Retail buying

RETAIL BUYING

Structure uniqueness of Textile

Complicated stock keeping units (SKU) estimation

Strong effect of Fashion Domination of textile supplier and retail

buyers over manufacturers Difference of product ordering procedure

But the Biggest challenge is to

“ Integrate qualitative data and theory to quantitative demand forecasting ”

This most of the time leads to Intuition based Decision .

To reduce possible Fatal-loss from an uncertain demand prediction retail buyers use :-

1)Quick response (QR) system

2)Electronic Data Interchange (EDI)

3)Point of sale (POS) system

4)Management Information System (MIS)

Implementation of these helps in

1)Effective order-reorder schedule

2)Inventory cost management

3)Faster sourcing strategy

4)Improvement of Assortment planning

RETAIL BUYING PROCESS

Planning policies Buying in Budgeting Planning model stock Contacting Vendors Planning Promotions

ROLE OF RETAIL BUYER

Merchandise planning

Assortment planning

Actual buying & rearrangement

RETAIL BUYING PROCESS

For realistic Merchandise planning retail buyer must consider:-

1)Target market demand

2)Local retail competition

3)Physical expansion needed in the store

4)Planned promotional efforts

5)Trend analysis

6)Seasonal consumer demand

7)Economic condition

RETAIL BUYING PROCESS Merchandise Planning

Merchandise planning may require fashion forecast , sales forecast .

Objective of Fashion Forecast in merchandise planning:-

1)Studying market condition consumer buying

behavior.

2)Evaluating up to date fashion trend

information.

3)Noting street fashion of target consumer.


Objective of sales forecast in merchandise planning :-

1)Trend analysis

2)Effective order in term of quantity decisions of specific style ,colors, size.

3)To develop efficient and effective inventory control plan.


Two approach used for sales forecast:-

1)Top-down

2)Bottom-up 4 Steps of top-down forecasting process :-


1• Planning sales goal

2 • Planning stock level for company & each store

3• Planning assortment plan

4• Making a sales forecast report

3 steps of Bottom-up forecasting process:-


1• Determining sales potential for individual item

2 • Planning total sales & stock level by adding

4• Making a sales forecast report

• If item proportion in assortment plan is positively correlated BOTTOM-UP approach is used .

• If item proportion in assortment plan is negatively correlated TOP-DOWN approach is used.

UNIT PLAN DOLLAR

PLAN

RETAIL BUYING PROCESS Assortment Planning

UNIT PLAN:- It most often refer to qualitative decision

DOLLAR PLAN :- It is quantitative result of assortment planning

Retail buyer looks for new product. Vendor evaluation on following criteria :-

1)Quality of goods

2)Good delivery

3)Product fashion-ability

4)Fair price

5)Styling

6)Reputation

7)Selling history

8)Steady source of supply.

RETAIL BUYING PROCESS Actual buying and rearrangement plan with

vendors

1• Psychological world of individuals involved

2• Rapid & joint buying decision making

3

• Conflicts and its resolution among decision makers.

RETAIL BUYING PROCESS Organizational Buying Behavior

Organizational Buying Behavior involves three aspects

RETAIL BUYING PROCESS Assortment - planning process

\

It is perceived gap or discrepancy between current state and desired state of company /store.

Two Major problem with which this step begins :-

1) Change in desired state for a store .

2) Change in current store assortment .

RETAIL BUYING PROCESS Assortment planning process

1.PROBLEM RECOGNITION

Internal source of Information :- Store records , merchandise plan reports , sales people opinion.

External Source of Information :-

a)Customer panel

b)Consumer magazine & trade publication

c)Vendor opinion

d)Trade associations

e)competitors

f)Fashion forecast magazine .

g) Reporting bureaus.


2.Information Search

q

Qualitative Evaluation :- Important aspect in evaluation is desired

solution to a problem, establishing criteria of evaluation.

Fiorito`s product specific criteria :- Quality Color Position on the fashion cycle Styling Distinctiveness


3.Product Evaluation(a)

Kang found in her research that retail

buyers and their target customer have

similar variance of criteria importance and product specific

perceived risk

Quantitative Evaluation :-

Its component are following :- Initial markup for period Planned net sales Planned BOM(Beginning of month) Planned ending inventory (EOM) Planned reduction Planned purchases at retail.


3.Product Evaluation(b)

Forecasting Style Selection Forecasting Color Selection Forecasting Size Selection


4.Forecasting product selection and sales.

Forecasting methods for Assortment -planning :-

1. Decomposition2. Product life cycle analysis3. Exponential Smoothing4. Regression Analysis5. Jury of Executives.6. Fashion Diffusion Curve Analysis

Decomposition :- It is a sales forecast which split total sales forecast for individual forecast of each product line and SKU level by importance rating.

Regression Analysis :- It is a forecast that estimate relationship between sales and external variables.

Exponential Smoothing :- It is a weighted moving average of past sales with considering irregular component.

Jury of executive opinion :- It is a sales forecast based on cross section of a smaller expert group .


4.Forecasting product selection and sales.


5. Rules for Product Selection

1. Compensatory Rule :-It includes calculation of an importance weight and attribute rating for each attribute & then arrive at total product satisfaction score by adding them.

2. Lexicographic Rule :- It requires to rank the attributes according to importance & then select brand that is superior on most important attribute.

3. Conjunctive Rule :- Minimum standard is set for each attribute and then fast and simple elimination is used for selection of best alternatives.

Business

Retail buying