8/6/2019 Reatail Merchandising 1
1/36
Retail Merchandising 1
Yogendra Bhandari
8/6/2019 Reatail Merchandising 1
2/36
Objectives
To demonstrate the importance of a sound merchandisingphilosophy
To outline the considerations in devising merchandise
plans: forecasts, innovativeness, assortment, brands,timing, and allocation
To discuss category management
To study variousbuying organization formats and the
processes they use
8/6/2019 Reatail Merchandising 1
3/36
Retail Merchandising
Definition & the Concept of RetailMerchandising
Role & Responsibilities of a Merchandiser
Fashion Merchandising
Merchandise Characteristics
Merchandise Management- Merchandise Mix &
Merchandise Budget Basics of Merchandise Accounting
8/6/2019 Reatail Merchandising 1
4/36
RM - DEFINITION
Retail selling effort that is the principal task of in-store sales personnel through theuse of promotions designedby a manufacturer, such as unique displays, giveaways,or discount and premium offers. In this case, merchandising is the act of managing
and arranging the merchandise on display in a store so as to promote its sale.
8/6/2019 Reatail Merchandising 1
5/36
8/6/2019 Reatail Merchandising 1
6/36
Merchandising
Versus StoreManagement Career
Tracks
8/6/2019 Reatail Merchandising 1
7/36
Functions of Merchandisers at Shoppers stop
Inventory-turn Management Achieving Sales & Margins Plans Merchandise Availability Management, as per range plan
Merchandising strategy & planning Processing of purchase orders
Analysis of Data & Sales Budgeting Profitability Targets & Expense Control Vendor/Supplier relations forboth, in-house products as well as for
brands.
8/6/2019 Reatail Merchandising 1
8/36
ARRANGING -MERCHANDISE
8/6/2019 Reatail Merchandising 1
9/36
8/6/2019 Reatail Merchandising 1
10/36
Merchandising arrangement
MERCHANDISING ARRANGMENT
Why making effective use of your space is so important.
How to position your departments and products.
How to improve store lighting.
The importance of atmosphere and cleanliness in your store.
How to create great displays and signage.
WHAT WE WILL ACHIEVE AS A BUSINESS.
The consistentlybest Display standards against Competition in India
A great environment that will attract & satisfy Customers
Showcase tobest advantage our product offer
Dramatically enhance Customer Service
8/6/2019 Reatail Merchandising 1
11/36
Managing the Merchandise
Developing a sales forecast
Determining the merchandise requirements
Merchandise controlAssortment planning
8/6/2019 Reatail Merchandising 1
12/36
8/6/2019 Reatail Merchandising 1
13/36
8/6/2019 Reatail Merchandising 1
14/36
Determining the merchandise requirements
Merchandise Mix
Retail communication Mix
8/6/2019 Reatail Merchandising 1
15/36
Basics of Merchandise Accounting
8/6/2019 Reatail Merchandising 1
16/36
Merchandising Accounting
Cash Flow
The Balance sheet
Financial Ratios Income statements
Gross- Margin-Return on Investment
8/6/2019 Reatail Merchandising 1
17/36
Cash Flow
Cash In
CashOut
Negative Cash flow = Cash In < CashOut Positive Cash flow = Cash out > Cash In
8/6/2019 Reatail Merchandising 1
18/36
8/6/2019 Reatail Merchandising 1
19/36
The Balance Sheet
The Balance Sheet is a statement of an
organization's Assets, Liabilities andOwners
Equity at a Particular Point in time.
Assets
Liabilities
Owner's Equity
8/6/2019 Reatail Merchandising 1
20/36
Assets
Assets Ownedby an organization
a. Short term (or) Current Assets
b. Long term
8/6/2019 Reatail Merchandising 1
21/36
Liability
Liability: Debts owedby an organization
Payment on Short term
Ex: Payment to supplierPayment on Long term
Ex: Mortgage on Land &
BuildingInvestment on Extension,
Expansion & renovation
8/6/2019 Reatail Merchandising 1
22/36
Owners Equity
Owners Equity : Differencebetween asset and
Liability.
Relationship:Assets = Liabilities +Owners Equity
8/6/2019 Reatail Merchandising 1
23/36
Income statement
8/6/2019 Reatail Merchandising 1
24/36
Income statement
Profit performance for a specific period of time
Income statement is otherwise called Statement of earnings or Profit
& loss statement
Income statement: Revenue Expenses = Net Income
Profit = Expenses < Revenue = positive Net Income
Loss = Expenses > Revenue = Negative Net Income
8/6/2019 Reatail Merchandising 1
25/36
Income statement contd
Income statement canbe computed for an entire organization
Individual Store
A Group of Store
Department
Profit and loss isbased on the revenue & expenses directly associated
with each unit ofbusiness.
8/6/2019 Reatail Merchandising 1
26/36
Income statement contd
Components : 5 major components Revenue
Cost of goods sold
Gross margin Expenses
Net Profit
Relationship among the components Net revenue Cost of goods sold - Expenses
Gross margin Net Profit
8/6/2019 Reatail Merchandising 1
27/36
Income statement contd
Relationship among the components Net revenue Cost of goods sold - Expenses
Gross margin Net Profit
Net revenue : composed of sales, Leasing or renting property or
interest on accounts
Net sales = Gross sales Customer return
Gross sales are used to determine the customer return rates
Customer return rate = Customer returns x100
Gross sales
8/6/2019 Reatail Merchandising 1
28/36
Income statement contd
High customer return rate is often indicates of issue related
a. Customer service
b. Quality
c. Fit of merchandise High sales attest to the ability of an organizationbuyer to
select assortments of goods that are appealing to the storestarget customers.
8/6/2019 Reatail Merchandising 1
29/36
Income statement contd
Cost of goods sold (or) Cost of Merchandise sold (or)
cost of sales
Cost of goods sold = Billed cost of Merchandise +work room costs +shipping cost cash Discount -
Returns to vendors
8/6/2019 Reatail Merchandising 1
30/36
8/6/2019 Reatail Merchandising 1
31/36
Income statement contd
Expenses: Payroll, rent, Utilities, advertising and
interest on debt.
Direct Expense: attributable to a specific unit (store rent )
Indirect Expense: is not attributable to a specific
unit. ( news paper advertisement )
8/6/2019 Reatail Merchandising 1
32/36
Income statement contd
Gross margin : Differencebetween sales and cost of goods sold.
Net Income : Gross Margin Expenses
Income canbe increasedby Increasing sales Increasing Gross Margin Decreasing cost of goods sold
Any combination of above
Component Percentage :Cost of goods sold = cost of goods X 100
Net salesGross Margin = Gross Margin X 100
Net Sales
Expenses = Expenses X 100
Net Sales
8/6/2019 Reatail Merchandising 1
33/36
GMROI
Particulars Category A Category B
Sales 300000 250000
Cost of Goods Sold 180000 100000
Gross Margin 120000 150000
Gross Margin % 40% 60%
8/6/2019 Reatail Merchandising 1
34/36
GMROI
Gross Margin Return on Investment
Integrates two performance Gross Margin
TurnOver
To create a single measure of performance GMROI = Gross Margin X Net sales
Net Sales Average Inventory
GMROI = Gross Margin / average Inventory
8/6/2019 Reatail Merchandising 1
35/36
GMROI for 3 Merchandise Categories
Particulars Gross Margin Avg Inventory GMR OI
Specialty Food 120000 28000 4.3
Countertop
Appliance
80000 40000 2.0
Glassware 200000 130000 1.5
8/6/2019 Reatail Merchandising 1
36/36
Key terms
Assets
Balance sheet
Cash discount
Cash Flow
Component Percentage
Cost of goods soldCurrent ratio
Expenses
Factor
GMROI
Gross sales
Income statement
Liability
Net Income
Net Loss
Net Sales
Return to VendorOwners Equity
Time Series Comparison
Workroom cost
Top Related