Here is the eleventh entry of the Twelve Components You Need in Your Merchandising Plan titled: Use a Six Month Buy Plan- Always work six months in advance in planning your inventory and developing your marketing programs. advertising plans and sales promotions. In traditional retail management there are two seasons. February through July is called the spring and summer season; and August through January is called the fall and winter. This means that items purchased for sales in February and Valentine’s Day are completed by JCK’s Las Vegas show or right after the show. All advertising and sales promotions are completed by July too. By using a seasonal approach to selling merchandise managers can develop merchandise planning systems to support four key activity areas: retail communication mix, planning merchandise assortments, pricing strategies and buying plan activities. Integrating buying, marketing, and selling strategies is highly desirable when managing any retail business; but especially so for jewelry retailers dealing with the fashion trends.
Many retail jewelry stores have identified staple merchandise as those items that are replenished to maintain a consistent inventory level. These items tend to have a predictable demand, strong history of past sales and future sales can be relatively accurately forecasted. Most retailers use automated point of sales systems to monitor and measure current sales for items at the SKU level. This can be a great aid, especially when allowances for seasonal variances and changes in trends can be accounted for. The key to seasonal buying is based on developing ordering decision rules for optimum restocking. Stores with multiple locations find the need to plan for backup stock to support the fluctuation in demand from store to store and to offset the lead time to receive back up stock. One of the key topics many retailers are becoming more and more concerned with is their vendor’s product availability to support the retailer’s backup stock requirements.
There is an ever present balancing act that merchandisers are engaged in between the cost to carry inventory and the lost sale due to out of stock inventory. Larger retail organizations and especially those that deal with more staple items can manage their inventory using order points; a predetermined level of inventory that initiates new reordering. Dealing with highly fashion-oriented merchandise makes this more difficult for retail jewelers. Fashion trends can influence the demand for jewelry very quickly. A six month buy plan creates the need to assess trends and to formally respond and react to trends in very strategic ways.
Most retail jewelers deal with more fashion-oriented merchandise that is much more unpredictable in demand, may not have much sales history and prove to be much more challenging when attempting to predict future sales. Developing a communications plan that integrates all advertising, event marketing, public relations, direct marketing, interactive/internet marketing and sales promotion helps a jewelry company strategize how to convert prospective and past customers into current buyers. Waiting for media vendors to contact you for the next advertising insertion order is the wrong way to market the company or manage sales. Knowing what items will create traffic into the store or online is highly desirable market intelligence and is the necessary means to drive the company. All sales promotions need to be planned six months in advance to insure product availability and media buys have been well negotiated at costs advantageous to the company.
Merchandise assortment should be perceived as one of the most compelling selling tools the company has available. Therefore, deeper selections of product offerings that more specifically define the store through jewelry design and style motif is imperative. No longer can stores afford to offer a little of something to everyone. The days of that sort of merchandising have ended. Define your store’s approach to fashion and accessories and jewelry design and style through the fashionistas’ preferences your store is able to attract. Build your inventory and word of mouth marketing approaches around these highly influential consumers. Tap into their intuitions and preferences to better understand the potential traction of current fashion designs and styles and what they see their favorite brands evolving into. Don’t stop there . . . check out their favorite brands and confirm what these brands will be introducing into the next season. Now you can more effectively create a plan for your own seasonal needs by category by sub-category.
The more consistently jewelry offerings complement current fashion trends; the more likely the products will turn at the margins projected. Pricing is all about selling value. Today’s highly value-oriented buyers think about the perceived benefits derived from jewelry and their own perceptions of the costs to acquire the jewelry. The more perceived value and the less perceived cost; the more appealing the offering will be to prospective shoppers. Pricing strategies should include a range of items offered at various price points. Review your current inventory and always develop seasonal merchandising plans with list price selling points as a key decision making factor.
Retail jewelers have to be better merchandisers than most of the larger retail organizations because there is less room for error. Errors such as ordering merchandise that proves too difficult to sell or buying inventory levels that run out too soon or can’t be restocked soon enough to avoid missed selling opportunities or items that don’t turn to generate the cash flow required are even more damaging to the single store owner. Using a six month seasonal buying plan helps manage merchandise and sales more accutely by drawing out the strategies and resources that will be necessary to be successful. When is the last time you asked yourself and the store’s employees what it is going to take to be successful? A six month plan helps you do this in very orderly, methodical and strategic ways.