Benjamin Franklin wisely said that “failure to plan is failure to plan”. While he didn’t specifically mention the retail industry, the adage couldn’t ring truer—especially when it comes to merchandise planning for your retail store.
If the merchandise you order and display so diligently in your store and on your website doesn’t match what consumers want—you run out of popular items or order the wrong merchandise—you’re basically planning for failure.
Inventory distortions include shrinkage, stock-outs, and excess inventory. This costs retailers an estimated $1.77 trillion
reduce your total inventory costs by
0 percent just by reducing out-of-stocks and excess inventory. The key is to order the right items, at the right time, in the right quantity and at the right price.
What is Merchandise Planning?
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Retail Merchandise Planning is exactly what it sounds like – a way to select, manage, buy, display and price merchandise in an efficient way that ensures you have the right products at the right time. This will increase your potential for maximum return on investment (ROI). You’ll also reduce excess inventory and maintain—and build—a good reputation and your reputation with customers who know you’ll have what they want, when they want it.
Benefits of retail merchandise planning include:
Less reduction in excess/obsolete/depreciated inventory and higher returns due to availability of the right products
Increase inventory turnover and reduce inventory carrying costs in the warehouse by reducing unwanted inventory
Fewer out-of-stocks and dissatisfied customers
Increased return on investment august 2024 results – 51.5k turnover and 11k profit by strategically ordering products that generate the most revenue
Merchandise planning components
One of the retailer’s biggest expenses is purchasing and marketing merchandise. This is why effective inventory management is so important. Essential components of retail merchandise planning include:
First of all, the basic component of every merchandise mix is the product. You need to make sure you have enough stock to meet customer demand. This means that there are several types of products that you can include in your assortment and you need to plan accordingly.
However, one size does not fit all with bw lists range. For example, a store that specializes in children’s books would have a narrow but deep merchandising mix. The store’s products would focus on children’s books, but it would offer a wide range of these books and include everything from the classic Dr. Seuss to those featuring stickers, pop-up pages and more. The store may also have hard-to-find children’s books.