Lesson 8: Merchandising

Objectives Give examples of the four main categories

of merchandise Explain the importance of stock lists and

inventory control on merchandising Describe how sales are affected by the

strategic placement of merchandise throughout a store – including the store entry, checkout lanes, and back of the store

Analyze the financial impact of rearranging products

1. What is Merchandising?

The coordination of buying merchandise that customers want in the proper quantities and then selling that merchandise at a price that customers are willing pay Also includes the skillful arrangement of

where items are placed within a store

2. Types of Merchandise

Staples Fashion Seasonal Convenience

3. Staple Merchandise

The ‘basics’ in your store Stocked year round Large portion of store sales What customers need on an ongoing

basis and sell well year after year Ie: bread and eggs in a grocery store Ie: socks and shoes in a department

store

4. Fashion Merchandise

Items that are stocked for several years and have solid sales over that time period

Eventually, fashion merchandise changes and customers will switch to buying different styles

Ie: skinny jeans, Wii, Tickle Me Elmo Does NOT have to be clothing!

5. Seasonal Merchandise

Items that sell well during particular times of the year that are stocked only for that selling period

Receive markdowns after selling season is over

Ie:

6. Convenience Merchandise

Items customers buy without thinking very much about the purchase

Or, items purchased solely for the convenience of it being there

Can be purchased often or even daily Ie:

7. Stock Lists Tools that retailers use to help them keep a

close eye on the inventory they stock Assist retailers with the task of maintaining

correct quantities of merchandise Itemized and detailed listings of the

merchandise a store or department should have for sale Basic stock list Model stock list Never-out stock list

8. Basic Stock Lists Keeps track of the staple

merchandise that the store should always keep in inventory (have a regular customer demand)

Notes a min. quantity that should always be in inventory and the number of items to be reordered when needed

Studied daily

9. Model Stock List

Used to keep track of fashion merchandise

The list changes more often than basic stock list items, therefore is less detailed

Monitoring this will give valuable info about best pricing, styles, and colors of products

10.Never-out Stock List Used for all four types of merchandise Keeps track of best-selling

merchandise Monitored frequently to ensure that

popular items are always available in sufficient quantities

The list changes frequently (new items are added and less popular ones are removed)

11.Merchandising and Sales General rule of thumb: Plan for a ten

percent increase over last year’s sales for the same time period Must consider current business circumstances

when planning and act accordingly There must be enough merchandise for

customers to choose from There shouldn’t be TOO much merchandise,

it could overwhelm the customer

12.Merchandising for Profit

Strategic placement of merchandise within the selling space is a big factor in generating sales

Staple merchandise usually has a permanent location and does NOT need to be in high traffic areas

13.Store Entrance

Has the greatest customer exposure Has the best chance of producing a

large amount of sales

14. Impulse Purchases

Small items that are purchased with little or no thought on behalf of the customer

Placed near entrance area, checkout area, and heaviest customer traffic areas

Ie: magazines, candy bars, gum

15.Related Merchandise

Items that are related to each other and that usually sell together

If a customer buys one, they will likely buy the other

Should be located near one another Ie: razors and shaving cream, peanut

butter and jelly

16.Key Math ConceptsPlanned Sales Increase =

Last Year’s Sales X % Planned Increase

New Estimated Sales = Last Year’s Sales + Answer from above

Total Price Per Item Ordered = Quantity Ordered X Price Per Unit