retail ppt (2)
TRANSCRIPT
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Presentation
ON
Merchandising Management:
Purchasing System
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Goals For Presentation
Merchandise Management Meaning
Purchasing System Meaning
Merchandise Budget Plan :
Meaning
Steps Of Budget Plan
Methods
Monthly Sales Percent Distribution To Season
Monthly Sales
Monthly Reductions Percent Distribution To Season
Monthly Reductions
Summary
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MERCHANDISE MANAGEMENT
It is the process of
developing,
securing, pricing,
supporting and
communicating the retailers merchandise offering
It means offering the right product at the right time
at the right price with the right appeal!!
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PURCHASING SYSTEM
A method used by businesses to buy products and/orservices.
A purchasing system manages the entire acquisition
process, from requisition, to purchase order, to productreceipt, to payment.
Purchasing systems are a key component of effectiveinventory management in that they monitor existingstock and help companies determine what to buy, how
much to buy and when to buy it. A popular purchasing system is based on economic
order quantity models
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MERCHANDISE BUDGET PLAN
Plan for the financial aspects of a merchandise
category
Specifies how much money can be spent each
month to achieve the sales, margin, inventory
turnover, and GMROI objectives.
Not a complete buying plan--doesnt indicate
what specific SKUs to buy or in what quantities
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STEPS IN DEVELOPING A BUDGET PLAN
Set margin andinventory turn goals
Seasonal sales forecastfor category
Breakdown sales forecastby month
Plan reductions markdowns, inventory loss
Determine stock needed tosupport forecasted sales
Determine open to buyfor each month
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SIX MONTH MERCHANDISE PLANFOR MENS CASUAL SLACKS
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METHODS OF BUDGET PLAN
Monthly Sales Percent Distribution to Season(Line1)
Sales % Distribution to Season
6 mo. data April May June July Aug Sept100.00% 21.00% 12.00% 12.00% 19.00% 21.00% 15.00%
The percentage distribution of sales by month is
based on Historical data
Special promotion plans
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MONTHLY SALES PERCENT DISTRIBUTION TOSEASON
Retail sales are very seasonal. The Christmas
season often accounts for more than 40% of a
retailers annual sales.
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MONTHLY SALES (LINE 2)
Sales % Distribution
1. Month 6 mo. data April May June July AugSept 100% 21% 12% 12% 19% 15%
2. Mo. Sales $130,000 $27,300 $15,600 $15,600 $24,700 $19,500
Monthly sales =
The forecasted total season for the six-month period x monthly
sales %
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MONTHLY REDUCTIONS PERCENTDISTRIBUTION (LINE 3)
3. Reduction % Distribution to Season
6 mo. data April May June July Aug Sept100.00% 40.00% 14.00% 16.00% 12.00% 10.00% 8.00%
To have enough merchandise every month tosupport the monthly sales forecast, buyers need toconsider factors that reduce the inventory level inaddition to sales made to customers.
Markdowns Shrinkage Discounts to Employees
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SHRINKAGE
Inventory loss caused by shoplifting, employeetheft, merchandise being misplaced ordamaged and poor bookkeeping.
Retailers measure shrinkage by taking thedifference between
1. The inventory recorded value based onmerchandise bought and received
2. The physical inventory actually in stores anddistribution centers
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MONTHLY REDUCTIONS (LINE 4)
Reduction % Distribution
3. Month % 6 mo. data April May June July Aug Sept100.00% 40.00% 14.00% 16.00% 12.00% 10.00% 8.00%
4. Monthly
Reductions $16,500 $6,600 $2,310 $2,640 $1,980 $1,650 $1,320
Monthly Reductions =
Total reductions x Monthly reduction %
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SUMMARY
Merchandise Management is extremely
important aspect of Retail Operations Manyconsider it the MOST important)
Good merchandise management does notguarantee success but bad merchandisemanagement almost certainly will result infailure.
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Presented byChitraMani
KhyatiNikita