 ,2 0 08 A u g 0 7 ,2 00 8

GTS approval Ju l 3 1 ,2 0 08 A u g 1 0 ,2 00 8 3

10 +

A u g 0 2 ,2 00 8 A u g 0 4 ,2 00 8

Taper ready

A u g 0 4 ,2 00 8 A u g 0 6 ,2 00 8 2

2+

A u g 0 4 ,2 00 8 E V E N T

Pattern ready

A u g 0 6 ,2 00 8 A u g 0 6 ,2 00 8 2

0+

Ju n 2 8 ,2 0 08 A u g 0 4 ,2 00 8

receipt bulk fabric Ju n 2 8 ,2 0 08 A u g 0 4 ,2 00 8 0

37 + A u g 0 4 ,2 00 8 A u g 0 6 ,2 00 8

size set making A u g 0 6 ,2 00 8 A u g 0 8 ,2 00 8 2

2+

Ju n 2 8 ,2 0 08 Ju l 0 5 ,2 0 08

fit subm ission Ju l 0 3 ,2 0 08 Ju l 1 0 ,2 0 08 5

7+

Ju n 2 8 ,2 0 08 E V E N T

order confirm ation Ju n 2 8 ,2 0 08 Ju n 2 8 ,2 0 08 0

0+

Ju n 2 8 ,2 0 08 Ju l 0 1 ,2 0 08

receipt of size brkdwn

Ju l 0 6 ,2 0 08 Ju l 0 9 ,2 0 08 8

3+

Ju l 1 8 ,2 0 08 Ju l 2 8 ,2 0 08

GTS subm ission

Ju l 2 1 ,2 0 08 Ju l 3 1 ,2 0 08 3

10 +

Ju n 2 8 ,2 0 08 A u g 0 2 ,2 00 8

receipt of head ends

Ju n 3 0 ,2 0 08 A u g 0 4 ,2 00 8 2

35 +

Ju n 2 8 ,2 0 08 E V E N T

order bulk fabric Ju n 2 8 ,2 0 08 Ju n 2 8 ,2 0 08 0

0+

Ju l 0 1 ,2 0 08 E V E N T

order trims

Ju l 0 9 ,2 0 08 Ju l 0 9 ,2 0 08 8

0+

receipt of sewing trims

A u g 1 0 ,2 00 8 A u g 11 ,2 00 8

PPM

A u g 1 0 ,2 00 8 A u g 11 ,2 00 8 0

1+

A u g 0 6 ,2 00 8 A u g 0 8 ,2 00 8

size set review

A u g 0 8 ,2 00 8 A u g 1 0 ,2 00 8 2

2+A u g 0 4 ,2 00 8 A u g 1 0 ,2 00 8

shade band approval

A u g 0 4 ,2 00 8 A u g 1 0 ,2 00 8 0

6+

Ju l 0 5 ,2 0 08 Ju l 1 2 ,2 0 08

fit approval

Ju l 1 0 ,2 0 08 Ju l 1 7 ,2 0 08 5

7+

S. No Process Start Date Finish Date

1 Bulk Cutting 21-5-2008

2 Sewing 23-5-2008 29-5-2008

3 Inspection 23-5-2008 29-5-2008

4 Washing 25-5-2008 31-5-2008

5 Finishing 27-5-2008 2-6-2008

6 Pressing 27-5-2008 2-6-2008

7 Final Checking 27-5-2008 2-6-2008

8 Packaging 27-5-2008 2-6-2008

9 Internal Quality Audit 05-6-2008

10 External Quality Audit 08-6-2008

11 Quantity delivered to internal Warehouse 08-6-2008

12 Goods Dispatched from warehouse to Buyer 08-6-2008

bulk cutting

Sewing

Inspection

Washing

Finishing

Pressing

Final Checking

Packaging

Internal QA

External QA

Warehouse

Dispatch

• Careers in Fashion & Textiles-By Helen Goworek• Fashion Buying-By Helen Goworek• Fashion Marketing-By Tony Hines• Fast Fashion-By Liz Barnes• Apparel Merchandising-By J.A. Rosenau• Merchandise Buying-By M.S. Bohlinger