Topic 1 Flashcards
Assume a retailer requires an end-of-month inventory of R10 000. She estimates sales of R4 000 and markdowns of R1 000 for the month. Her beginning-of-the-month inventory is R8 000. She is waiting for orders that have been placed to the value of R3 000.
How much inventory is she ready to receive?
The retailer requires inventory to the amount of: R10 000 + R4 000 + R1 000 = R15 000 (this is the inventory required).
How much inventory is she open-to-buy?
She is open to receive R15 000 - R8 000 = R7 000. Of the R7 000, she has already ordered R3 000.
She is therefore open-to-buy R4 000
(R7 000 - R3 000).
The importance of historic sales patterns (from fashion retailing)
Historic sales patterns of the best and the worst sellers from a previous season are usually summarised in a report format to show the “lessons learned”. A dull repeat of old formulas is not needed. A fashion business must not repeat historic buying failures, although a successful history is no guarantee of future success in the fickle, volatile world of fashion.
Historic sales patterns: Bottom-up planning
Bottom-up planning is the analysis that begins with what was sold: how much, what kind, when and at what price. Projections are then made for the coming sales period and investment in merchandise is based on previous sales. Bottom-up planning is an everyday task of a merchandise manager.
This helps head office with its top-down planning.
Historic sales patterns: Interactive planning
The combination of top-down and bottom-up planning is called interactive planning. It is a teamwork approach with input from all the firm’s constituencies. It is time-consuming but the most accurate of merchandising plans.
The effective fashion buyer will analyse previous sales history to help plan the basic sales framework for daily, weekly, monthly and seasonal sales patterns. However, this requires quick thinking, reaction and experience to cope with all those sudden unplanned factors that tend to occur when they are least expected.
Planning non-staple stock (from fashion retailing)
Pre-set order quantities and automatic reorders are not possible with non-staple goods. Ordering new merchandise requires judgement and being in tune with customer tastes and industry developments. Conservative ordering and continuous checking of sales pat- terns are important. The selection and management of merchandise are very important.
It is important to group similar merchandise together to determine which products sell best and which generate the most sales. This is concrete evidence of which products the customers are buying. Everyday stock control is important.
Planning non-staple stock: Classifying merchandise
According to Cant (2010:78), classifying merchandise consists of product lines and items.
Within a product line, a product item is distinguishable by its brand, style, size, colour, material, price or any combination of these factors.
It is important for retailers to remember that not all customers can be satisfied. There is also a difference between not keeping a product in stock and running out of stock. You cannot keep everything in stock and running out of stock is also not advised.
Planning non-staple stock: The different life cycles are further explained in Cant (2010:79).
*The product life cycle will influence the kind of merchandise a retailer keeps. Retailers must know if the product is a fad, a fashion, a staple product or a seasonal product.
The principles and elements of design (from fashion and visual merchandising)
The visual merchandiser needs to understand and be able to use the principles and elements of design to create a visual concept that fits with a store’s image.
Colour and texture are important to add excitement to any visual presentation.
The other important principles of design, used in visual merchandising and display, are line, balance, contrast and rhythm.
Colour and texture Lighting Line Balance Contrast Rythm
Lighting
Proper lighting is vital to selling because light directs a customer’s eyes to the merchandise.
Colour
Pegler (2006:7) mentions that colour is the biggest motivation for shopping. People buy colour before they buy size, fit or price. It is the first thing a customer notices. Customers react immediately to trendy colours and to the colour themes of displays. Retailers who understand and apply the power of colour in selling benefit from increased sales.
Colour says something about the kind of store, merchandise and market the retailer hopes to appeal to. Taste and colours, like everything else in fashion, change and though some basic conclusions can be drawn about colour and how people respond to the various hues, tints and shades, there is still the “in-fashion” or “trend” that determines when a colour is “in” and when it is “out” (Pegler 2006:7).
Take note of the author’s discussion on The Colour Marketing Group (CMG) in Pegler (2006:7- 8).
Colour psychology is important in visual merchandising because colour can immediately create a mood.
Pegler (2006:8 -12) gives a brief explanation of the physical and psychological reactions to colour, colour families and colour schemes. Make sure you are comfortable with the different reactions, colour families and colour schemes.
The visual merchandiser can usually control the background colour against which mer- chandise is shown. The background colour is important because it can either add to or detract from the colour of the merchandise presented (Pegler 2006:12). Make sure you are comfortable with this statement.
Texture
According to Pegler (2006:13-14), texture is another very important aspect of colour. Take note of the author’s discussion on texture.
Texture
According to Pegler (2006:13-14), texture is another very important aspect of colour. Take note of the author’s discussion on texture.
Mannequins
Well-dressed mannequins make an impressive apparel presentation. If mannequins are dressed well, accessorised with style and located correctly, they will create a strong sales generator and fashion image. Customers are attracted to mannequins because they are fun to look at and their image teaches fashion. Mannequins in display windows and in the store should always wear the store’s latest fashion merchandise. The merchandise must be changed every two weeks at the least.
According to Pegler (2006:91), the selection of a mannequin is probably one of the most important professional decisions a visual merchandiser is called upon to make. There are many mannequins available and serious consideration must be given to construction and cost.
A mannequin is the “silent salesperson” and a store’s most valuable asset because it speaks the clearest fashion message.
