The document provides a comprehensive framework for merchandise management. It outlines key areas of focus including customer value proposition, merchandising, sales and gross margin analytics, store performance, planning, culture, analysis, merchandise processes, inventory reviews, marketing, communication, employee recognition, vendor seminars, retail store analysis, and questions to ask. The level of detail in each section demonstrates an emphasis on data-driven decision making and continuous improvement of merchandise strategy, processes, and execution.

1. MERCHANDISE
MANAGEMENT
STRATEGY,
PROCESSES,
PLANNING,
CULTURE
AND
EXECUTION
BY RIC ANDERSON
MERCHANDISE MANAGEMENT:
MERCHANDISE 1
MANAGEMENT

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. • 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. ▫ 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. 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.  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. 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