Influences

MerchandisingProcess

People Systems

SUPPLY CHAIN

P O S

MERCHANDISING

MANAGEMENT REPORTING

FINANCE

DISTRIBUTION

LOCATIONS

SUPPLIERS

MARKETING

STOCK ALLOCATION

INVENTORY MANAGEMENTPERFORMANCE

ANALYSIS

SALES & FORECASTING

OPEN TO BUY

MARGIN

MerchandisePlanning

Key Drivers

RightTime

Right Processes

RightPeople

Right Quantity

RightProduct

Right Location

Right Location Physical Location Size Occupancy Costs Demographics Classification Grade Sales per m²

Right Time

Speed to Market Seasonality Seasonal Trends

Right Processes Sales and Forecasting Inventory Management Stock Allocation Supply Chain Margin Management Performance Analysis Open to Buy Industry Benchmarks KPI’s

Right People Level of Experience Level of Expertise Succession Planning Incentive Programs Training and Development Programs

Right Quantity

Size Matrix Colour Assortment Fabric Assortment No. of Styles Quantity per Style Sleeve Lengths Pant Lengths Category Mix

Right Product

Target Market Suppliers International Trends Value Equation

Price Fashion Quality

Common Problems Experienced

Late to Market High Stock Holdings Wrong Product on Racks Timing of Markdowns Inadequate Stock Allocation Methodology Range Planning not identifying Key Trends Inadequate Margin Management Lack of detailed Management Reporting No Lifecycle Management Strategy No Pre-Season Strategic Plan

START

Merchandise Planning Cycle

Review Past Season Company Performance vs. Plan Category/Dept/Store Sell Thru by Product Type Missed Opportunities

Step 1

Initial Budget Proposal for New Season by Store at Company level taking into account Current Trends New Stores Refurbishments Relocations and Closures Indicative Market Financial Trends (CPI, Industry Growth) Gross Margin Target

Step 2

Commence Merchandising Planning Process at Department Level for Sales Stock (WOS and S/T ) Markdowns Spend (Open to Buy) Gross Margin Average Retail Pricing

Step 3

Grade Stores by Turn Over Take Department Product (Sales/Stock) Plans down to Category level by month by week by Graded Store by Climate Grid by Store Demographic

Step 4

Review Planned Sales % Contribution by department, or by category, or by Store vs. Previous Like Season

Step 5

Quantify Product Mix Number of Styles Quantity per Style Sleeve Lengths Pant Lengths Top to Bottom Ratio’s Colour Plan Fabric Plan GP Plan Price Point Plan Size Matrix

Step 6

Sign-Off Product and Financial Plans

Step 7

Supply Chain Optimisation Supplier Selection (Fashion/ Quality/Price) Logistics Planning (Speed to Market)

Step 8

Stock Allocation Process by Style by Store (incl new/Refurb) by performance vs. plan Delivery to Store

Step 9

Step 10

Sales/Stock Performance Review by Store by week by month

FAQ Relating to Merchandise Planning Cycle

Step 1 Do you review previous season? At what level of your assortment do you analyze? What is the format you use in this process, i.e. SWOT analysis? Do you have a standard document? What do you do with the information? How quickly do you react to the analysis? Who drives this process? Do you have follow up meetings? To whom is the analysis presented? How long after the season is the analysis done? Are there checks and balances in place to ensure results are taken into

next like season buy.

Step 2 Who does initial sales forecast? What factors are considered in preparing this forecast? Who provides input into the process? Are Operations involved in the process? Who is accountable for the budget? How is the budget presented?

Step 3 Do you plan by week/month/season? How do you determine benchmarks for:

WOS Stock Turn Markdowns OTB Gross Margin Ave. Retail Price

FAQ Relating to Merchandise Planning Cycle

FAQ Relating to Merchandise Planning Cycle

Step 4 How are stores graded/ranked? What factors are considered when grading stores? Who provides input into this process?

Step 5 How much emphasis is placed on % sales contribution? At what level is this broken down to?

Step 6 Who determines the assortment plan? How do they go about developing their plan? Who drives the plan? Who owns the plan?

FAQ Relating to Merchandise Planning Cycle

Step 7 Who signs off plans? Who is accountable and takes ownership of plans?

Step 8 What are criteria for selecting suppliers? Who sets criteria? Are suppliers given regular feedback on performance? What happens if there are quality issues? What happens if there are late deliveries? What happens if a supplier cannot meet cost price?

FAQ Relating to Merchandise Planning Cycle

Step 9 What criteria are applied to determine quantification to each store? How often are criteria reviewed? How do you determine what a new store should receive as opening

stock? Who controls the allocation process?

Step 10 Is there a process to review performance? What happens to information generated in these reviews?