What is Merchandising Planning?

Christine Tsui Fashion Community

What is Merchandising Planning

 

Date:18/03/2018

Time: 8pm to 10pm

Host by Midori-shanghai-designer

Pisces, a post-90s designer with mild obsessive-compulsive disorder, has a strong executive power and a combination of care and patience. Three years local brand designer experience, in the design has its own preference and opinion.

The outline of discussion:

Q1. What is Merchandising?

Q2. Why is Merchandising Planning important?

Q3. How to make a Merchandising Planning?

 

PART ONE: What is Merchandising?

Merchandising is a general term. It involves a wide range of occupations. They are retail purchasing, designers, buyers, displays, merchandising managers, marketing operations, production managers and other occupations.


a. What are the occupations involved in merchandising?

 

Hangzhou-Buyer-Crystal

The first thought coming out must be Buyer.
Jason- Guangzhou- Independent buyer +manager
Designer, Buyer, Visual Merchandising, Merchandising Manager, Marketing, Operation, Production Manager, etc.

Deng Hua- Shanghai- Buyer of Children’s Wear
Buyer in R & D department , Retail Buyer.

Jing Jing- Hangzhou- Jewelry sales
Merchandising specialist.

Yvonne-Shanghai-Garment
Product manager.

Zitong-Shanghai-Merchandising
Buyer, merchandising planner.

Midori-Shanghai-Designer
Buyer is a general designation.
Zitong-Shanghai-Merchandising
Brand manager.

Yi Maoban-Shanghai-Culture & Travel
Merchandising planner, designer

Ziwen-Ningbo-Ecommerce
Visual Merchandising, sales, merchandising director, marketing, designer.

Abby-Guangzhou-Merchandising Manager
Merchandising, merchandising manager, buyer.

Jason-Guangzhou-Independent buyer + Manager
All of these should be involved in the whole merchandising.

Midori-Shanghai-Designer
Buyer is the main position in Merchandising. And rest of them are more likely to be relevant to retail buying.

Yu Siqi-Beijing- Buyer’s assistant
Merchandising manager, buyer, etc.

Yvonne-Shanghai-Clothes
Purchasing should also be considered as a large general term. It involves merchandising.

Una-South Africa-Former buyer
Buyer / designer / visual merchandising / merchandising analyst / branding director.

Yu Siqi-Beijing-Buyer’s Assistant
The department of merchandising.

Midori-Shanghai-designer
The designer belongs to the design project.

Una-South Africa-former buyer
We used to be that buyers making merchandising plans, and then the marketing department, sales department, merchandising department, and purchasing department holding a meeting together.

Midori-Shanghai-designer
The visual merchandising is a spatial planner, and this part overlaps with the merchandising, involving these several departments, which is the influence factor we will discuss later. My understanding includes: retail purchases, buyers (niche brand buyers / traditional buyers / consumer-oriented buyers / mass buyers). The main two parts will be more in favor of merchandising.

b. What does Merchandising include? 

In different enterprises, the content of merchandising will be different. However, from a marco-perspective, merchandising includes design planning, product planning, process control, and so on. 

Details include OTB planning (width and depth of SKU), launching plan, collection theme, merchandising structure and category planning (E. G. product style and structure, color, fabric, pattern, etc.), Sales Budget, Purchasing Budget, Spatial Planning, Marketing Planning, and pricing.

Jason-Guangzhou-independent buyer + manager
Design planning, product planning. Process management and control includes quarterly theme planning, merchandising structure planning, band amount planning!

Zitong-Shanghai-Merchandising
Proportion of merchandising category.

Lengyun-Shanghai-Master of group
Is it a business that we know?

Cheng Liang-Guangzhou-buyer
Style, theme, color.

Lengyun-Shanghai-Master of group
In other words, is it a question of personal opinion or corporate phenomenon?

Midori-Shanghai-Designer
Business that we know.

Abby-Guangzhou-Merchandising Manager
OTB, banding, merchandise style and structure, color, fabric, pattern, and collection.

Deng Hua-Shanghai-Buyer of Children’s Wear
In our company, buyers come up with the merchandising planning every quarter and keep communication with designers. Then designers will design according to the framework of merchandising.

Zitong-Shanghai-Merchandising
The structure of each band goods.

Hangzhou-buyer-Crystal
Launching planning, category planning, demand planning, marketing planning, pricing (merchandising first planning, then analysis, and finally inspection).

Una-South Africa-Former Buyer
I used to have a vague concept in my mind. After learning the teacher’s curriculum I summed up that first according to the sales, we can forecast and formulate marketing target, profit target (gross profit / net profit), stock-to-sales ratio goal, discount strategy, and merchandising structure classification. According to the above objectives, the OTB budget and the design planning (merchandising visual planning / spatial planning / marketing band and product line planning) are worked out.

Yu Siqi-Beijing-Buyer’s Assistant
Planning, brand selection, communication, signing of contracts, OTB, selection, observation of sales data, timely replenishment / return of the entire product line.

Yi Maoban-Shanghai-Wen Lv

Product positioning, target clientele, style series, output and price range.

Jing Jing-Hangzhou-Jewelry sales
Product purchasing budget, product portfolio, product width, pricing.

Lengyun-Shanghai-Master of group
@Deng Hua + Shanghai + Buyer of Children’s Wear: Dear you still haven’t explained what the merchandising is including?

Susan-Shanghai-Buyer
Macroscopic aspects include political and economic trends; microcosmic aspects include OTBs, listed bands, category proportions, spatial planning ,and sku width and depth.

Lengyun-Shanghai-Master of group
Back to the fundamental question, what is the purpose of merchandising? Why should there be a merchandising?

Midori-Shanghai-Designer
What I have observed is that merchandising generally includes merchandising launching plan, merchandising category planning, sales budget, purchasing budget, and a subdivided purchasing budget.

Anlan-Shanghai-Design
OTB, category structure, profile structure, each shelf band, SKU, amount allocation, pricing, post review, and promotional activities.

Susan-Shanghai-Buyer
The purpose of merchandising is to maximize the profits.

Una-South Africa-Former buyer
The purpose of merchandising is to guide the design and development of merchandise from the point of view of maximizing the profits of enterprises.

Midori-Shanghai-Designer
@ Susan- Shanghai- buyer: This is very detailed.

Deng Hua-Shanghai-Buyer of Children’s Wear
OTB, category planning, market band, launching plan, sales forecast, and pricing strategy.

Midori-Shanghai-Designer
In addition, clothes is a seasonal product, when to sell, how much should be sold, what amount of the style all need to be planned in advance, and to ensure that planning in line with the law of seasonal changes in climate. In addition to being affected by the climate, retail sales are also much affected by holidays.

Lengyun-Shanghai-Master of group
Actually, I do not think the concept of profit maximization exists, just more for the sake of sales, gross margin and inventory balance.

Lily-Shanghai-Buyer
I will also increase more key section developing plans.

Midori-Shanghai-Designer
So the part of the launching plan is also of great importance.

Abby-Guangzhou-Merchandising Manager
Make the planning of the amount of money, profits, basic funds, image section.

Anlan-Shanghai-Design
Define the attributes of the merchandise

Ziwen-Ningbo-ecommerce
There are merchandising sales forecast, the formulation of OTB plan, and merchandising positioning (price band, style, and sales strategy)in the early stage, and in the later stage, the actual sales data analysis (such as the purchase, sales, storage, return, and other indicators).

Hangzhou-Buyer-Crystal
Can it be understood as reducing inventory risk to more accurately find out the popular style, the amount of money, so as to maximize sales?

Midori-Shanghai-Designer 
Profit maximization is also important to set the demand for the number of styles, and plan how many sku in each quarter to sell.

Lengyun-Shanghai-Master of group
In particular, the question of the width and depth of the merchandise is very important.

Deng Hua-Shanghai-Buyer of Children’s Wear
We will always keep an eye on the sales situation, starting with the launching.

Lengyun-Shanghai-Master of group
Yeah, it’s all a rolling plan.

Anlan-Shanghai-Design
And the depth of each item ~.

Midori-Shanghai-Designer
Yes, then the historical making-the-plan data will be used as a reference value.

c.What is the relationship between merchandising and design planning?

 

It is generally accepted that design planning is a part of merchandising. The difference between the two is that the former is more perceptual and pays more attention to the visual presentation, while the latter is more rational,  based on the historical data and focus more on overall business planning of the company. 

Jason-Guangzhou-independent buyer + manager. 
Merchandising includes design planning!

Una-South Africa-former buyer. 
Between them, the ability to sell products, sales season and sales history are very important.

Candy-Shanghai multibrand buyer. 
Design planning is more focused on merchandise style.

Deng Hua-Shanghai-Buyer of Children’s Wear. 
The designer plans under the framework of merchandising.

Midori-Shanghai-designer. 
Yeah, they’re subset relation.

Yvonne-shanghai-clothes. 
Does it depend on whether the company is buyer-led or design-led to determine their relationship?

Lily-shanghai-buyer. 
In depth I will refer to the definition of historical data, channel changes, and style, but the most important basis is OTB.

Hangzhou-buyer-Crystal. 
Merchandising plan as a guide, gives the direction of design planning and demand. Design planning according to fashion trends, colors, fabrics, and the combination of popular elements to design merchandise.

Fioriah-Shanghai-Brand and Market expansion.
Merchandising on the basis of design planning is more sensitive to the market response, and design planning focusing on culture and style.

Lengyun-shanghai-master of group. 
@ Midori- Shanghai-designers: we’d better talk about the differences between merchandise planning and design planning.

Lily-shanghai-buyer. 
Merchandising is shown by numbers.

Yu Siqi-Beijing-Buyer’s Assistant. 
Merchandising includes design planning. Merchandising for the overall retail merchandising, and design planning focus on the sense of design.

Lily-shanghai-buyer. 
Design planning focuses on vision.

Midori-Shanghai-designer. 
Merchandising is rational planning, while design planning is perceptual planning. Design planning needs merchandising to give a general planning direction before it can be carried out.

Candy-Shanghai multibrand buyer. 
The difference between the two I think is the different focus. Merchandising focuses on depth and breadth, which is the quantity aspect while design planning more emphasizes on style.

 Anlan-Shanghai-Design. 
Our merchandising will also set a push rhythm, and add some promotional activities.

Midori-Shanghai-designer. 
Merchandising is up to the number of planning requirements, and merchandising cost budget requirements.

Una-South Africa-former buyer. 
Merchandising tends to be formulated price positioning, market positioning, and consumer positioning while the design planning inclines to make the trend of the brand, color, style, and fabric.

Midori-Shanghai-designer.
Design planning will be based on the data above to specifically plan fabric type, style, color, and thickness.

Ziwen-Ningbo-ecommerce. 
Early there is the merchandising, whose part is design planning. Is the design planning entirely done by the design department?

Zitong-shanghai-merchandising. 
The design plan should be meticulous to a series of themes, styles, main colors, surface accessories and so on.

Lu Xiaokang-Shanghai-buyer. 
What is harder to design is the relationship between seasonal themes and the rest of the band themes with consumers.

Midori-Shanghai-designer.
Yes, the design planning is entirely done by the design department, and most companies do so.

Lu Xiaokang-Shanghai-buyer. 
No department of planning can be separated from it.

Zitong-shanghai-merchandising. 
I think merchandising is more based on historical data and the corporate’s overall planning framework.

Jason-Guangzhou-independent buyer + manager. 
Design planning should be the source of early inspiration, fashion trend analysis and theme Kanban, etc.

Midori-Shanghai-designer. 
Design planning needs merchandising to give the specific launching time, sales cycle, the number and relative proportion of all kinds of goods listed, the price range, and the respective proportion of the basic, fashion, characteristics, essential section.

Jason-Guangzhou-independent buyer + manager. 
More perceptual, merchandising is the whole business case.

Lengyun-shanghai-master of group. 
Merchandising is data planning while design planning is visual planning.  That’s my simplest definition.

-Yi Maoban-Shanghai-Wen Lv. 
That is to say, merchandising has a guiding influence on design planning.

Midori-Shanghai-designer. 
That’s right.

Abby-Guangzhou-Merchandising Manager. 
According to the design planning, the proportion of display space planning, style series, color, as well as the proportion of merchandise attributes, fabric, and pattern.

PART TWO  Why is Merchandising Planning important?

 

a. How does buying team work without a merchandising planning?

The benefits from a good merchandising planning are shown below:

A.  It is a well explanation of fashion trends, an analysis of historical data and a monitor on inventory level. It is scientific and caters the changing customers’ demands.

B. It works when company try to reduce reduction caused by excessive inventory and shortage of stocks. It can improve sales performance and increase profit margins!

C. The key issues when merchandising planning is that how to select the depth and breadth of inventory, how to distribute basic products and fashion commodities, and how to calculate OTB purchases and amounts. The maximized utilization of funds ensure that there will be enough back-up fund when the sales performance is not good as expected.

Susan-Shanghai-buyer. 
The boss patted his head.

Lu Xiaokang-Shanghai-buyer. 
The boss is talking nonsense.

-Yi Maoban-Shanghai-Wen Lv. 
Hit the head + 1.

Lu Xiaokang-Shanghai-buyer.
So do we.

Una-South Africa-former buyer. 
By feeling.

Deng Hua-Shanghai-Children’s clothes. 
Buyers refer to competing brands.

Zitong-shanghai-merchandising. 
I recalled that the department manager of our company bought goods. I just thought it would be OK to order this 500 and that 1000 with no reason.

Jason-Guangzhou-independent buyer + manager. 
By the eye, it’s a perceptual choice!

-Yi Maoban-Shanghai-Wen Lv. 
Or based on experience, and data from the previous year.

Candy-Shanghai multibrand buyer. 
In the absence of a specific merchandising, our boss estimated it roughly on the basis of the sales budget.

Abby-Guangzhou-Merchandising Manager. 
According to historical data.

Lu Xiaokang-Shanghai-buyer. 
It’s just so crazy and not reliable.

Jing Jing-Hangzhou-Jewelry sales. 
Experience and intuition.

-Yi Maoban-Shanghai-Wen Lv. 
The sixth sense.

Candy-Shanghai multibrand buyer. 
As far as the specific style is concerned, it is entirely based on feeling.

Cheng Liang-Guangzhou-buyer. 
In fact, in many small branded chain stores, there is no merchandising. It’s based on sales, previous data, and the current quarter of the hot categories, or to see what stores are needed, to make purchases.

Ziwen-Ningbo-ecommerce. 
Buy what’s popular.

Una-South Africa-former buyer. 
Historical data is important.

Hangzhou-buyer-Crystal. 
If there is no merchandising, more is the upper echelon and the boss according to their own experience of the market, sensibility to buy goods, with the market wave by flow.

Abby-Guangzhou-Merchandising Manager.
City tune, fashion trend.

Midori-Shanghai-designer. 
Generally speaking, it is based on individual preferences for style to buy it.

Yvonne-shanghai-clothes. 
According to the actual sales situation and last year’s experience, which sells well will increase the quantity or turn over the order.

Lengyun-shanghai-master of group. 
How can the trend of market research and fashion be explained into figures?

Candy-Shanghai multibrand buyer. 
There will also be a reference to the brand company’s recommendations, and the main merchandise.

Lu Xiaokang-Shanghai-buyer. 
Consumer self-portraits are important.

-Yi Maoban-Shanghai-Wen Lv. 
Follow the celebrities.

Hangzhou-buyer-Crystal. 
Refer to what competing brands are selling.

Zitong-shanghai-merchandising. 
Sometimes the designers were cut off too many styles by the buyers, and the department manager picked out some of last year’s popular styles and changed the fabric and color to renew them.

Una-South Africa-former buyer. 
The opinions of the salesmen and franchisees.

-Yi Maoban-Shanghai-Wen Lv. 
Refer to the factory styles and recommendations.

Lily-shanghai-buyer. 
A lot of trends can also be seen in the street photography.

Midori-Shanghai-designer. 
So what will be the problem by this way of buying?

Zitong-shanghai-merchandising

Sales and franchisees’ opinions sometimes come too late and will be referred to the later rapid response, but in the initial order, it is all based on experience and personal preferences.

-Yi Maoban-Shanghai-Wen Lv. 
Following the trend with the general public results in a backlog of goods.

Zitong-shanghai-merchandising. 
How else can we sell our inventory at a 70% discount for five or six weeks?

Lily-shanghai-buyer. 
Irrational, it is likely to lose control of good inventory.

Deng Hua-Shanghai-Buyer of Children’s Wear. 
Bad style doesn’t sell out, but good style sells out too early.

Candy-Shanghai multibrand buyer. 
For example, to buy according to historical sales, the original model may be popular, but the next season is not popular. According to the recommendation of the brand company, maybe our customers are not that type.

Ziwen-Ningbo-ecommerce. 
I will consult the supplier or the factory’s opinion. The possibility of buying the new general is quite big because we have the fluke psychology.

Zitong-shanghai-merchandising. 
Sometimes, we turn last season’s good fashion models, which are supported by sales data, into this season’s VW models. (AP Photo / trendy / trendy).

Midori-Shanghai-designer. 
Therefore, the merchandising is to make a “framework guidance” for this quarter’s order before the order meeting. If the merchandising can be compared to setting up the skeleton, then the order will be specifically order goods.

Yvonne-shanghai-clothes. 
@Ziwen Ningbo ecommerce.

What do you mean by reference to the opinions of suppliers and factories? Will they give a trend of competing goods or fabric styles with high order volume in the current time?

Midori-Shanghai-designer. 
Have you ever met any unreasonable situation in the formulation of merchandising?

Jason-Guangzhou-independent buyer + manager. 
Yes, but according to the data of the same period in previous years, it is still relatively referential. If there are differences, we can make adjustments in the later period.

Zitong-shanghai-merchandising. 
In fact, a lot of merchandising is also very perceptual.

Abby-Guangzhou-Merchandising Manager. 
The proportion of the key categories planning does not coincide with the sales.

Candy-Shanghai multibrand buyer. 
Yes, for example, a certain category plans to order SKUs too large, but the options are not so many.

Lily-shanghai-buyer. 
This will be adjusted on the spot according to the order.

-Yi Maoban-Shanghai-Wen Lv. 
This is because the designer is not our company?

Jason-Guangzhou-independent buyer + manager. 
There will be one in the company.

Una-South Africa-former buyer. 
How to effectively avoid perceptual formulation? What is the most important point?

Midori-Shanghai-designer. 
Sometimes poor portfolio planning results in excessive production costs while overstocking of unpopular products, and insufficient inventory of marketable products, result in losing sales opportunities.

Ziwen-Ningbo-ecommerce. 
Suppliers sometimes have a better grasp of the product or details than we do. With more information, they directly improve according to the feedback they get from the original product.

Candy-Shanghai multibrand buyer. 
Right. Equalitarianism is a very easy mistake to make when ordering an order, and it is sometimes impossible to make a correct choice when you choose it with a particular focus.

Midori-Shanghai-designer. 
This is an irrational expression of merchandising. Merchandising Planning is to make a specific quantitative decision for the purchase, through at the right time, in the right store, providing the right goods to meet the needs of customers.

b. What will be the impact of good or bad merchandising planning?

 

If there is no merchandising, many companies make buying decisions according to the bosses’ opinions. Some will also take reference to historical sales data, seasonal fashion trends and reference to competing brands, asking salespeople and franchisees for advice to determine. These methods may have some drawbacks, such as the emotional judgment of the boss alone being likely to face inventory problems in the future; if reference to historical sales data, the trends today may not be popular next season; Sales and franchisees’ comments sometimes come too late for later quick response.

Merchandising Planning, as a framework guidance, is really important. A good merchandising planning can greatly be beneficial for an enterprise to make a profit. Bad merchandising will directly affect the interests of the company, leading to a decline in retail terminal performances. The unreasonable Category structure, and too many or too few products will increase the probability of inventory risk. In other words, merchandising is the steerer of a ship, and whether a steerer is good or not affects the passengers of the whole ship.

Ziwen-Ningbo-ecommerce. 
Egalitarianism may be caused by market research not done well, or money being measured.

Candy-Shanghai multibrand buyer. 
I think we need to think about the business case in many dimensions and in many ways. For example, in the article shared by the teacher, there are several key points that need to be paid attention to in the planning, and market research has identified more than 10 of the most influential points that we need to carefully consider in the planning.

Midori-Shanghai-designer. 
From the purchasing aspect: if the retailer planning and quantity of ordering the merchandise is insufficient, lack of the target customer’s merchandise can cause the sale loss. On the other hand, overbuying of commodities may lead to overstocking at the end of the season, leading to low returns on profits.

Lengyun-shanghai-master of group. 
You have to read your article in conjunction with me. Otherwise, it’s always limited to your own experience.

Midori-Shanghai-designer. 
Neither the quantity nor the style nor the choice of goods, it is not an easy or simple decision for the buyer.

Hangzhou-buyer-Crystal. 
A bad merchandising will have a direct impact on the interests of the company, which causes the decline in retail terminal performance. Secondly, the category structure is unreasonable, the product is too much or too little, and the probability of inventory risk is increased. In other words, merchandising is the steerer of a ship, and whether the steerer good or bad affects the passengers of the whole ship.

Candy-Shanghai multibrand buyer. 
As far as our company is concerned, the main reference factors are OTB, historical sales data, fashion trends, and the store display.

Midori-Shanghai-designer. 
So, our article has talked about some experimental ways to guide people in buying methods to make breakthroughs, to maximize profits.

-Yi Maoban-Shanghai-Wen Lv. 
Will merchandising affect the liquidity of the company?

Midori-Shanghai-designer. 
The impact is due to the limited budget for each product, limited shelf space, store space for commercial displays, and a limited number of suppliers are able to offer competitive products.

Merchandising develope on the basis of trade-off decisions between multiple decision factors (e.g. marketability, budget, economy) to meet customer requirements. Also they take the uniqueness of clothes products into consideration (e.g., short time to market, changing variables, unpredictable consumers).

Candy-Shanghai multibrand buyer. 

But even if these factors are taken into account, there will be a lot of restrictions in the specific purchase. At present, I feel in the purchase of good planning is just to give myself a concept, when we have specific orders it is not so easy to follow the plan. It’s a combination of reason and sensibility.

PART THREE  How to make a good Merchandising Planning?

There are many factors affecting merchandising planning.

Internal factors include: 

1. Budget (OTB).

2. The number of shops and the size of each store.

3. Brand positioning.

4. Historical sales data of previous years.

5. Product evaluation (marketability and sales cycle).

6. Product cost and fare increase.

7. Surplus inventory level and total inventory level.

External factors include: 

1. The characteristics and requirements of the target market.

2. Information of epidemic trend.

3. Competitor products and product planning.

4. Supplier evaluation.

5. The economic condition of the shop area and the disposable income of the customers.

6. Weather conditions and changes.

It is worth noting that sometimes it is necessary to consider the length of the product production cycle and whether the product can be launched on time as planned. If not, missing the sales session will affect sales, and we need to take timely measures to deal with it. This is a common problem in practice (such as setting aside a small portion of the buffer during a product planning to prevent a product delay, and preparing a plan B to replace the problem product, such as flipping through a list or getting a quick order with a common fabric in advance of the book).

In addition, when the design language is presented into the sales language, the terminal sales staff words is also very important. Because sales staffs are the people facing consumers ultimately, so sale words can highlight the advantages of the products and persuade consumers to buy more.
a. What are the factors that affect merchandising planning? 

Midori-Shanghai-designer. 

This part is mainly discussed from three aspects:

(1) Consumer cognition and preference.

(2) retailer constraint.

(3) external environmental factors.

 

Jason-Guangzhou-independent buyer + manager. 
As the article recommended by the teacher, there are internal and external environmental factors, 13 items to be taken into account in total.

Internal environmental considerations: 

1. Budget (OTB).

2. The number of shops and the size of each store.

3. Brand positioning.

4. Historical sales data of previous years.

5. Product evaluation (marketability and sales cycle).

6. Product cost and fare increase.

7. Surplus inventory level and total inventory level.

External environmental considerations: 

1. The characteristics and requirements of the target market.

2. Information of epidemic trend.

3. Competitor products and product planning;

4. Supplier evaluation.

5. The economic condition of the shop area and the disposable income of the customers.

6. Weather conditions and changes.

Candy-Shanghai multibrand buyer. 
I would like to know what the most important factors are in your respective companies?

Midori-Shanghai-designer. 
First one is budget. For most clothes retailers, the initial total budget is created by executives ahead of the new season or the start of the new year. Although product selection based on qualitative forecasts may seem easy, classification plannings are considered difficult because they are usually carried out within a limited budget.

Una-South Africa-former buyer. 
Merchandising efficiency.

Midori-Shanghai-designer. 
How does merchandising efficiency affect merchandising?

Yvonne-shanghai-clothes. 
I think we should take into account the length of the production cycle and whether or not we can launch the product on time as planned. If you can’t miss the sales session, that will affect your sales volume, then we need to take timely action to deal with it.  This is a common problem in practice (such as setting aside a small portion of the buffer during a product planning to prevent a product delay, and preparing a plan B to replace the problem product, such as flipping through a list or getting a quick order with a common fabric in advance of the book).

Lengyun-shanghai-master of group. 
That’s great. In reality, that’s the problem.

Yvonne-shanghai-clothes. 
Well, planning is very important, but can we go according to the plan? How to control should also be a task that is controlled by the buyer.

Midori-Shanghai-designer. 
In reality the supplier’s development cycle will also have a great impact.

Susan-Shanghai-buyer. 
In reality, what our company does not pay attention to is the level of surplus inventory and the total inventory level.

Candy-Shanghai multibrand buyer. 
Yes, in reality it will delay delivery due to the company’s liquidity problems.

Midori-Shanghai-designer. 
For example, the supplier cannot deliver the goods on time because of the planned style and quantity.

Una-South Africa-former buyer. 
I think merchandising efficiency is the key point that must be analyzed before each purchase by analyzing the historical data on the sell-out rate and by analyzing SKU / each item / each category. Make sure you know exactly what to do, and then plan for a specific implementation plan.

Lengyun-shanghai-master of group. 
That’s right. All this needs to be considered in the early stages of development.

Jason-Guangzhou-independent buyer + manager. 
Another point is that when the design language is translated into the sales language, it is also very important for the Fab knowledge to be well translated into the words of the terminal salesperson, because it is salespeople who face the consumers.

Jason-Guangzhou-independent buyer + manager. 
This will also be reflected in the planning.

Candy-Shanghai multibrand buyer. 
Also, I think we need to reflect on our plans for the last quarter, which will help us to find out problems. Our company is lacking of reflection at the end of the quarter.

Una-South Africa-former buyer. 
It seems that there’s no time for reflection. You’re right.

Candy-Shanghai multibrand buyer. 
Usually it’s finished after the project is done and the goods are sold out.

b. What is the basis for merchandising? 

Una-South Africa-former buyer. 

Merchandising is based on:

1. Sales forecast;

2. Historical sales;

3. consumers’ perceived preferences (consumer instability)

4. Retailer constraints (physical space / market positioning, etc.);

5. External environment (macroeconomic / changing trends in consumer lifestyles, etc.).

Midori-Shanghai-designer. 
That’s right.

Deng Hua-Shanghai-Buyer of Children’s Wear. 
Ecommerce business also considers platform activity time and discount.

Midori-Shanghai-designer. 
Are there any problems during the implementation of these principles?

Hangzhou-buyer-Crystal. 
First of all, according to the purchasing planning for the entire quarter, the full indicator determines the quantity of goods for the quarter.

Secondly, the width and depth of the merchandise is determined by the number and size of the existing and the next three months’ total stores. Referring to the historical sales data of previous years, we can judge the demand planning and sales positioning of sales in this quarter. For the categories missing from previous years, we should adjust and improve the category structure in time this year. Besides, according to the existing inventory, control the overall issue of orders inventory. The time to market is determined by the sales cycle of the merchandise, the delivery time of the supplier and the recent weather changes.

Jing Jing-Hangzhou-Jewelry sales. 
Check deviations between planned and actual sales.

Midori-Shanghai-designer. 
When everybody is making the merchandising, what kind of problem consult historical data will appear?

Una-South Africa-former buyer.
Can ‘consumer instability’ be one problem?

Midori-Shanghai-designer. 
Yeah. For example, a good model selling well in the last season will be done a continuation in this season. Will this continuation sell well?

Una-South Africa-former buyer. 
I usually combine the latest fashion trends in Europe and the United States to design merchandises for new season.

 Li Fangfang-Shanghai-Cross-border e-commerce operations. 
The problem for me is that the difference between the new sales target and the historical sales data market.

Hangzhou-buyer-Crystal. 
The difference in the number of stores, such as 10 stores in the first year and 80 or 90 stores in the second year, makes the reference accuracy of the sales data low.

Candy-Shanghai multibrand buyer. 
Yes. For example changes in stores. Shopping mall changes will greatly affect sales, if not take them into account, these reference historical data will have a large deviation.

Li Fangfang-Shanghai-Cross-border e-commerce operations. 
Team competencies are not taken into account and the channel structure has changed.

Deng Hua-Shanghai-Buyer of Children’s Wear. 
Some categories which are missing last year will be enlarged in this year. If the degree of amplification is not controlled well, there will be inventory sharing.

Midori-Shanghai-designer. 
Yes, so what is the reasonable choice for historical reference data?

Li Fangfang-Shanghai-Cross-border e-commerce operations. 
Percentage of 80% as a reference to 20% is recommended as a supplement to other anomalies.

Candy-Shanghai multibrand buyer. 
I think there should be a very detailed analysis on the historical data, such as what the specific factors leading to sales rising are, whether this factor will still exist in the next quarter, and whether there are other factors.

Deng Hua-Shanghai-Buyer of Children’s Wear. 
We should not only refer to historical data, but also look at trends.

-Yi Maoban-Shanghai-Wen Lv. 
Will fashion trends affect it?

Candy-Shanghai multibrand buyer. 
If most of the store environment has changed, the data is of little reference value.

Jing Jing-Hangzhou-Jewelry sales. 
Combine the historical data and the surrounding environment together.

Amin-Shenzhen handbag design. 
In the case of performance not particularly good and the pace of previous shipment not very normal, almost it’s impossible to find the reference of the previous planning.

Li Fangfang-Shanghai-Cross-border e-commerce operations.
Should we consider the weight of historical data?

Candy-Shanghai multibrand buyer. 
Yeah, there’s still a lot of variation.

Una-South Africa-former buyer. 
That is to refer to historical data while combining trends with the external environment. Right?

Candy-Shanghai multibrand buyer. 
The weight of historical data requires specific shop analysis. The general environment can almost refer to more, otherwise we should be cautious.

Una-South Africa-former buyer. 
I think this issue of weight cannot be quantified. Who knows how much has changed?

Midori-Shanghai-designer. 
Apart from historical data, is there any problem with cost control?

-Yi Maoban-Shanghai-Wen Lv. 
Cost control should be a very important factor in planning.

Li Fangfang-Shanghai-Cross-border e-commerce operations. 
About how to forecast the cost of the new quarter and the market environment changes, we are relatively uncontrollable.

Una-South Africa-former buyer. 
I think it is a difficult problem to increase fees and charges by multiples and discounts.

Candy-Shanghai multibrand buyer. 
Our company buyers do not need to consider much in this aspect, the range of price increases is certainly fixed. In our company, this mainly depends on the requirements of the management for the company’s gross profit margin.

Li Fangfang-Shanghai-Cross-border e-commerce operations. 
Plus, we’re fixed, too.

Ziwen-Ningbo-ecommerce. 
The reference value of historical data is limited. As for seasons, holidays, the renewal of their own products, the changes of actual operation of the store sales team, it is difficult to say. Changes are based on the actual market, and there is no law in the short term. If the database is relatively large and the content is relatively rich, the reference may be large and the more stable classic product data reference will be a little larger.

Zitong-shanghai-merchandising. 
We also have a fixed rate of increase.

Midori-Shanghai-designer. 
Our company here also first sets a multiple of the increase, sets a retail price tag, and then controls the cost of production.

-Yi Maoban-Shanghai-Wen Lv. 
Isn’t it possible to set a certain range for fare increase multiples? The sales model and cost control of each company should be fixed. Only when the increase multiple is sure will it make money.

Candy-Shanghai multibrand buyer. 
Right. Therefore, I feel that the specific implementation of the buyer here seems to have nothing to do, but control mainly when the activities of discount.

Deng Hua-Shanghai-Buyer of Children’s Wear. 
The rate of increase will vary according to the different types.

Li Fangfang-Shanghai-Cross-border e-commerce operations. 
Control of gross profit rate, right?

Deng Hua-Shanghai-Buyer of Children’s Wear. 
But there’s a bottom line.

Abby-Guangzhou-Merchandising Manager. 
Yes, according to the enterprise gross profit target to specify the increase multiple.

Amin-Shenzhen handbag design. 
Our accessories are prepared in advance after the planning out to control costs. Leathers of handbags account for a high proportion of the cost. Having set the price of fabrics, the cost is relatively easy to control.

-Yi Maoban-Shanghai-Wen Lv. 
Is the float going to be very large, say, 5 for the most part, and then one of the categories becomes 2 or 3?

Una-South Africa-former buyer. 
We used to be buyers who set premium multiples for each style, as long as the average premium multiple was reasonable. Then it’s ok.

But the drawback is:

1. Buyers are doing it entirely on the basis of their own experience.

2. If the price of certain models is too high or too low, it will affect profits.

So, does anyone have the best way?

Midori-Shanghai-designer. 
Floats typically do not exceed 2.

Candy-Shanghai multibrand buyer. 
This depends on whether the style is run or image. Different styles will have some different strategies, but the difference is not big.

Deng Hua-Shanghai-Buyer of Children’s Wear. 
We’ll base it on the positioning of the money.

-Yi Maoban-Shanghai-Wen Lv. 
I think the average premium multiple control is reasonable, after all, there will be consumers feeling that low prices of one category and buy other merchandise by the way.

Midori-Shanghai-designer. 
On this issue, it is generally possible to limit the price band.

Li Fangfang-Shanghai-Cross-border e-commerce operations. 
Have any statistics been made on the changes in the rate of fare increase and the rate of conversion of consumers, and the extent to which they have been affected?

Abby-Guangzhou-Merchandising Manager. 
We usually plan the pricing strategies, that the proportion of high price, middle price and low price segments.

Una-South Africa-former buyer. 
By the way, I remember that the teacher’s curriculum has mentioned the drainage section, the star section, and the image section.

Midori-Shanghai-designer. 
Make the distinction of premium multiple inside different price belt, then be very clear about the fixed position of run quantity paragraph, and the image paragraph.

Merchandising is based on:

1. Sales forecast;

2. Historical sales;

3 consumers’ perceived preferences (consumer instability);

4. Retailer constraints (physical space / market positioning, etc.);

5. External environment (macroeconomic / changing trends in consumer lifestyles, etc.).

If it is an ecommerce platform, we should also consider the time of platform activity and discount dynamics.

 

c. How to plan merchandises (online and offline) according to the different nature of buying them?

 

As the online and offline platforms are different in nature, the merchandising planning of these two platforms should be different as well. The customers online are much more than that  of offline. Thus, the biggest difference between planning in online and offline distributions should be the allocation frequency and the diversity of categories.

Sales attributed by different stores are different as well. For example, flagship stores and Taobao c stores has been allocated different styles and quantity requirements. In general, the brand flagship stores have a shorter sales cycle.

As for merchandising planning, some companies utilize an online-offline mixed strategy. Online platforms are responsible for selling new collection and inventory online when offline platforms take charge of displaying products, building lifestyle concept and communicate with customers. The SKU number online is much bigger than that of offline. Online merchandising content will be detailed designed, including new band SKU number, style length, thickness, fabric properties, and price band.

But some companies utilized a contingent merchandising planning online and offline. They do not have any discount both online and offline, so there is no specific online planning. The strategy online is only selling more of each hot product.

Una-South Africa-former buyer.
The first difference between online and offline, I think it should be “style and quantity”. The online range is larger and the offline range is limited.

Deng Hua-Shanghai-Buyer of Children’s Wear. 
Merchandises online are included many the category-oriented.

Midori-Shanghai-designer. 
Because online merchandises are sold according to platform activities, it is required to be fast in terms of upfront periodicity.

Zitong-shanghai-merchandising. 
I think the biggest difference between online and offline is the frequency and type of stock.

Midori-Shanghai-designer. 
So, how do you differentiate between online and offline merchandising, and what is the difference between what is going on, online or offline?

Amin-Shenzhen handbag design. 
The same brand online and offline planning data base is not the same, and customer groups are not the same.

Li Fangfang-Shanghai-Cross-border e-commerce operations. 
Crowd, merchandise life cycle, loading frequency, replenishment cycle.

Midori-Shanghai-designer. 
So, what are your requirements on the replenishment cycle?

Deng Hua-Shanghai-Buyer of Children’s Wear. 
Online planning is mainly based on the activity of sales data to test the tracking.

Li Fangfang-Shanghai-Cross-border e-commerce operations. 
And promotion.

Deng Hua-Shanghai-Buyer of Children’s Wear. 
If you want to catch up with the sale, you have to prepare the fabric in advance.

Li Fangfang-Shanghai-Cross-border e-commerce operations. 
Yes, I agree.

Una-South Africa-former buyer. 
Then I have to think of the terrible ‘inventory’.

Li Fangfang-Shanghai-Cross-border e-commerce operations. 
Supply chain response is slow. Not preparing inventory, you had better prepare fabric.

Midori-Shanghai-designer. 
Because of online platform, it is the idea that clears stock before. Nowadays does everybody still plan so?

Li Fangfang-Shanghai-Cross-border e-commerce operations. 
Our platform is dominated by new models.

Una-South Africa-former buyer. 
Isn’t the fabric inventory?

Deng Hua-Shanghai-Buyer of Children’s Wear. 
There will be plans to set different discounts according to the old and new items at the time of the activity.

Zitong-shanghai-merchandising. 
Basic fabric can be, or can be prepared for the embryo cloth.

Midori-Shanghai-designer. 
About the merchandising online, what is the difference between the SKU number and the offline merchandising?
Li Fangfang-Shanghai-Cross-border e-commerce operations. 
The number of booths on the line is much larger than that off the line, and the number of booths is infinite.

-Yi Maoban-Shanghai-Wen Lv. 
I think it is more reliable to change the sales model.

Fioriah-Shanghai-Brand and Market expansion. 
We mainly sell new models and digest inventory online while display merchandise and lifestyle offline. In SKU, online is much larger than offline.

Midori-Shanghai-designer. 
Any other suggestions?

Una-South Africa-former buyer. 
I have not done online, but weakly ask: I have seen some online shops but sku is not many, and the category is not complete, but single sales are particularly large. What’s going on here?

Deng Hua-Shanghai-Buyer of Children’s Wear. 
About our online, sku numbers are based on the target amount and volume for the current season. The depth of each category is certain and online may not necessarily be greater than offline.

Una-South Africa-former buyer. 
Is it possible to say that there are two types of online:

1.There is a complete range (of all kinds).

2. Earmarked funds (I sell dresses, or hooded sweatshirt).

Ada- Supervisor-Guangzhou. 
We are selling flat & unsalable money online because the discount is stable at 70%-80% discount on line (except for off-season clearance) so the best-selling model or the newly launched band will not be sold online.

Hangzhou-buyer-Crystal. 
We are online and offline unified, we are not discounted both online and offline, so there is no specific online planning. As far as I understand, there is no strict category structure planning online, but more important thing is the amount of running in a single model.

Deng Hua-Shanghai-Buyer of Children’s Wear. 
More category-oriented.

Midori-Shanghai-designer. 
Planning on line should be divided by the shop attribute. For example, brand flagship stores, Taobao c stores. Different stores have different requirements of style and quantity. In general, the brand flagship stores have a faster new cycle.

Ziwen-Ningbo-ecommerce. 
Online good operation is very powerful, and of course, there must be enough money to support.

Jason-Guangzhou-independent buyer + manager. 
Now a lot of brands because of good online sales, dedicate style to the online team, different from offline merchandises.

Deng Hua-Shanghai-Buyer of Children’s Wear. 
Yes, we have online and offline two separated teams.

Midori-Shanghai-designer. 
Our company is separated from online and offline, and the planning is also carried out separately. Online merchandising content will be specific to platform activities, new band, SKU number, style length, thickness, fabric properties, and price band.

Jason-Guangzhou-independent buyer + manager. 
Many aspects will be considered. For example, the supply chain fast reverse, and development of a big data analysis of user needs and characteristics, should be more based on the reverse sales, rather than based on the traditional design to promote.

Midori-Shanghai-designer. 
So what about offline merchanising planning?

Una-South Africa-former buyer. 
Offline merchandising is more about combining local needs with other factors we’ve discussed before. It is regionalization that is more distinct.

Midori-Shanghai-designer. 
However, in the case of specific operations, there are a normal order and a quick order which have operational differences between the two. The periodicity of a normal order is based on the factors we discussed earlier. As for the planning, a fast order belongs to the type of fast reflection.

Jason-Guangzhou-independent buyer + manager. 
Personal summary: merchandising is selling the merchandises to the right people at the right time, the right place, with the right merchandises, and the right price. It should be a balance, and a rational and emotional combination!

 

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