Merchandise Management
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Transcript of Merchandise Management
33% of all goods are sold at marked down prices.
8% of items customers come to buy are out of stock.
K-Mart wrote off $400 million in excess inventory in the first quarter of 2001. Contributed to 40% decline in net income.
75% of sales were made over Christmas season. Erratic cash flows which undermine the success of the assortment approach.
What did they do to support their broad & deep assortment strategy?
They created a year round store.
MANAGEMENT INCLUDED NON-TOY CATEGORIES:
• diapers • baby formula • jarred food • clothing • Back-to-School, Easter, Halloween
merchandise.
What do you think would happen if Woolies only stocked summer clothes in spring and winter clothes in autumn?
60% of customers refuse to switch brands in an out of stock situation. They would rather venture to another store.
Use last year’s sales to determine this year’s forecast. Evaluates only what was sold.
?
Not what it could have sold if the inventory had been available.
MERCH PLANNING
Tells when you have the wrong thing, or too much of the right thing.
It can’t tell you when you don’t have something many people want.
Rely on customers (Social Media)
MERCHANDISE OPTIMISATION SYSTEMS.
Brand choice decisions are often made at POP. Final choice may be influenced by in store merchandising factors such as space.
SPACE ALLOCATION METHODS:
• By profit (Assortment issues) • By sales (High out of stocks) • By % of sales (low volume, high
profit goods under merchandised)
RECOMMENDATIONS:
• Product dimensions & delivery cycle
• Differences in profitability
• Strength of a products customer loyalty