Description
In the broadest sense, merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to the variety of products available for sale and the display of those products in such a way that it stimulates interest and entices customers to make a purchase.
Implementing Merchandise Plans
Chapter Objectives
? To describe the steps in the implementation of merchandise plans: gathering information, selecting and interacting with merchandise sources, evaluation, negotiation, concluding purchases, receiving and stocking merchandise, reordering, and re-evaluation ? To examine the prominent roles of logistics and inventory management in the implementation of merchandise plans
15-2
Figure 15.1 The Process for Implementing Merchandise Plans
15-3
Figure 15.2 A Competition Shopping Report
15-4
Figure 15.3 Outside Sources of Supply
15-5
Selecting Merchandise Sources
? Company-owned ? Outside, regularly used supplier ? Outside, new supplier
15-6
Figure 15.4 A Checklist of Points to Review in Choosing Vendors
15-7
Figure 15.5 A Collaborative Supplier-Retailer Program
15-8
Negotiating the Purchase
? Opportunistic buying ? Slotting allowances
15-9
Concluding Purchases
? The retailer takes title immediately on purchase ? The retailer assumes ownership after titles are loaded onto the mode of transportation ? The retailer takes title when a shipment is received ? The retailer does not take title until the end of a billing cycle, when the supplier is paid ? The retailer accepts merchandise on consignment and does not own the items. The supplier is paid after merchandise is sold
15-10
Figure 15.6 Receiving and Stocking Merchandise at Category Killer Stores
15-11
Figure 15.7 The Monarch 1130 Series Labeler
15-12
Figure 15.8 Bar Tender for Windows
15-13
Reordering Merchandise
? Four critical factors: * Order and delivery time * Inventory turnover * Financial outlays * Inventory versus ordering costs
15-14
Logistics
Logistics is the total process of planning, implementing, and coordinating the physical movement of merchandise from manufacturer (wholesaler) to retailer to customer in the most timely, effective, and cost-efficient manner possible
15-15
Figure 15.9 The Sophisticated Logistics System of Reitmans
15-16
Performance Goals
? Relate costs incurred to specific logistics activities ? Place and receive orders as easily, accurately, and satisfactorily as possible ? Minimize the time between ordering and receiving merchandise ? Coordinate shipments from various suppliers ? Have enough merchandise on hand to satisfy customer demand, without having so much inventory that heavy markdowns will be necessary
15-17
Performance Goals_2
? Place merchandise on the sales floor efficiently ? Process customer orders efficiently and in a manner satisfactory to customers ? Work collaboratively and communicate regularly with other supply chain members ? Handle returns effectively and minimize damaged products ? Monitor logistics’ performance ? Have backup plans in case of breakdowns in the system
15-18
Supply Chain Management
? The supply chain is the logistics aspect of a value delivery chain * Parties involved • Manufacturers • Wholesalers • Third-party specialists • Retailer
15-19
Order Processing and Fulfillment
? Quick Response Inventory Planning (QR) ? Floor-ready merchandise ? Efficient Consumer Response (ECR)
15-20
Transportation and Warehousing
? How often will merchandise be shipped to the retailer? ? How will small order quantities be handled? ? What shipper will be used? ? What transportation form will be used? Are multiple forms required? ? What are the special considerations for perishables and expensive merchandise? ? How often will special shipping arrangements be necessary? ? How are shipping terms negotiated with suppliers? ? What delivery options will be available for the retailer’s customers?
15-21
Figure 15.10 Claire’s Aggressive Use of Central Warehousing
15-22
Problems Balancing Inventory Levels
? The retailer wants to be appealing and never lose a sale by being out of stock; it does not want to be “stuck” with excess merchandise ? What fad merchandise and how much should be carried? ? Customer demand is never completely predictable ? Shelf space allocation should be linked to current revenues
15-23
Figure 15.11 Sensormatic: The Leader in Store Security Systems
15-24
Figure 15.12 Ways Retailers Can Deter Employee and Shopper Theft
? Employee Theft * Use honesty tests as employee screen-in devices * Lock up trash to prevent merchandise from being thrown out and then retrieved * Verify through cameras and undercover personnel whether all sales are rung up * Centrally control all exterior doors to monitor opening/ closing * Divide responsibilities – have one employee record sales and another make deposits * Give rewards for spotting thefts * Have training programs * Vigorously investigate all known losses and fire offenders immediately
15-25
Figure 15.12 Ways Retailers Can Deter Employee and Shopper Theft
? Shopper Theft While Store is Open * Use uniformed guards * Set up cameras and mirrors to increase visibility – especially in low-traffic areas * Use electronic article surveillance for high-value and theftprone goods * Develop comprehensive employee training programs * Offer employee bonuses based on an overall reduction in shortages * Inspect all packages brought into store * Use self-locking showcases for high-value items such as jewelry * Attach expensive clothing together * Alternate the direction of hangers on clothing near doors * Limit the number of entrances and exits to the store, and the dollar value and quantity of merchandise displayed near exits * Prosecute all individuals charged with theft
15-26
Figure 15.12 Ways Retailers Can Deter Employee and Shopper Theft
? Employee/ Shopper Theft While Store is Closed * Conduct a thorough building check at night to make sure no one is left in store * Lock all exits, even fire exits * Utilize ultrasonic/infrared detectors, burglar alarm traps, or guards with dogs * Place valuables in a safe * Install shatterproof glass and/or iron gates on windows and doors to prevent break-ins * Make sure exterior lighting is adequate * Periodically test burglar alarms
15-27
Reverse Logistics
? All merchandise flows from the retailer back through the supply channel ? Reverse Logistics Decisions * Under what conditions are customer returns accepted by the retailer and by the manufacturer? * What is the customer refund policy? Is there a fee for returning an opened package? * What party is responsible for shipping a returned product to the manufacturer? * What customer documentation is needed to prove the date of purchase and the price paid? * How are customer repairs handled? * To what extent are employees empowered to process customer returns?
15-28
Figure 15.13 Ryder: A Solution for Reducing the Investment in Inventory
15-29
UPS E-Logistics
15-30
doc_651115217.ppt
In the broadest sense, merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to the variety of products available for sale and the display of those products in such a way that it stimulates interest and entices customers to make a purchase.
Implementing Merchandise Plans
Chapter Objectives
? To describe the steps in the implementation of merchandise plans: gathering information, selecting and interacting with merchandise sources, evaluation, negotiation, concluding purchases, receiving and stocking merchandise, reordering, and re-evaluation ? To examine the prominent roles of logistics and inventory management in the implementation of merchandise plans
15-2
Figure 15.1 The Process for Implementing Merchandise Plans
15-3
Figure 15.2 A Competition Shopping Report
15-4
Figure 15.3 Outside Sources of Supply
15-5
Selecting Merchandise Sources
? Company-owned ? Outside, regularly used supplier ? Outside, new supplier
15-6
Figure 15.4 A Checklist of Points to Review in Choosing Vendors
15-7
Figure 15.5 A Collaborative Supplier-Retailer Program
15-8
Negotiating the Purchase
? Opportunistic buying ? Slotting allowances
15-9
Concluding Purchases
? The retailer takes title immediately on purchase ? The retailer assumes ownership after titles are loaded onto the mode of transportation ? The retailer takes title when a shipment is received ? The retailer does not take title until the end of a billing cycle, when the supplier is paid ? The retailer accepts merchandise on consignment and does not own the items. The supplier is paid after merchandise is sold
15-10
Figure 15.6 Receiving and Stocking Merchandise at Category Killer Stores
15-11
Figure 15.7 The Monarch 1130 Series Labeler
15-12
Figure 15.8 Bar Tender for Windows
15-13
Reordering Merchandise
? Four critical factors: * Order and delivery time * Inventory turnover * Financial outlays * Inventory versus ordering costs
15-14
Logistics
Logistics is the total process of planning, implementing, and coordinating the physical movement of merchandise from manufacturer (wholesaler) to retailer to customer in the most timely, effective, and cost-efficient manner possible
15-15
Figure 15.9 The Sophisticated Logistics System of Reitmans
15-16
Performance Goals
? Relate costs incurred to specific logistics activities ? Place and receive orders as easily, accurately, and satisfactorily as possible ? Minimize the time between ordering and receiving merchandise ? Coordinate shipments from various suppliers ? Have enough merchandise on hand to satisfy customer demand, without having so much inventory that heavy markdowns will be necessary
15-17
Performance Goals_2
? Place merchandise on the sales floor efficiently ? Process customer orders efficiently and in a manner satisfactory to customers ? Work collaboratively and communicate regularly with other supply chain members ? Handle returns effectively and minimize damaged products ? Monitor logistics’ performance ? Have backup plans in case of breakdowns in the system
15-18
Supply Chain Management
? The supply chain is the logistics aspect of a value delivery chain * Parties involved • Manufacturers • Wholesalers • Third-party specialists • Retailer
15-19
Order Processing and Fulfillment
? Quick Response Inventory Planning (QR) ? Floor-ready merchandise ? Efficient Consumer Response (ECR)
15-20
Transportation and Warehousing
? How often will merchandise be shipped to the retailer? ? How will small order quantities be handled? ? What shipper will be used? ? What transportation form will be used? Are multiple forms required? ? What are the special considerations for perishables and expensive merchandise? ? How often will special shipping arrangements be necessary? ? How are shipping terms negotiated with suppliers? ? What delivery options will be available for the retailer’s customers?
15-21
Figure 15.10 Claire’s Aggressive Use of Central Warehousing
15-22
Problems Balancing Inventory Levels
? The retailer wants to be appealing and never lose a sale by being out of stock; it does not want to be “stuck” with excess merchandise ? What fad merchandise and how much should be carried? ? Customer demand is never completely predictable ? Shelf space allocation should be linked to current revenues
15-23
Figure 15.11 Sensormatic: The Leader in Store Security Systems
15-24
Figure 15.12 Ways Retailers Can Deter Employee and Shopper Theft
? Employee Theft * Use honesty tests as employee screen-in devices * Lock up trash to prevent merchandise from being thrown out and then retrieved * Verify through cameras and undercover personnel whether all sales are rung up * Centrally control all exterior doors to monitor opening/ closing * Divide responsibilities – have one employee record sales and another make deposits * Give rewards for spotting thefts * Have training programs * Vigorously investigate all known losses and fire offenders immediately
15-25
Figure 15.12 Ways Retailers Can Deter Employee and Shopper Theft
? Shopper Theft While Store is Open * Use uniformed guards * Set up cameras and mirrors to increase visibility – especially in low-traffic areas * Use electronic article surveillance for high-value and theftprone goods * Develop comprehensive employee training programs * Offer employee bonuses based on an overall reduction in shortages * Inspect all packages brought into store * Use self-locking showcases for high-value items such as jewelry * Attach expensive clothing together * Alternate the direction of hangers on clothing near doors * Limit the number of entrances and exits to the store, and the dollar value and quantity of merchandise displayed near exits * Prosecute all individuals charged with theft
15-26
Figure 15.12 Ways Retailers Can Deter Employee and Shopper Theft
? Employee/ Shopper Theft While Store is Closed * Conduct a thorough building check at night to make sure no one is left in store * Lock all exits, even fire exits * Utilize ultrasonic/infrared detectors, burglar alarm traps, or guards with dogs * Place valuables in a safe * Install shatterproof glass and/or iron gates on windows and doors to prevent break-ins * Make sure exterior lighting is adequate * Periodically test burglar alarms
15-27
Reverse Logistics
? All merchandise flows from the retailer back through the supply channel ? Reverse Logistics Decisions * Under what conditions are customer returns accepted by the retailer and by the manufacturer? * What is the customer refund policy? Is there a fee for returning an opened package? * What party is responsible for shipping a returned product to the manufacturer? * What customer documentation is needed to prove the date of purchase and the price paid? * How are customer repairs handled? * To what extent are employees empowered to process customer returns?
15-28
Figure 15.13 Ryder: A Solution for Reducing the Investment in Inventory
15-29
UPS E-Logistics
15-30
doc_651115217.ppt