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RMG 200 (57)
Brent Barr (19)

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Ryerson University
Retail Management
RMG 200
Brent Barr

Store Level Forecasting To predict store level demand, forecasting systems need to be able to measure simultaneously the impacts of any factors on unit sales, which includes: Price The amount of unit sales of an item obviously depends on the price at which it is offered Promotion The degree and type of promotion are also critical in determining the unit sales of an item Store Location can be large variations in demand depending on store location Product The amount of shelf space afforded an item, as well as its location on the shelf, can have a large Placement impact on sales Seasonality Some categories eg. apparel are highly seasonal in nature Other Factors - Product life cycle – knowledge of whether product demand is growing, stable, or in decline is important - Product availability – the degree to which the merchandise is, or is not, on the shelves ready for sale impact sales - Competitor price and promotional activity – these also affect a retailer’s sales - Business cycles – sales may be higher at the beginning of the month due to payroll cycles; also, sales are higher on weekends than weekdays - Weather – late or early arrival of hot or cold weather can have a significant impact on sales of seasonal items - Unusual events – a new highways, unexpected store, natural disasters - Cannibalization – decreasing price of Apple Jacks would increase sales but perhaps deteriment of sales of Froot Loops - Complementary products – putting dogs on sales will also cause an increase in sales of hot dog buns SETTING OBJECTIVES FOR THE MERCHANDISE PLAN - Defining target market - Establishing performance goals - Deciding, on the basis of general trends in the marketplace, which merchandise classifications deserve more or less emphasis - Merchandise plan: a plan used by buyers to determine how much money to spend in each month on a particular fashion merchandise category, given the firm’s sales forecast, inventory turnover, and profit goals THE ASSORTMENT PLANNING PROCESS - A list of SKUs that a retailer will offer in a merchandise category - Reflects the variety (breadth) and assortment (depth) that can be the retailer plans to offer in a merchandise category Category Variety and Assortment - Variety (aka breadth): the number of different merchandise categories within a store or department - Assortment (aka depth): the number of SKUs within a merchandise category - Assortment planning involves decisions concerning the amount of merchandise choice that is available to the customer Examples: Broad and Shallow - Stocks a broad assortment of styles to satisfy Club Monaco Assortment Planning the style conscious consumer but does not carry depth in any particular item - Customer is more selective about style, size, and colour, and will change with the newest trends Narrow and Deep - Mass merchandisers Walmart, Zellers Assortment Planning - Only a few choices in particular category, but is stocked in considerable depth Square Assortment - Traditional department stores Bay, Sears Planning - Limited depth within the categories to avoid having an overstock situation that could result in markdowns and a loss of revenue at
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