CTD 481 Lecture 3: CTD 481 Merchandising Concepts Notes

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Clothing, Textiles and Interior Design
CTD 481

CTD 481 Merchandising Concepts Definition of Merchandising • Planning, developing, and presenting product line(s) for identified target market(s) with regard to pricing, assorting, styling, and timing • Retailing is selling goods and services to the ultimate consumer Merchandising Leaders • Attributes merchandising leaders: ➢ Create trends ➢ Lead their customers ➢ Push the envelope in product development ➢ Cold-heartedly kill the dogs (items that don’t sell) ➢ Encourage responsible risk ➢ Strive relentlessly ➢ Have swagger and bravado ➢ Examples: high fashion – Karl Lagerfeld, Zara, H&M “Tired” Merchandisers • Attributes of “tired” merchandisers: ➢ Wait for customers to accept trends ➢ Merchandise based on history ➢ Rely on line extensions ➢ Are risk-averse in product development ➢ Focus on the fact that most products fail ➢ Carry too many unproductive SKUs ➢ Examples: small-town Belk, JCPenny, Kohl’s, Old Navy, Sears Taxonomy of Apparel Merchandising Systems (TAMS) • Assumptions related to TAMS: 1. Merchandising is a dynamic process of intense change 2. The merchandising cycle represented by TAMS is one year, beginning the first week of February and ending the last week of January 3. Each merchandising cycle is made up of selling seasons or selling periods made up of weeks of sale 4. Merchandisers commonly work on several different selling periods at the same time 5. A product line consists of a combination of styles that satisfy similar or related customer needs, can be sold within the targeted price range, and are marketed with similar strategies 6. Large apparel firms may have several product lines for each selling period ➢ BCBG, Ralph Lauren, Marc Jacobs – can either be different price points or different lines Merchandising Technology • Goals of Merchandising Technology: 1. Use time effectively 2. Increase merchandising accuracy 3. Optimize benefits to the firm and the consumer • Ultimate goal: optimize sales at first price based on minimum inventory throughout the supply system • Customer makes a purchase at a retail store • Sale is recorded via point of sale (POS) system • Transaction uses scanner and a universal product code (UPC) • Information relayed via electronic data interchange (EDI) to the retailer’s and vendor’s data systems and to the vendor’s materials suppliers • Replacement depends on predetermined agreements and/or automatic replenishment models – cosmetics, lingerie, some men’s shoes • Merchandise is delivered to the retailer shelf or hanger ready • Delivery via drop shipment or cross docking strategies Merchandising Process • The flow of how a product moves through the merchandising process Fashion Industry Flow • Wholesaler  Buyer  Retail Floor  End Consumer 4-5-4 Retail Calendar • Two seasons: fall and spring ➢ Fall: August – January ➢ Spring: February – July • 52 week calendar (might be 53 every 5-6 years due to leap days) • Same number of Saturdays and Sundays for easier comparison • Keeps busiest months of December and July in separate seasons Timeline of Merchandising Process • Pre-Market: preparations and tasks to prepare for market • Market: what happens during market week • Post-Market: the production process and getting merchandise to the retail floor • Retail Floor: analyzing and responding to performance of merchandise Wholesalers • Develop lines and collections to sell to buyers/retailers: ➢ Rebecca Taylor, French Connection, Joie, A.L.C, etc. are all examples ➢ May also have their own
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