BY RIC ANDERSON
STRATEGY, PROCESSES, PLANNING, CULTURE AND EXECUTION
By Ric Anderson
These Processes are a living document of the methodology for the management and execution
of running a strong Merchandise Category.
CUSTOMER VALUE PROPOSITION
What is the CVP for that Product Category?
Does it build the Product Category as a Brand?
Does it align with the Stores CVP?
What are the goals of each Division? Purple Cows?
Service Level by type of Revenue Channel or Store Profile.
Brand Profile for each Private Brand with comparisons to National Brands
Goals by brand as to purpose, penetration, financial and future
Goals by Division as to purpose, sales, profit, ROI
Goals of Category by Channel? What adjustments need to be made?
Pricing Strategy: High/Low, Mid/High, Everyday pricing
Clearance Strategy: When to markdown goods, how to make it a traffic driver, numerical
ending of pricing, synergistic to other categories.
By Time: Broken down to Days, Weeks, Quarters, Seasons. Year
Regular Sales to Clearance Sales by Division by Week.
By Sub Categories: Dresses, Denim, Shoes etc.
GMROI by Division by Month
GMROI by Customer Profile
GM$ broken down by Division by Week sub totals to month, quarter, season year. With
% to total: Forecast, plan, actual, LY.
By Category by Geography
By Top Doors penetration and learning’s
By Revenue Channel by Week by Division: Sales, GM%, GMROI, Marketing Expense
By Division by class for 3 years: Sales, GM$, GM%, GMROI – where have been the
dramatic changes and what action is taking place
Sales, GM$, Sq. Ft. Sale per Sq. Ft. , GM$ per Sq. Ft. ROI Year, Season, Quarter
Adjustments by Season to Sq. Ft.
By Geographic Region
By Large Metro with Marketing by Region
By Demographics: Urban, Suburban, Rural
Sales and GM$ by Sq. Ft. compared by each Apparel Category.
Grouped by traffic flow in Store. Back vs. Front
Consultative vs. Open Sell vs. 50/50
• Store Plans that rolled to total Sales, GM%, GM$, Inventory
• Vendor Plans – Forecast, Plan, Act, LY
• By Division by month: Sales, inventory(cost & retail), Turn, Reg MD’s, Promo MD’s,
• TOP DOOR: Plans by Division for top percent of Doors.
Individual Reviews and Goals
Brand building Classes
Classes on Marketing to achieve goals.
Customer profiles percent by Division.
▫ By Type of Customer: Fashion, Comfort, Career, Casual,
Colors, fabrics, body types
Aged Inventory by Division by Month
Top 100 Items
▫ Top 50 items by Division
▫ Top 20 by Customer Profile
Number of Items needed by Product Category and Customer Profile.
Top 10 Vendors by Division: Sales, GM$, GM%, GMROI, Penetration %
▫ Other Apparel Categories down to Sub-Division level, in Basket by dollars and
▫ Break Down by Month
▫ Market Basket for Shoes by Division
▫ Frequency by Apparel Category down to Sub Levels.
▫ Most Profitable Customer vs. Most Sales vs. Frequency.
▫ Market Basket results with different Product Marketing.
Good, OK, Ugly: Review of past season by Category
Semi-Annual Competition Review
Big Ideas: by Category
▫ Why, When, How Big? Which Vendors, Marketing, Financials, Bonus Item.
▫ Sales by week
▫ Breakdown by Customer Type
Template for Vendor Meetings.
▫ Checklist of information, expectations, plans,
Critical Thought Process
▫ What do we want to know? When, How,
▫ From whom?
▫ In what form?
▫ Review current Inventory
▫ On Order
▫ Old Age
▫ Performing and Non-Performing items with Action accountability.
Monthly reviews of performance of category – sales to inventory. Do in-season
adjustments need to be made.
Sales by Week % to total with Marketing by week by channel % to total.
Footwear Events geared toward fashion or Category.
▫ Template on elements needed for each event.
▫ Goals: Financial and Branding.
Competition Marketing by Week with Ad Book.
Marketing Plans by Week 6 months in advance.
▫ Events and Themes of Ads
▫ Types of Footwear in Ad
▫ Actual Samples and Colors.
▫ Partner with any apparel categories
COMMUNICATION: MEETINGS AND PROCESSES
Master Calendar of meetings, due dates and responsibilities
Weekly Merchandising meeting with Best/Worst Sellers
War Room with Advertising by Week
Monthly Results and Goals
Monthly Phone call to RVP
Monthly Phone Call to Managers – invitees change monthly. Discuss Best Practices
Monthly News Letter to Stores: Best Sellers, Advertising, Best Practices
Website on Training, Best Practices, Questions.
Semi-Annual Survey to Stores on what they want, need, don’t need, issues, competition
Semi-Annual Support Group Form: Presentations by Division to Stores, Marketing, Internet,
Senior Management, Sourcing etc. on the results, goals and needed support
Quarterly Merchandise Trips to Stores in different Regions
EMPLOYEE RECOGNITION and AWARDS
Fire Breathing Dragon
Thank You Awards
Quarterly Division Outings
Bring in best vendors by Category
o Round Robin with each support group: Marketing, Logistics, Internet,
Merchandising, Inventory Planning.
RETAIL STORE AND MERCHANDISE ANALYSIS
QUESTIONS TO BE ASKED
By Store, Growth by year
Per Square Foot
Per GM$ Sq. Ft.
Average sale transaction- Clearance and Regular
Amount of Regular Vs. Clearance
Units per transaction
By Time Period
By Channel: Regional Stores, Outlet Stores, Catalog, E-commerce
By volume, Average per store
Profit by store, City, State
Number of Mall Stores, Number of Strip Malls
Manager’s name, Time in position
Customers in surrounding Zip Codes
Store Leases: Rates by store, Dates of ending leases.
Planned new stores?
Demographics for products
Number of customers in surrounding Zip Codes
Lifestyle of Customer – purchase patterns.
Sales Total, Category, SKU
Gross Margins Total, Category, SKU
GM$ Total, Category, SKU
Average Stock Total, Category, SKU
Turn Total, Category, SKU
Expenses related to revenue
Sales per Sq. Ft.
Financials by store Sales, margins, overhead,
Age of inventory by store, by product
SKU’s by Category
Sales by Product, by SKU
Growth rate by Product, by Sku
Percent to total by Product, by SKU
Per of SKU to Category
Which products are made?
Which products do we buy?
Relationship of overhead, product costs and volume on each Product?
Pricing Policy: Markup? $.95 endings? 1st markdown? When and how much?
Lead time for each product we make.
Decisions about buying outside vendors? Who, Where, When, Why?
New products in work?
Average price per SKU
% by categories
Basic Stock items
How to reorder, When, Who
Top Ten by Channel: Stores, Catalog, E-commerce, B2B
Bonus system for Manager, Salespeople
Expenses tied to sales
Employees per store
% Full time, % Part time
Store Hours, Change at Christmas
Deliveries to stores. How often? Direct ship other product?
What do we empower our employees to do?
Types of Bags per product
Turnover of employees
MARKETING OF THE BRAND
What is the Brand today?
What is the Customer Value Proposition and should it be changed?
Different in Stores from Catalog
Strengths & Weakness
Media currently being used by the company and competition
In House Credit Card
Loyalty Rewards system
CHANNELS OF REVENUE
Stores: Number of Stores, Locations, Size of Stores
Direct to Customer
Lead-time for the Catalog
How many catalogs
Any catalogs specifically for stores?
Number of mailings per catalog.
Sales per transaction
Units per transaction
Sales per category, Sku’s
Number of hits
Customer Experience on Site
Evaluation of current management
Training of staff
Current culture of business
Who is best in class – Nationally and Regionally?