Showing posts with label Merchandising. Show all posts
Showing posts with label Merchandising. Show all posts

Category Management

Retail Merchandising


In today's highly competitive retail environment, retailers must work harder than ever to differentiate
themselves in the minds of consumers as well as determine and procure the best offerings for these consumers in an efficient and timely manner. Retailers who act now to effectively exploit existing and developing consumer data technology will be those leading the industry into the next century.

Category management is a strategic tool which allows you to harness today's resources to gain a larger part of tomorrow's market share. Implementation of category management improves your
productivity through:
  • Focusing on consumer needs
  • Aligning categories into strategic business units
  • Integrating key business functions
  • Exploiting new technology
  • Developing strategic business alliances
  • Creating proactive business processes

Category management is more than the application of technology and information tools - it is a business philosophy focused on asset management which facilitates your ability to:
  • Maximize both sales and profitability
  • Optimize shelf space, inventory movement, and customer traffic
  • Reap the benefits of the retail industry's (ECR) efficient consumer response initiative

Our recommendation for retail involves the people, processes and systems of your organization. We suggest that you focus on the following components of the category management process:
  • Development of an overall identity for your company
  • Development of an organizational model with clearly defined roles for buying and merchandising (category managers and replenishment buyers) and built-in accountability
  • Assessment of corporate financial goals
  • Analysis of activity-based costing (ABC) and direct product profit (DPP options
  • Selection or improvement and application of customer and retail data technologies, both hardware and software, as well as training
  • Definition and assessment of categories within the framework of the corporate gameplan
  • Development of strategies, tactics, goals and objectives for category segments
  • Creation-of comprehensive category performance measures and scorecards
  • Category Management Training Programs for buyers/merchandisers and store operations personnel
  • Forging or improving partnerships with other players in your logistics pipeline to reach category sales and profit goals

Effective category management is reliant upon teamwork and cross-functional communication. Our team works in conjunction with yours in developing and executing plans, as well as measuring your performance and refining your approach accordingly.

For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

The Retail GateKeeper Position

Importance of the Retail Gatekeeper Position



Now more than ever, retailers are moving toward that philosophy as they appoint gatekeepers to filter and funnel communications and workload from regional and corporate offices to the stores. If executed properly, the gatekeeping function can save time and money while improving execution at the store level. The concept is rudimentary, yet many retailers are overlooking the possibility. Others may not be using the function to its fullest potential. That's why retailers are encouraged to return to the basics. By revisiting elementary retailing elements, retailers are discovering missed opportunities.

Expected Role
Gatekeepers are responsible for filtering and funneling information to the stores in a timely, efficient manner. Specifically, the gatekeeper: 
  • Receives and reviews all information and workload that needs to be communicated, including price changes, plan-o-grams and much more
  • Determines what should be communicated, how it should be distributed, and when the organization should be informed
  • Stays focused while working with merchants and headquarter's departments to make "smart" decisions concerning seasonal layouts, price changes, etc.
  • Creates a budget for communications and activities, and ensures the organization remains within it

Ideal Candidate
Retailers should appoint a director-level person to handle the gatekeeping function. To be effective, gatekeepers should possess several characteristics and traits, including:
  • Knowledge of the organization's strategies and priorities
  • An understanding of store operations
  • Leadership and teamwork qualities to overcome adversity
  • Strong written and verbal skills

Benefits
There are numerous advantages to implementing a gatekeeper and utilizing the function effectively. For instance:
  • Communication is clearer
  • Standard of execution is heightened
  • Costs decline
  • Labor hours are used more efficiently
  • Customer satisfaction improves

Case in Point
At a large mass merchant, the gatekeeper function was instituted in conjunction with a store effectiveness program. The result was a markedly higher level of execution across the chain with a net reduction of 7 percent in store labor costs.

For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

  

Suppliers: Friend or Foe?

Get More Value from Your Vendor Relationships


Retailers are faced with an ever-growing and ever-changing list of challenges. They are suffering from falling profit margins and flat or reduced market growth. They are plagued by consolidation, increased competition and high standards set by industry leaders. We're not telling you anything you don't already know. You live through these critical issues every day. But you may not realize that closing the gap with suppliers can significantly reduce costs and boost revenues. It is imperative for retailers to develop "Partners" outside of the organization, rather than just suppliers of products or services. Retailers can achieve this by focusing efforts on developing partnerships with the right suppliers and also by understanding the value a supplier brings to the organization.


Segmenting the Supplier Base
The objective of segmentation is to identify suppliers that reflect the retailer's strategic vision. This ensures an improved focus of time and effort on high-value, primary suppliers, yielding closer relationships, increased revenues and reduced costs.

Unfortunately, not everyone will agree on which suppliers should have primary status because each area of the business has different needs. For instance, merchandising might measure suppliers on gross margin and sales volume. Stores and warehouses may measure delivery accuracy and the amount of pre-retailing done by suppliers. Neither are wrong, but a partnership can only start if your organization has similar views on the supplier.

Another tool helpful to understanding a relationship with the supplier is to know the current value to the organization.

Measuring Suppliers' Value/Contribution
A true representation of net contribution to the business is achieved by examining all aspects of the business, and assigning costs and incomes to each. However, most retailers do not have this information at hand. They must invest Significant time conducting research and holding extensive discussions with suppliers.

Information technology can help greatly in this area, but it is important to have an open and honest dialogue with suppliers to understand the costs and incomes of both parties. Discussions also reveal duplication of work and other inefficiencies.

Making a Case
A department store chain client needed to enhance supplier alliances. Specifically, the retailer was plagued by several challenges, including:
  • Too many suppliers, resulting in a lack of focus and a dilution of relationships
  • No formal process to monitor and control the number of suppliers
  • High-volume suppliers that were not cooperating with the retailer's vision

The retailer created a supplier segmentation model to begin its measurement and improvement process. Specific criteria included:
  • Gross sales
  • Uniqueness of product
  • Brand image,
  • Electronic Data Interchange
  • Logistic capability (lead time, hold stock, delivery window)
  • Pre-retailing capability (ticketing, hanging, store allocated vs. bulk shipment, bar coding.)
  • Exclusivity

After segmenting suppliers, establishing performance goals determining alternative actions and holding numerous discussions with suppliers, both the retailer and its suppliers benefited. Specifically, there was a reduction in cost of approximately 5 percent, quicker response times,
as well as increased availability, product delivery, accuracy and quality. The long-term benefits include decreased mark-downs, improved product innovation and enhanced promotion strategies.


For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

Revisiting Non-Selling Tasks

Improve Your Store Profitability


Back to basics. It's the philosophy of any successful retailer. Sure, they look at cutting edge technology and innovative practices, but smart retailers also return to the basics. Smart retailers understand the need for a solid foundation before tackling complex issues. They've witnessed substantial improvements by ensuring fundamental principles were in place. And they know it's difficult to reinvent the wheel.

Returning to the basics makes sense particularly in the case of non-selling tasks. I'm sure you're aware of what needs to be done, but can you say for certain they are getting done? Even the most astute retailers need reminders that it's time to revisit the basics. Because we've all overlooked the simple solutions at some point, sometimes at the loss of significant results.

Check List
When was the last time you examined the fundamentals of your non-selling tasks? Take a look at the tasks and processes currently utilized for the following activities:
  • Stocking
  • Price changes
  • Merchandise maintenance, including
  • cleaning and straightening
  • Re-merchandising and layout changes
  • Scheduling
  • Cash reconciliation
  • Payroll
  • Inventory management within the store, including generating orders and updating unit inventory
  • Communication

Benchmarks
As you revisit the fundamental elements of non­selling tasks, keep in mind industry performance indicators:
  • Apparel price changes (units per hour): 350+
  • Accessories and domestics price changes (units per hour): 150+
  • Re-merchandising / floor moves (units per hour): 250+
  • Office support as a percentage of total store labor hours: 4%

Benefits
You'll see a marked improvement in operations and the bottom line upon re-examining and enhancing non-selling tasks. Benefits include:
  • Reduced labor expenses
  • Additional selling time
  • Increase revenues

Case in Point
A $15 billion department store chain client improved its non-selling tasks by returning to the basics. The retailer streamlined existing activities, eliminated duplicate tasks, and implemented best practices in several non-selling areas, including receiving, replenishment, recovery, loss prevention, service desk and more. The retailer achieved approximately $20 million in recurring annual operating savings. In addition, substantial improvements were seen in sales, customer satisfaction and productivity.


For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

Merchandising: Door To Floor

Efficient Store Stock Flow


Retailers have slashed costs, pumped-up sales, streamlined activities and re-engineered processes throughout their pipeline. Now they're going back to basics. Leading retailers routinely examine the fundamental practices of their retail operations, ensuring the best practices are being utilized within the store's four walls.

Best practices for moving merchandise door to floor aren't necessarily cutting edge. In fact, most of you could probably recite them in your sleep. However, the trick for most retailers -- even the most astute -- is revisiting the basics and ensuring each and every step is enforced. Sometimes we overlook the simple solutions for more complex ones, even at the risk of terrific results.


Check List
Take a step back. Look at the basics. You could put yourself two steps ahead.
  • Is merchandise pre-processed and floor ready?
  • Is merchandise sorted by department and/ or aisle?
  • Is apparel pre-hung and pre-ticketed?
  • Are myriad items put in re-packs?
  • Is the backroom configured with the most effective and efficient layout?
  • Does the backroom have the necessary equipment?
  • Is the frequency of deliveries appropriate?
  • Have standards been established and measured?
  • Do you have price integrity?

Benchmarks
Measure yourself against the best practices of leading retailers.
  • Process floor ready merchandise door to floor: 2 - 3 hours
  • Units processed per labor hour: 260+
  • Percentage of goods preticketed: 40% - 75%
  • Percentage of goods received floor ready from vendor: 70% - 75%
  • Percentage of goods received floor ready from DC: 70% - 90%

Benefits
Just a reminder of the rewards you'll reap after revisiting the fundamental elements of moving merchandise door to floor:
  • Reduced labor expenses
  • Additional selling time
  • Increased revenues

Case in Point
A previous client, a $500 million specialty store chain, improved its door to floor activities by returning to the basics. The retailer re-engineered store processes to streamline existing activities, eliminated duplicate tasks, and implemented best practices. As a result, the retailer improved productivity by 20 percent and reduced direct annual operating costs by almost $10 million.


For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc
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