Ric Anderson Merchandising Processes

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Ric Anderson Merchandising Processes

  1. 1. MERCHANDISE MANAGEMENT STRATEGY, PROCESSES, PLANNING, CULTURE AND EXECUTION BY RIC ANDERSON MERCHANDISE MANAGEMENT: MERCHANDISE 1 MANAGEMENT
  2. 2. 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. MERCHANDISING  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. SALES, GM$ 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$, GM%, GMROI – where have been the dramatic changes and what action is taking place STORES  Sales, GM$, 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 PLANS MERCHANDISE 2 MANAGEMENT
  3. 3. • Store Plans that rolled to total Sales, GM%, GM$, Inventory • Vendor Plans – Forecast, Plan, Act, LY • By Division by month: Sales, inventory(cost & retail), Turn, Reg MD’s, Promo MD’s, • TOP DOOR: Plans by Division for top percent of Doors. CULTURE  Individual Reviews and Goals  Brand building Classes  Classes on Marketing to achieve goals. ANALYSIS  Customer profiles percent by Division. ▫ By Type of Customer: Fashion, Comfort, Career, Casual,  Colors, fabrics, body types  Aged Inventory by Division by Month  Top 100 Items ▫ Top 50 items by Division ▫ Top 20 by Customer Profile  Number of Items needed by Product Category and Customer Profile.  Top 10 Vendors by Division: Sales, GM$, GM%, GMROI, Penetration %  Market-basket ▫ Other Apparel Categories down to Sub-Division level, in Basket by dollars and percent ▫ 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. MERCHANDISE PROCESSES  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.  Line Reviews ▫ Sales by week ▫ GM$ ▫ Marketing ▫ Breakdown by Customer Type ▫ Competition  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? INVENTORY REVIEWS  OTB: ▫ Review current Inventory MERCHANDISE 3 MANAGEMENT
  4. 4. ▫ 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. MARKETING  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 practices  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  Best Practice  Thank You Awards  Quarterly Division Outings VENDOR SEMINARS  Bring in best vendors by Category o Round Robin with each support group: Marketing, Logistics, Internet, Merchandising, Inventory Planning. MERCHANDISE 4 MANAGEMENT
  5. 5. RETAIL STORE AND MERCHANDISE ANALYSIS QUESTIONS TO BE ASKED  SALES  Total  By Store, Growth by year  By Category  Per Square Foot  Per GM$ Sq. Ft.  Average sale transaction- Clearance and Regular  Amount of Regular Vs. Clearance  Units per transaction  By Time Period  Month  By quarter  By season  By Channel: Regional Stores, Outlet Stores, Catalog, E-commerce STORES  By volume, Average per store  Profit by store, City, State  Number of Mall Stores, Number of Strip Malls  Year Opened  Square Foot  Manager’s name, Time in position  Customers in surrounding Zip Codes  Store Leases: Rates by store, Dates of ending leases.  Planned new stores? CUSTOMERS  Demographics for products  Affinity sales  Number of customers in surrounding Zip Codes  Lifestyle of Customer – purchase patterns. FINANCIALS  Sales Total, Category, SKU  Gross Margins Total, Category, SKU  GM$ Total, Category, SKU  Average Stock Total, Category, SKU  Turn Total, Category, SKU  Fixed Expenses  Expenses related to revenue  Sales per Sq. Ft.  Financials by store Sales, margins, overhead,  Age of inventory by store, by product PRODUCTS MERCHANDISE 5 MANAGEMENT
  6. 6.  Categories  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?  Multiple pricing?  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 OPERATIONS  Manager  Bonus system for Manager, Salespeople  Commission  Store Hours  Fixed Expenses  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?  Guarantees  Types of Bags per product  Turnover of employees  Moral 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  Advertising Budget  Media currently being used by the company and competition  In House Credit Card  Loyalty Rewards system MERCHANDISE 6 MANAGEMENT
  7. 7. CHANNELS OF REVENUE  Stores: Number of Stores, Locations, Size of Stores  Internet  Direct to Customer  B2B  Catalog  Lead-time for the Catalog  How many catalogs  Any catalogs specifically for stores?  Number of mailings per catalog. E-COMMERCE  Sales per transaction  Units per transaction  Sales per category, Sku’s  Number of hits  Customer Experience on Site  E-mails Strategy PERSONNEL  Evaluation of current management  Training of staff  Current culture of business COMPETITION  Who is best in class – Nationally and Regionally?  Strengths  Weakness MERCHANDISE 7 MANAGEMENT

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