1. 14 C HAPTER 14 Developing Merchandise Plans RETAIL MANAGEMENT: A STRATEGIC APPROACH

2. A GENDA Administrative Retail Institutions Debrief Newswatch Assignment Overview Discuss Merchandising Philosophy Introductory concepts Category Management Manufacturers go online

3. W HAT ’ S H APPENING IN R ETAIL ? Sears to sell 4 locations HMV finally gets into digital apps

4. M ERCHANDISING Activities involved in acquiring particular goods and/or services and making them available at the places, times, and prices and in the quantities that enable a retailer to reach its goals.

5. Sets the guiding principles for all the merchandise decisions that a retailer makes Should reflect: Target market desires Marketplace positioning Retailer’s institutional type Defined value chain Supplier capabilities Costs Competitors Product trends M ERCHANDISING P HILOSOPHY Does JC Penney’s move to a store-within-a- store concept with Joe Fresh reflect all of these things?

6. S COPE OF R ESPONSIBILITY Merchandising view All buying and selling functions Assortments Advertising Pricing Point-of-sale displays Employee utilization Personal selling approaches Merchandising view All buying and selling functions Assortments Advertising Pricing Point-of-sale displays Employee utilization Personal selling approaches Buying view  Buyers manage buying functions  In-store personnel manage other functions Assortments Point-of-sale displays Employee utilization Personal selling approaches Buying view  Buyers manage buying functions  In-store personnel manage other functions Assortments Point-of-sale displays Employee utilization Personal selling approaches

7. M ERCHANDISING V. S TORE M ANAGEMENT C AREER T RACKS AT H BC

8. T WO M ERCHANDISING S TRATEGIES Retailer adjusts shelf-space allocations to respond to customer and other differences among local markets Cross-merchandising Retailers carry complementary goods and services to encourage shoppers to buy more Micromerchandising Is cross-merchandising different from scrambled merchandising?

9. S CRAMBLED M ERCHANDISING

10. B UILD -A-B EAR W ORKSHOP www.buildabear.com

11. C HOOSE ME

12. H EAR M E

13. S TUFF ME

15. F LUFF ME

16. D RESS ME

17. N AME M E

18. B UILD - A - BEAR W ORKSHOP Target Market Positioning Describe BABW’s merchandising plan

19. M ERCHANDISING P LANS

20. B UILD -A-B EAR A SSORTMENT

21. R ETAIL A SSORTMENT S TRATEGIES EXAMPLES??

22. F ORECASTING - T YPES OF M ERCHANDISE Necessary to distinguish b/w types of merchandise when forecasting: Staple merchandise (i.e. ‘Bearemy’) Assortment merchandise Fashion merchandise (clothing) Seasonal merchandise (Christmas, Halloween, Easter) Fad merchandise

23. P LANNING M ERCHANDISE I NNOVATIVENESS Your text lists a variety of factors retailers need to consider w.r.t. merchandise innovativeness Customer considerations Target market conservative or innovative? What segments exist? Responsiveness to their needs Fashion trend demand (vertical/horizontal) Competitive considerations Operations considerations Amount of investment Growth potential Profitability Risk Impact on image Trade-offs (de-listing older merchandise) Be aware of the product’s life cycle

24. S TRUCTURED G UIDELINES FOR P RUNING P RODUCTS 1. Select items for possible elimination on the basis of declining sales, prices, and profits, appearance of substitutes 2. Gather and analyze detailed financial and other data (such as core customer preferences) about these items 3. Consider nondeletion strategies such as cutting costs, revising promotion efforts, adjusting prices 4. After making a deletion decision, do not overlook timing, parts and servicing, inventory, and holdover demand

25. B RANDS - M ERCHANDISE Q UALITY The battle of the brands p. 366 Private (dealer or store) Private (dealer or store) Manufacturer (national) Manufacturer (national) Generic

26. S UNRIPE P RIVATE L ABEL S TRATEGY Describe Sunripe’s Retail Strategy Mix. What is Sunripe’s Retail Value Proposition? Describe Sunripe’s merchandising plan. Describe Sunripe’s private label products. What are the advantages and disadvantages of private label products generally? Describe the private label buyer generally. How important are private labels to the Sunripe customer? What should Sunripe do to leverage its private labels and continue to grow its business?

27. F IGURE 14.9 R ETAIL A SSORTMENT S TRATEGIES

28. P RIVATE L ABEL P RODUCTS Advantages Control Profit margins higher Competitive differentiation Can generate loyalty (quality dependent) Disadvantages Lower brand equity/awareness Perceived lower quality No manufacturer promotional support Do not drive traffic as well as national brands

29. W HAT IS C ATEGORY M ANAGEMENT ? process consumer A Retailer/Supplier process of managing categories as strategic business units, producing enhanced business results by focusing on consumer value Category Management is a Process and involves a series of interrelated activities Category Management is comprised of distinctly different supplier and retailer components and cannot be done alone by either Category Management has been shown to lead to improved business results and improved relationships between trading partners

30. Retailer & Manufacturer Category Planning Implementation Category Management Practices C ATEGORY M ANAGEMENT Retailer Develops Store-Level Marketing Plans Manufacturer Develops Marketing Plans and Programs for Brands Implementation Traditional Business Practices

31. A N EW W AY OF D OING B USINESS Brand/SKU Management Retailer Focused Tactics Deal-Based Decision Making Reactive Business Planning Adversarial Work Process Category/Brand/SKU Management Consumer Focused Tactics Data-Based Decision Making Proactive Business Planning Collaborative Work Process OLDNEW

32. F IGURE 14.13 A PPLYING C ATEGORY M ANAGEMENT

33. S HELF L OGIC : S OFTWARE FOR C ATEGORY M ANAGEMENT P LANNING

34. C ATEGORY C APTAINS What is a Category Captain? an appointed lead supplier who carries out the category review and leads the process to deliver the plan for the total Category The Category Captain must: have a demonstrable knowledge of customer insight and market understanding take an objective approach to growing the overall category recognize the role of other suppliers in delivering the goal Non-captains?

35. M ANUFACTURERS GO ONLINE Would you ever buy a consumer product online? Why or why not? Probably in rare instances Most of these products are consumables that are considered convenience purchases There’s an immediacy Consider shipping costs Will this venture be successful? If the goal is to apply some pressure in the supply chain, then possibly If the goal is to move a majority of the manufacturer’s business online, then no Retailers still create significant place value

36. http://www.emarketer.com/Article.aspx?R=10088 89