Merchandisers - the role of the merchandiser in the retail buying team
The merchandiser/planner applies their focus on maximizing profitability from the business end. This is done largely through the analysis of historical sales and the influence of the trend direction to determine the range categories and product breakdown within the overall sales budget. The role needs to determine what stock levels are required to meet the preset targets such as seasonal stock turnover or forward stock covers based on the sales trends over time. Knowing these requirements the merchandiser will determine what the intake or purchase quantities required at any point in time in the season for the total department and each product category.
The level of the budgets will determine the quantity of options in terms of styling, colour palette, size spans, pricing structure and levels of quality per category that will best service the customer for the time that the goods are expected be on offer prior to a new variety of product being introduced in line with the strategic predetermined seasonal themes.
The merchandiser’s job has to be to provide guidance to the buyer to buy within the budget parameters. In short it can be described as providing the buyer with a shopping list or range plan that allows them to go out and fill in the blanks on the plan while procuring product. This activity requires the careful management of the “open to buy” which can often be a source of tension between the buyer who always tends to want more and the merchandiser who holds the purse strings. A good deal of emotional maturity and teamwork on both sides is therefore critical for a successful partnership.
Sadly the merchandising role is often branded as a dull, boring number crunching task in accordance with mathematical calculations while it is in fact can be a creative manipulation of numbers that is highly rewarding when positive trade results are achieved or alternatively equally as depressing when these do not materialise. The role can be likened to that of a husband who places his entire salary on a dead cert horse which was by no means appreciated by his wife. However when the horse won he was similarly unpopular for not putting more money on the horse!
As with the buying role, the merchandiser deals with different activities simultaneously as part of the team across a number of seasons and therefore requires high levels of multi-tasking and re-prioritising in the forward planning, critical milestone management, analysis and timeous action implementation. As the actual trade takes place the results need to be carefully analysed and immediate action plans initiated in order to maximise the opportunities and minimise the levels of markdowns that erode the profits. For these reasons they need to be logical, reliable, are consistent and take decisions based on fact.
The regular timeous generation of reports on sales analysis, stock levels and forward planning needs to be distributed to all team members and to senior management. Often numeric information and commercial analysis is demanded on an immediate ad-hoc basis which adds pressure to the job function and can be very disruptive to routines and in such situations the merchandiser is expected to adapt quickly and effectively. The merchandiser plays an integral role during the presentation at product reviews from the numbers to perspective which influences the agreed product mix and justification of the levels of sales budgets.
The merchandiser needs to have a detailed understanding of the stores and the customer profile of the respective stores that would best meet the requirements of the ranges in terms of styling, colour and size that are put on offer within the space constraints. The saying “to plan each store as if is your own” could never be truer. With sophisticated IT development and the availability of various software packages, some of which may be developed exclusively for the retailer, will provide quick sales analysis, production planning and afford the ability to make sound decisions based on accurate data. This information is especially necessary to give guidance to the allocator or distributor who will be sending the appropriate quantities to satisfy the store’s needs as well as to give guidance as to the level of repeat buys for products that are trading above expectations.
Some organisational structures do differentiate the function between the merchandiser who focuses on the forecasting and production planning and that of the allocator or location planner who will be responsible to distribute the product to the stores in the most suitable combinations of styles, colour and sizes that meet the store profiles. This function can be housed as an extension within the buying division or may be part of a separate centralised group where an allocator may be responsible for a diverse number of departments. The benefits of such a centralised structure is that there could be a cost saving benefit especially where smaller departments do not warrant a dedicated staff member but added to this is a pool of knowledge which develops a highly skilled team who are able to cross pollinate information, coordinate inter departmental promotions effectively and develop consistent techniques and skills. The identification of common emerging trends will contribute to the optimisation of sales and assist in the control of stock quantities at a very detailed level and thereby maximise profits. Close connections to the departmental merchandisers is maintained to ensure that their actions are aligned to the departmental strategy and plans.
The need for the diversification of the function also makes more sense from the point of view that where the distribution function is retained within the department it inevitably adds to the increasing workload of the planner which has more and more been tremendously impacted on by the development, implementation and mastering of complex and sophisticated information systems that analyse sales and stock with added forward planning functionalities.
Many such systems are able to integrate with other supporting IT systems such as supplier performance, technological measurement, critical path management, ordering, logistical and store systems. The added management of a detailed complex allocation system that is needed to move the stock to stores is more difficult with the result that the incumbent is in danger of being drawn into concentrating on the coping with the trifling detail. The possibility of losing sight of the bigger objectives as set out in the strategy and operational plans and the degrading of the inherent merchant intuition becomes very real.
The merchandiser needs to effectively manage and develop the merchandising team which can, not unlike the buying role, consist of an assistant merchandiser and/or trainee who aspire to be a merchandiser.
The cohesion of activities has to be synchronized based on actual sales performance through the formalised interaction with other stakeholders such as the buyers and technologists. This contact is usually in the form of regular, typically weekly departmental meetings where corrective decisions and plans of action are agreed. Regular association with the points of sale in stores through written communications and reports as well as regular on site visits are critical to keep aligned with the customer’s preferences and emerging trends and confirm that the stores are sharing the same vision of the overall strategy.
The need to guide suppliers assertively in terms of prioritisation and the achievement of deadlines is critical to meet the suitable stock requirements at any point in time, particularly in relation to peak seasonal periods or key events. For example, once winter breaks, which it does every year except the exact date is not easy to predict, the objective is to have the right stocks in place such as knitwear, thermal underwear, scarves and the like in sufficient quantities to meet the rush. It is a known fact that women tend to plan winter wardrobes ahead of time for themselves and their children while males tend to rush in to purchase their winter wares when they feel cold. The challenge is therefore to have the appropriate quantities in the stores at the vital time while the maintenance of the balance of stocks must be adequate to cater for the demand without overstocking the stores ahead of planned stock targets. Events such as Easter, Christmas, Valentine’s Day and Mother’s day are easier to predict and the right levels of stock can be made more accurately available at the right time.
Where suppliers do not meet the required delivery dates the merchandiser needs to manage the consequences that have to be applied for the under performance. This can result in some very sensitive and emotional discussions and the negotiation of penalties such as discounts, sale or return agreements or even total cancellation will no doubt impact negatively on both parties.