How do You Define Merchandising Management?
Merchandising has evolved to become so much more than the buying and selling of products. Today no product should be purchased without a good idea to whom it will be sold. . . and when. . .
Today, forecasting customer desires and building assortments of products that address underserved market offerings are critical to the success of every retail jewelry store. Underserved in the since that the customer demand for the product is greater than the sum total inventory across any given marketplace. Stocking undifferentiated products is killing the profit margin of so many retailer jewelers today. Key point . . . Too often jewelry fashion features are not marketed or sold to warrant distinguishable comparison and specific preference from shoppers. So merchandising managers must have the know-how to find the merchandise, determine the price, and present the merchandise in the store environment most desired by jewelry buying customers attracted to their store . . . while selecting an assortment that can be effectively presented, demonstrated and sold by the company’s current sales staff. Can we all agree that the days of buying what the merchandising manager may personally prefer in jewelry are basically over? Taking a customer oriented approach means buying what the customers are most likely to want to purchase.
Today’s retail jewelry shopping experience must be more than just browsing showcases full of sparkling products pumped up by bright lights and salespeople looking for the quickest path to a sale. In fact, a jewelry store’s retail shopping experience needs to be a carefully calculated and evolving scenario drawing from precedents established by successful fashion, accessories and jewelry stores. Yes, we need to start with fashion.
Jewelry stores are in the fashion business . . . like it or not. What jewelers need to keep in mind when buying product is that the concept of fashion is based on prevailing styles and design expressions that are currently popular with the store’s customer base. Key point . . . fashion is not defined by the reality of one individual (the buyer who only buys what they like), but rather the collective attitudes and fashion opinions of the store’s customer base and shoppers attracted to the store. So a jeweler’s approach to merchandising must begin with jewelry that is perceived by targeted shoppers and loyal customers as being aesthetically appealing- today. The tough part comes in knowing how to prepare for the inevitable and omnipresence of buyer preference changes in fashion, style and design and how changing buyer preference will affect buyer demand for current inventory assortment based on current pricing. Jewelry is a luxury purchase or at least a non-basic purchase, which is so opposite of basic goods. Knowing the fashion features of one’s jewelry inventory and how to communicate this to prospective customers as stimuli to motive buyer behavior is an absolute requirement for any jewelry company wanting to gain control of their inventory and create sustainable competitive advantage and improve their financial performance.
So what is merchandising management? It is an integrated approach to inventory assortment offerings, marketing communications and selling. Don’t limit your approach to inventory selection and pricing issues only. It takes all three; effective merchandising, marketing and sales to create a highly desired customer experience. An integrative approach will help create the right management vision to address aged inventory, stock balancing, pricing strategies, vendor performance, assortment planning, product selection for purchase and repurchase, managing gross margin return on investment and increasing product turnover. Adopt an approach to solve your merchandising challenges by taking an integrated approach to managing resources and creating emotional connectivity with your company, brand and jewelry products. Each month this article will take another step closer to showing readers just how to do this.
What to do now? Begin by creating your own definition of merchandising management. Go back through this article to make sure each important component that makes merchandising managers effective in today’s highly competitive marketplaces are included in your own definition.
Now post your own comments regarding how you define Merchandising Management or offer a question if you have one.
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TiaoZao commented:
It was my pleasure to visit your Website. I am also very Website
you enjoy the article.And I also have the feeling that it was
really a pity that we didn’t meet each other earlier. Because
the kindness and warmth in your Website can make me completely
relaxed and happy. I hope that you will visit my blog too to see if
you can have the same feeling.
Tim Malone commented:
Key point . . . fashion is not defined by the reality of one
individual (the buyer who only buys what they like), but rather the
collective attitudes and fashion opinions of the store’s
customer base and shoppers attracted to the store. Here is my
question . . . How does a merchandising manager change their buying
behavior from relying on their own personal preferences for jewelry
and begin to buy based on fashion trends currently impacting core
customers?
Kris Tsang commented:
Also agree with Rebecca that new merchandise is ALWAYS needed. Ask
yourself, why do you like shopping? It's because you expect to see
something new every time when you look at the shop windows.
Kris Tsang commented:
Agree with Rebecca. The role of frontline salespeople is important
not only to communicate to customers the product features &
benefits, as well as brand promise & value, but also to collect
the opinions of customers (and the potential ones). Stocking the
right mix of assortment is possible only when we also take into
account the "missing" information (why the "potential customers"
did not buy?). If a jeweler incorporates the input from the
salespeople to make/select their product assortment, and give them
all the support they need to communicate and recommend the best
pieces to the customers, salespeople can close the sales with
higher confidence. This is true at the retailer level; same at the
wholesaler and manufacturer level.
rebecca@royalasscher.com commented:
Perhaps one of the biggest mistakes stores make is not having an
integrated approach both internally and with their suppliers. If
sales people are a store’s front line, then they have an
important role to play in communicating to buyers what people are
asking for. Likewise if a buyer chooses to bring a brand on board
then he/she has a responsibility to communicate to a salesperson
their motivations for doing so, providing training and support
wherever possible. Ultimately ensuring that a sales person is
empowered through knowledge to close sales. But to my estimation
the buyer is also responsible for ensuring that a brand is launched
in a press worthy way, which means working with the brand because
of their experience in marketing their product. In these times,
cautious expenditure and clever promotion are the order of the day,
the question most often posed by potential buyers to us is: what do
you do to help us sell your product? People are looking for more
than memo. Smart retailers are seeking ways to increase foot
traffic through interesting merchandising decisions, joint PR
initatives, and staff training to turn that traffic into revenue.
The jewelry industry is indeed fashion focused. But fashion is not
just about anticipating trends and making purchasing decisions to
suit, it is about being brave enough to launch trends. Tried and
true generates sales, but it doesn’t always grab attention
and bring in business – all stores need a constant stream of
new and interesting goods. Further, fashion trend does not mean
fad, some fashions trends last, particularly when associated with
brands that are iconic and timeless. Any woman knows that when it
comes to fashion it is best to have ‘workable options’
and ‘surprise elements’, jewelry is no different
– choice, intrigue and timelessness are all important. In
spite of economic woes buying strategy should not fundamentally
change. All stores need new merchandise even now in the current
climate. People need to keep investing in their business, need to
keep doing the rounds at trade shows, exploring merchandise
options, but look for extra value. Buying brands should mean the
support of a PR machine and sales and marketing expertise. Any
buyer worth their salt needs to be looking for the total package,
which means beautiful goods and the magnitude and support of
strong, iconic brands – so any integrated approach to
merchandising should consider this potential partnership element.
The retailer’s aim is no different to the wholesalers –
ultimately we all want to make sales.
Tim Malone commented:
Hi Jenny Your point of limiting the total number of categories to
offer more in-depth assortments is excellent. I totally concur that
fashion/accessory/jewelry shoppers want larger selections of
products. The days of buying what you want are definately not over
for everyone . . . just the folks that want to make sure they can
sell what they buy and do so at a good profit. LOL
Jenny Seligmann commented:
The best way to compete in todays market is to specialize in just a
few categories. Many people fear this idea because they want to be
everything to everybody. But, what woman wouldn't drive twice as
far for twice as many options? Specializing makes the store a
destination location. By specializing the store narrows the
products offered, but allows for a deeper selection. Great
article...but, please don't tell me the days of buying what I
personally prefer are over :)
Tim Malone commented:
Hi Julian and thanks for bringing to our attention just how
important it is for jewelers to find more effective merchandising
methods and approaches. Wasn't it Albert Eistien who said the
definition of insanity was doing the same thing over and over and
expecting different results? As far as jewelers being stubborn . .
. I have an English Bulldog and one day I was watching the Dog
Whisper TV show. He is a trainer and was working with my breed. He
said the dogs are not stubborn, just determined. It was the only
case that I have seen that required two TV shows to complete his
assignment. He could not get the desired changes in behavior taught
in one show. By the way, he says he trains owners and rehabilitates
dogs. LOL My point in bringing this up is that it takes a lot of
dedication and determination to change a behavior. We are all such
creatures of habit. I hope this blog, my upcoming monthly articles
in JCK magazine, presentations at upcoming JCK shows and private
consulting will help any jewelers out there who understand they
must change the way they are managing their sales, marketing and
merchandising to remain competitively viable.
Tim Malone commented:
Hi Dawn and thanks for responding. I love your profound question
"What got the inventory out the door?" Relying on historical sales
can be very dangerous as it can encourage a merchandising manager
to repeat purchasing mistakes. Consider any product that required
monumental and heroic selling efforts coupled with a low margin to
be such a product. If a merchandising manager just reviews what
sold they can get into a trap of reordering product that should not
be repurchased. As you so well stated Dawn, "Having the ability to
understand your customer's purchasing preferences is essential."
Have a vision for what the evolving customer preferences are for
your store and incorporate them into a purchasing plan that is not
overly dependent on historic sales.
Tim Malone commented:
Hi Kris and thanks for mentioning the importance of integrating
strategy with a true customer orientation. It is so easy to say we
are customer focused and yet not really be. Here is a quick test.
If you think that planning strategy is best approached using the
4P's of marketing odds are you are not customer oriented. The 4P's
of marketing was created back in 1970 when suppliers dominated
their relationships with customers. Today there are very few
examples of suppliers that can afford to dictate how they will
treat and service and suppport customers. There are too many
options available to consumers. Setting strategies with the
customer "top of mind" is very important for all jewelry managers .
. . not just merchandising managers. Great point Kris!
Tim Malone commented:
Hi Peter I really appreciate you mentioning the words “
Julian Rose commented:
Well said, however I am encountering stubborn jewellers who
continue to do as they have always done because that‘s how
they have always operated. Unfortunately one of them is closing
this month and two may not make it to 2010. Tim you offer good
advice and some jewellers are going to have to challenge themselves
to implement good merchandising practices or go out of business.
Dawn Desmond commented:
I found this blog packed full of useful information. Merchandising
Management intergrating the three areas of merchandising,
marketing, and selling are paramount as you mention. Collecting
data to analyze on a frequent basis as well as avidly following
fashion trends tactilely puts you ahead of the curve. Having the
ability to understand your customer's purchasing preferences is
essential. Staying ahead of the curve allows the merchandising
manager to purchase future inventory with knowledge of what the
customer is going to want in the future. What got the inventory out
the door? A purchase plan is only as good as the follow-through. If
you don't follow inventory out the door you won't understand what
element propelled its successful sale. Was it the marketing that
supported it, the sales person who presented it, or another
propellant? All of these components are how I would describe a
merchandising management role. I am very excited about reading
future blogs from you Dr. M. timely information for today's
markets.
Petar Petrovic commented:
Merchandising management is the core of the every day store
survival and potential success in the market. The inventory
purchases, marketing and sales strategies, as you mentioned must be
customer orientated. At the same time, the subject that personally
intrigues me, and challenges most of the jewelers in the market is
lying under the fact that personal preference ALWAYS comes into the
decision making process..... Even if we are buying a line that we
would never personally own, we will affect the selection of the
articles based on our own "experience"... Therefore, it is very
important that you have your tastes more or less matched with your
target market, which can be the case if you understand the values
that your customers perceive in your "store brand" and the style,
design, quality, and price that your customers expect. I believe
that it is very difficult for a very classic person to try to come
up with the selection of merchandise for a hip fashion forward LA
or NYC store... At the same time, working with big brands that will
impose certain amounts of purchases, and collections, you should
always try to emphasize what YOU believe will sell, because only
you know the customers, and in the end should own the relationship
with them.... Therefore negotiating to purchase more of the
collections you see your clients buying, and maybe step by step
incorporating the collections that are a "must" by the supplier,
that might have a slower ROI... You can have a beautiful store, a
great palette of prestigious brands, but get stuck, and end up with
a blocked cash flow only because of bad merchandising management...
Therefore, from personal experience I recommend reding this blog,
as it might save your business from painful mistakes... PP
Petar Petrovic commented:
Great article Dr Malone, will be in touch
Kris Tsang commented:
Wonderful article with fabuluous views! Well, it is not difficult
to understand but just that we always do not find the right way or
the approach as to how to make inventory, pricing, marketing and
sales "integrated". One important thing is that we usually forget
to put the customers on top of mind when strategies are set.
Hedda commented:
Welcome aboard as JCK's newest blogger! Really excited to see how
your posts progress and take readers step-by-step through the
process, almost like a class online!
Dee@jewelrytraining.com commented:
great article
Riken Malone commented:
Great article Dr Malone. Felt like in class. Hope to see more
articles from you. Riken
