Merchandise Management
Merchandise Management is the analysis, planning, acquisition, handling, and control of the merchandise investments in a retail operation. Analysis - retailers must be able to correctly identify their customers before they can determine the needs and wants of their consumers Planning - retailers must often purchase their merchandise 6-12 months in advance of the selling season Acquisition - merchandise needs to be bought from others, either distributors or manufacturers Handling - ensures that the merchandise is where it is needed and in the proper shape to be sold Control - ensures an adequate financial return on the retailer’s merchandise investments
Merchandise Mix
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A. Dimensions ● Variety - number of different merchandise lines a retailer chooses to stock in its store ● Breadth/Assortment - number of brands that are found in a single merchandise line ● Depth - the average number of stock keeping units (SKUs) within each brand of the merchandise line
B. Constraining Factors ● Dollar-Merchandise Constraints - money is seldom enough to emphasize variety, breadth, and depth simultaneously ● Space Constraints - as more variety is added, empty space becomes necessary to allow the consumer to clearly distinguish between distinct product lines ● Merchandise-Turnover Constraint - as the depth of the merchandise is increased, the retailer will be stocking more and more variations of the product to serve smaller and smaller segments. Consequently, inventory turnover will deteriorate and the chances of being out of stock will increase ● Market Constraints - constraints from consumer needs and wants
Merchandise Sources ● Vendor Profitability Analysis Statement It serves as the evaluation record of the merchandisers regarding their purchasing transactions. This includes purchases made, discounts granted, transportation charges, original markup, markdowns and season- ending gross margin. ●
Merchandise Mix
[pic]
A. Dimensions ● Variety - number of different merchandise lines a retailer chooses to stock in its store ● Breadth/Assortment - number of brands that are found in a single merchandise line ● Depth - the average number of stock keeping units (SKUs) within each brand of the merchandise line
B. Constraining Factors ● Dollar-Merchandise Constraints - money is seldom enough to emphasize variety, breadth, and depth simultaneously ● Space Constraints - as more variety is added, empty space becomes necessary to allow the consumer to clearly distinguish between distinct product lines ● Merchandise-Turnover Constraint - as the depth of the merchandise is increased, the retailer will be stocking more and more variations of the product to serve smaller and smaller segments. Consequently, inventory turnover will deteriorate and the chances of being out of stock will increase ● Market Constraints - constraints from consumer needs and wants
Merchandise Sources ● Vendor Profitability Analysis Statement It serves as the evaluation record of the merchandisers regarding their purchasing transactions. This includes purchases made, discounts granted, transportation charges, original markup, markdowns and season- ending gross margin. ●