Buying and Merchandising Flashcards
1
Q
what are the 8 stages of the buying cycle
A
1- range review
2- research and planning
3- range development
4- sourcing and sampling
5- range finalisation
6- manufacturing
7- allocation & distribution
8- retail sales
2
Q
what happens in the range review
A
post mortem report, lesson learnt, budget planning, best and worst sellers, brand objectives, top down, bottom up planning
3
Q
what happens in research & planning
A
trend research, idea development, comp shopping, directional shopping, market position, consumer demand, brand strategy, review & access, supplier performance
4
Q
what happens in range development
A
trend translation, initial range plan, pre selection meeting, initial samples, initial ratios & quantities
5
Q
what happens in sourcing and sampling
A
negotiations with suppliers, lab dips, pre production sampling, quality control testing & fitting
6
Q
what happens in range finalisation
A
final range plan, selection meeting, pro formas, order confirmations, finalised ratios, quantities, cost prices, delivery
7
Q
what happens in manufacturing
A
critical path monitoring, sales plan forecasting
8
Q
what happens in allocation & distribution
A
initial allocation, delivery to DC, quality control checks, delivery to stores
9
Q
how has buying and merchandising changed
A
- internet and technology- fast fashion and increase in in-season buying due to social media influencers
- increased demand for sustainability
- buying merchandising roles are more fluid (Jackson & Shaw, 2001)
10
Q
how has technology changed buying and merchandising and what are the advantages
A
range planning and product development using body scanning and 3d software
- gives a more accurate representation of garments and earlier in the buying cycle
Advantages:
- shorter lead times
- less fabric waste
- reduced carbon emissions as samples are not posted
- 3d is more accurate than 2d- improved communication with suppliers so less errors and stronger relationship
11
Q
primary role and roles/ responsibilities of fashion buyers
A
primary role- purchase product range epitomising the brands identity, appealing to target market and making a profit
- analyse previous sales data to forecast product sales and minimise risks
- translate trends to suit brand identity
- comp shops
- visit trade shows
- negotiate deals to be within budget
- source suppliers
12
Q
skills required to be a buyer
A
multi tasking, analytical, technical understanding of garments/ supply chain, awareness of trends, communication, meet deadlines, negotiation, organised
13
Q
what is the buying cycle + reference
A
key events/ processes that fashion buyers are involved in to buy a garment range for a retailer (Goworek, 2007)
14
Q
why is range review important + reference
A
it informs financial planning for the upcoming range (Jackson & Shaw, 2006)
15
Q
why is research and planning important
A
aids development of planned ranges- considers brand identity, corporate strategy and target consumers expectations
16
Q
what is discussed during the pre selection meeting
A
initial samples, colour-ways, sizes, quantities, financials
17
Q
what is the sample in the sourcing and sampling stage
A
accurate sample (colour, size, fabric)
18
Q
what happens in the final selection meeting
A
team present complete range with samples and financial info, products are approved and signed off
19
Q
what do i need to know abut allocation & distribution
A
different stock levels allocated to different stores based on size, location and customers
20
Q
what is the critical path + reference
A
schedule of key dates for product development & manufacturing- dates must be met to launch product as intended (Goworek, 20070
21
Q
what is buying and merchandising + reference
how has this been added to in recent years
A
getting the right product at the right price at the right time to the right place (Shaw, 2006)
right quantity, right customer (Stone, 2012)
in the right way (Boardman et al, 2020)
22
Q
how has buying cycle changed
A
used to take 1 year (Goworek, 2007), fast fashion brands have changed this- they produce smaller ranges more frequently
23
Q
what is corporate strategy and what is it based on
A
overall company plan (porter, 1987), set at a high level
growth, internationalisation, market position, competitive advantage
24
Q
what is the buying strategy
A
transforming the corporate strategy into products that sell
25
buying strategy examples
effort into own branded goods
emphasis on increasing quality
reducing suppliers
zara- develop a range offering value to customers
26
trend forecasting tools
WGSN, fashion snoops, edited, trade shows, fashion weeks
27
what is trend forecasting + reference
using knowledge of fashion design, marketing, current affairs, trends and history to predict future fashion (Granger, 2015)
28
how have fashion weeks changed and how has this affected buying
- more than just the traditional prestigious 4
- influencers and PR companies are invited to promote events
- streamed online
- shortened customers attention span (Stone, 2012)
29
types of trade shows and examples
fabric and garment
pure london, premiere vision
30
how often and when do trade shows take place
twice a year
february and september
31
advantages and disadavnatges of trade shows
adv- build stronger relationship in person
disadv
- time consuming- travelling- prevents buyers from other duties (this is the reason super fast fashion brands don't visit them)
- expensive- eats into profits
32
what are directional shops
shops done by buyers to gain inspiration for upcoming ranges - done through travelling abroad to get an authentic look at culture, streets, markets and art
33
disadvantages of directional shops
expensive
time-consuming
34
what is top- down
brands telling consumers what is on trend
35
what is bottom-up
street style influencing trends
36
market segmentation definition + reference
seperation of the total consumer market into smaller groups (Stone, 2012)
37
how are markets segmented
geographics, demographics, psychographics, behaviour
38
gen Z characteristics
always connected to technology, sensitive to price, fashion conscious, influenced by social media
39
who fashion leaders and what are their characteristics
innovator and early adopters
risk takers, high education, high income, socially active, influential (Varley, 2019)
always seeking uniqueness (stone, 2012)
40
who are fashion followers and what are their characteristics
majority of high street shoppers (stone, 2012)
insecure, lack of interest
41
what needs to be taken into account in market research
macro environment, micro environment, the firm
42
what is a comp shop and the purpose
viewing competitors range- price, material, colour, fashionability, promotion
allows buyer to see gaps in their product range
43
what is the buying and merchandising partnership
work together range planning to maximise sales, merchandising plan- forecast sales and stock
44
what does a merchandiser do with last season, current season and future season
last- clearing, marking down products
current- delivering, monitoring, reacting to sales by buying more/less
future- planning samples, writing orders, planning delivering phasing
45
what is the wssi
weekly sales stock intake
46
what is OTB and who controls it
Open to buy
merchandisers
47
what are sales forecasts based on
previous sales history and predictions of future market demand
48
what is the merchandise plan
The intended stock and sales amount planned for a season
49
ultimate goals of planning
85% of line to be sold at full price
50
what is a product range + reference
cohesive collection of garments/ accessories that following a particular trend or colour palette (Boardman et al, 2020)
51
4 main considerations with range planning
market positioning, target consumer, customer expectations, retail calendar
52
what happens in the pre selection meeting, what do it ensure and what is the purpose
buying team meet with seniors to present the range development
ensures:
- make sure no designs overlap
- range follows brand identity
- trends are covered
purpose:
- assess how products work together
- check pricing
- check if there is sufficient variety
53
what is trend translation
process of developing ideas into product variations to reflect brand identity (Boardman et al, 2020)
54
two types of trend translation
direct and dilute
55
what are the 2 range planning approaches
classics/ basics
fashion-focused
56
what is range depth and range width
depth- range of colours/ sizes
width- choice of products to be offered to customers
57
what is a narrow and deep range and what are the characteristics
small amount of styles bought in high volume
- not much development needed
- lack of exclusivity
58
what is a broad and shallow range and what are the characteristics
wide selection of garment styles but limited number of garments per style
- requires extensive product development
- higher prices for consumers
- range updates according to trends
59
what are the 3 stages of sampling
fit sample- size 12
pre production sample- all sizes are approved
production sample- garments are tested against sealed samples
60
what is the fit sample
first attempt at making a sample
purely to assess fit
several samples might be required
61
importance of garment fit
- wrong fit leads to returns- expensive for retailer
62
what are pre production samples
samples worked on by pattern and fabric technologists to perfect details
provides clear instruction of how the garment should look (Grose, 2012)
63
why is fabric/ garment testing required
- check quality meets requirements
- to supply care label
- must pass performance requirements
64
what is a lab dip
swatch of dyed fabric compared to original colour that the buyer requested
65
what is the purpose of lab dips
enable buyers to double check consistency of colours
66
what is a final sealed sample
contract between buyer and manufacturer
67
importance of range coordination
garments must be able to be worn together
68
how is risk reduced in range planning
- reduce levels of risky merchandise
- tailor products to meet target consumers- width and depth must be appropriate for target market
- get size balance right
69
what is single sourcing and what are the advantages and disadvantages
retailers use one supplier
adv- simplifies process, good buyer supplier relationship, retailer is a priority for the supplier
disadv- risky due to high dependency
70
what is strategic sourcing
selecting a number of different suppliers to manufacture products based on best value (cost, quality, lead time)
71
what is the criteria for selecting a supplier & appraising current ones
reliability and previous performance, suitability of factory size, equipment & machinery, supplier reputation & financial stability, speed of production & delivery, cost, production quality, communication, ethical issues
72
what is global sourcing
using a supplier outside of the market where the final product is sold
73
global sourcing advantages
- cost- cheaper due to low wages and not requiring capita investment
- unavailability of merchandise
- quality- e.g. linen from Ireland, silk from China, leather from Italy
74
global sourcing disadvantages
- long lead times- difficult to forecast trends and sales
- delivery problems- delays due to weather etc, lack of control in transit
- money tied up- factories require pre payment
- hidden costs- currency fluctuations, inventory costs, lost inventory
- cultural differences- time difference, language barrier
- ethical issues- child labour, long working hours, low wages
- bad for the environment- high carbon footprint with so much travel
75
advantages and disadvantages of sourcing from china
adv-
good for luxury and fast fashion, technologically advanced, high levels of competence
disadv-
higher wages than previously
76
advantages and disadvantages of sourcing from Bangladesh
adv-
specialise in basic items
improved quality
disadv-
negative PR (Rana Plaza)
cost of production gone up
long lead times
political unrest
77
what is near shoring
moving production nearer to home (either Europe or North Africa)
78
which countries specialise in what?
UK, italy, mayanmar
uk- knitwear
italy- leather
mayanmar- fashion items
china- fast fashion
india- silk
79
negotiation definition + reference
process of parties resolving disputes, agreeing on actions, and bargaining to achieve outcomes serving their mutual interests (Clodfelter, 2012)
80
goal of negotiation
both parties to be happy with the outcome (Clodfelter, 2012)
81
what can be negotiated
cost price, discounts, shipping, lead time, return privileges, sizes, colours, quantities
82
what are the 4 stages of negotiation
1- research and planning
2- offer
3- discussion and bargaining
4- outcome
83
what happens in the research and planning negotiation stage
market research, supplier research, product research, manufacturing research, identifying maximums and minimums they will agree to
84
what happens in the offer stage of negotiation
make initial offers- first offer is never accepted, encourage other side to say as much as possible
85
reference for buyer supplier relationship
getting the right suppliers and having a trusting relationship is the key to success of fashion businesses (Grose, 2012)
86
what happens in the final selection meeting
discussions of: total budget allocated, proposed best sellers, supplier information, delivery dates, country of origin, cost price and RRP
financial spreadsheet is studied to compare products
87
what is a pro-forma
initial order in writing that buyer and supplier check for accuracy and confirm
88
what is the purchase order (PO) and what is included in it
written contract containing all negotiated details
order quantity, shipment date, cancellation date, cost price, terms and conditions, sizes, colours, materials
89
what is the range plan spreadsheet
document for buyers including financial elements of range (cost price, RRP, gross margin, net profit)
90
why is the calculating margins essential
to understand whether a range will be commercially viable, identify products not making enough profit
91
how is selling price determined
past sales history, assessment of the target market, assess consumers perceived value of the product, comp shops,
92
what is the buying profit
BUYING PROFIT EQUATION
planned level of buying profitability
buying profit = RRP - cost price
93
what is the gross margin
GROSS MARGIN EQUATION
buying profit converted into a percentage
its the difference between RRP and cost value
gross margin= (RRP- cost price) / RRP x 100
94
what is the gross profit
GROSS PROFIT EQUATION
overall profit made on an item
gross profit = units sold x buying profit
95
what is net profit
profit after all operating expenses are deducted from the buying profit
96
what are the 4 main shipping terms
FOB- free on board
CIF- carriage, insurance, freight
Free house/ DDP (delivery duty paid)
ex-factory
97
what is FOB (free on board) shipping
supplier pays transport u to the ship/plane in their country and retailer arranges transportation to uk after that
98
what is CIF (carriage, insurance, freight) shipping
price of products includes transport and insurance from supplier to home port to distribution centre
99
what is Free house/ DDP shipping
product price includes all transportation costs from supplier to retailers DC
100
what is ex-factory shipping
product price does not include insurance or transport
101
why do most fashion retailers prefer FOB shipping
retailers can control cost and lead-times associated with shipping
102
how do buyers calculate shipping costs
adding insurance, cost to ship goods, freight & duty & clearance together
103
why are freight rates volatile
void in supply chain caused by drop in demand for goods causing slow production rates in China, India, Bangladesh
104
how to minimise risk of fluctuating freight rates
critical path- focuses on management of supplier timelines to ensure products delivered on time and money is not wasted through late deliveries
improved buyer supplier relationships- no gaps in boxes/ everything tightly packed together
fix shipping costs in advance- fix rates 12 months ahead
105
what is the delivery schedule
regularly updated document showing what is delivered on a monthly, weekly, daily basis
106
solutions to late deliveries
bring forward deliveries on best sellers
push back deliveries on slow sellers
cancel outstanding balance on slow sellers/ change styles
107
what does initial product allocation depend on
- retailer business model and brand identity
- product type, fashionability
- in store visual merchandising/ promotions
- sales forecast
- supplier flexibility
- planned stock turns
108
what are the two ways of delivering stock
hung
boxed
109
functions of the distribution centre
- breaking bulk and storing products
- amalgamating and preparing stock
- base to fulfil website orders
110
what stock issues does the DC highlight
- stock fragmentation
- faults and returns
- shrinkage (lose of stock)- errors, theft, damaged
111
what are the 2 ways to replenish
-replenishment to pattern
-sales reactive replenishment
112
what is replenishment to pattern and what are the advantages and disadvantages
system calculated to recommend stock so the initial allocation figure is established
adv
- controlled
- reactive- not prone to overstocking
- basic form of replenishment
disadv
- no consideration to forward forecasting
- too robotic
- no consideration of sales trends
113
what is sales reactive replenishment and what are the advantages and disadvantages
replaced initial stock and builds on forward demand
adv
- sales reactive
supports range co ordination
more complex
disadv
- prone to overstocking/ understocking
- reliant on technology
114
reasons for operating an OTB
- it allows flexibility to respond immediately to trends
- opportunity to delay committing total spend on new/ untested range until sales indicate market reaction
115
how OTB minimises risk and maximises profit
minimises risk
- capitalise on bestsellers and reorder
- react to in season trends
- keeps stock fresh so customers return
- stays competitive
maximises profit
- increase in season buying and more on trend products
- useful for fast fashion retailers
reactive to customer demand
116
what are the 2 types of markdowns
permanent markdowns- price reduced by a lot, planned as part of retail calendar
POS point of sales markdowns- temporary during a set time period, unplanned to help slow sellers/ improve sales
117
how to markdowns minimise risk and maximise profit
minimise risk
- get rid of worst sellers
- increases sell thru rate
- reduces weeks cover to more manageable rate
- makes way for new stock
maximises profit
- reactive to consumer demand
- encourages purchasing now
- encourages best sellers sales
118
how has etailing changed retail
- available 24 hours a day
- large variety of products can be accessed
119
issues with stock returns
- Buy online, return in store- no single point of returns back to business
- imbalances stock levels
- returned stock required more staff in logistics supply chain
- returned stock loses value
120
what is sell through
SELL THROUGH EQUATION
Amount of inventory sold during a time period
sell through = units sold/ units recieved
(x100 to give percentage)
121
what do sell through percentages mean
70%- needs improvement
80%- good
90%- great
100%- ideal but does it mean not enough was purchased
122
how does sell through minimise risks and maximise profits
minimise risks
- used as a KPI
- can be reactive to information
- shows how well business is performing
maximises profits
- identifies successful areas and can continue this
123
how does big data impact e-retailing
- see customer behaviour and spending
- track consumer purchases and browsing
- how they navigate sites
- how much promotions influenced them
124
what can big data help with
trend forecasting, reducing waste, consumer experience ad engagement, quality control and counterfeits, supply chain
125
what is GDPR and why it is a concern for big companies
general data protection regulation- hinders how companies use available data and they can lose access to some consumer data
126
how does data minimise risks and maximise profit
minimises risks
- be reactive to trends
- capitalise on best sellers
- keeps stock fresh- attracting new customers
- ensure they are being competitive
maximises profit
- increase in season buying- add more on trend products
- reactive to customer demand
127
differences between branded and own label buying
branded
- select ranges from brands/ manufacturers, trade shows etc
- no control over product design
- shorter lead times- purchase in season
- lower volume orders
- higher involvement in visual merchandising
own label
- more complex and demanding
- one category only
- comp shops
- long lead times
- high order volumes
128
sustainability definition + reference
the development that meets the needs of current generations without compromising the ability of future generations to meet their own needs (WCED, 1987)
129
sustainable fashion definition + reference
item made in an environmental and socially responsible way throughout its whole supply chain- includes raw materials, manufacturing, distribution, retailing (Shen, 2014)
130
issues associated with environmental sustainability
- carbon footprint (transporting orders and samples)
- greenhouse gas emissions from factories
- chemicals and pesticides from growing raw materials
- non-biogradeable textiles- end up in landfill
- excessive water usage (dyeing fabrics)
- microfibre plastics released when laundering garments
- fabric waste from offcuts
- clothing ending up in landfill
131
issues with synthetic fibres
synthetic materials-
polyester
- derived from finite oil supplies
- takes 200 years to decompose
- shed plastic fibres into water supply- threaten wildlife and food supply
132
sustainability issues with cotton
- requires a lot of water, pesticides & fertilisers to produce
- high water usage to dye- brands switching to naturally dyes cotton
133
how can retailers be more sustainable
- environmentally friendly dyes - come from botanicals (turmeric, rose, nettle, eucalyptus) (clark, 2020)
e.g. MUD jeans (good on you, 2022)
- using undyed fibres instead of dying them
- designing long lasting products to minimise landfill waste- should be higher quality to withstands washing
- using fabrics that dont pill
- develop timeless items rather than trend driven (Goworek, 2017)
134
how can eco-friendly fabrics produced
- no pesticides/ chemicals
- less water and energy consumption
- less waste during production
135
how is lyocell environmentally friendly
- fully biodegradable
- closed loop process- recycled water through solvent spinning
e.g. cos uses it
136
why is bamboo sustainable and what are the characteristics of bamboo fabric
natural textiles made from the pulp of bamboo
very sustainable plant as it grows quickly, doesn't require chemicals, biodegrades quickly
soft, hypoallergenic, moisture absorbent, quick drying, UV resistant, antibacterial
137
issues with bamboo fabric
when grown commercially it becomes lucrative and farmers grow it as a mono-crop which reduced biodiversity leading to an increase in insect pests and the need for pesticides, farmers clearing forestland to grow bamboo
138
challenges of working with new materials
must ensure fabric is comfortable, research takes time, find new suppliers and build relationships, materials must be readily available
139
examples of poor social sustainability
low wages- less than 4% of garment cost goes to workers (Oxfam)
poor working conditions- locked doors, no fire exits
child labour- 60 hr working weeks- unable to attend school
140
how can buyers be more ethical
- sign up to fair trade agreements
- thoroughly vet factories and suppliers
- factory visits- takes time so effects the critical path
141
why is sustainability important in fashion
- 40% of consumers want brands to prioritise helping low-paid factory workers in Asia (Drapers, 2020)
- 75% consumers consider sustainability when choosing a retailer (Mintel, 2020)
- 68% online fashion shoppers want more transparency about where items are made
-
142
why are buyer and supplier roles changing
increase of online shopping and super fast fashion- need to work much closer to the season
