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BUYING CYCLES AND TOOLS OF MERCHANDISING
Fashion BuyingMultifaceted job involving:fashion forecastingrange planningorder sourcing budgeting and marketing.
Refers to key events and processes involved in developing a garment range for a retail or mail ordering company.
Driven by a fixed calendar of trade fairs, fashion shows and events etc.
Traditionally splits into two main seasons:
Spring/ Summer(Feb to Jul) and Autumn Winter (Aug to Jan).
Length of the cycle varies between the companies but usually takes a year.
Season Order Confirmation Order Delivery
FALL December March January April February May
HOLIDAY March June April July May August SPRING June September July October August NovemberSUMMERSeptemberDecemberOctober JanuaryNovember February
An example of the buying cycle for phase 1 Autumn/Winter10 range Task Approximate dateReview of current seasons salesearly August09Budget planningmid- August09Comparative shoppingAugust September09Directional shoppingAugust October09(Fabric sourcing)October09 Range planningOctober November09Garment sourcingNovember09Price negotiation with suppliersNovember December09Final range selectionmid December09Placing orders for rangingDecember January(Product development- samples, testing etc.)January April10Bulk garment manufactureApril July10Delivery of products to retailerAugust10IN STORESAugust October10
Buying ProcessBuyer is always working on two seasons ranges simultaneously.
i.e. while planning a range for the autumn winter season, the buyer simultaneously works on the garment fittings, fabric sample and quality approval of the range for spring summer season.
CONSUMER BUYING BEHAVIOR
Refers to the buying behavior of final consumers -individuals & households who buy goods and services for personal consumption.
Factors Influencing Consumer Behavior:CulturalSocial Personal Psychological Buyer
Review of current seasons sale:The available sales figures reviewed by the buyer to know garment's performance.
The merchandising department compiles a review of previous seasons performance of the range to identify the best sellers and the poor sellers.
The review is known as sales review or range direction meeting.
Budget Planning:Planned by merchandiser.
Based largely on last seasons performance as well as any anticipated developments.
Buyer needs to be far more informed than any other department.
Fast FashionA business strategy aimed to reduce processes in buying cycle and lead time for getting new fashion products into stores in order to satisfy consumer demand at its peak.
Aims at the more fashion conscious younger end of the market.
Buying cycle is usually much shorter than a year.
The response time has to be very quick.
The concept has become mainstay of the UK fashion industry.
The fashion retailers usually introduce new ranges to stores at least once a month.
The bestsellers are retained while the phases are introduced frequently to the stores.
Such ranges, also known as transitional help in filling the gap between one season and next.
This makes the fashion buying environment extremely challenging as the workload for two or three seasons overlaps, leaving no time to pause in between new ranges.
Directional & Comparative Shopping
Directional Shopping Directional Shopping - trips to gain inspiration for design concepts for a new season.
Depending on the product type & the companys travel budget, designers & buying teams visit major fashion cities.
Stores of most influential designers & retailers, usually in a higher price bracket than the market they design for are visited.
They return with bought samples (notes, sketches & garments) for inspiration.
London, Paris & New York are destinations popular with designers for most product types & market levels.
Milan is often visited by lingerie designers.
Childrenswear designers may find more inspiration in Tokyo.
In London, designers usually aim for the major fashion departmental stores like Harrods, Harvey Nichols & Selfridges.
In Paris, the main department stores which stock fashion designer wear are Galeries Lafayette & Au Printemps.
A directional shopping trip to New York usually includes visits to Macys, Bloomingdales & Henri Bendel in Manhattan.
In Milan, La Rinascente is the key department store which is visited.
Buying team visits stores stocking merchandise following different trends.
Most stores visited stock designer ready-to-wear ranges.
They may also visit mass market stores which are aimed at a younger market & or are more expensive than their own range.
Basically the buying team makes notes on shapes, details, colours & fabrics for reference
After this entire exercise a picture can be formed of the key trends which are coming through.
Buying teams are usually given a budget to buy garments during directional shopping trips.
These are generally referred to as bought samples, which typify the trends.
Comparative ShoppingComparative Shopping is often referred to as Comp. Shop.
Usually undertaken several times each season by the buying/design teams.
Involves observing the current merchandise in the stores of competitors which sell comparable ranges (similar product types & prices).
The aim of Comparative Shopping is not to copy competing retailers products.
It is conducted to be aware of the choice of merchandise on offer to target customer to ensure that the company offers consumer value for money & is aware of developments.
Report - sketches & a grid with descriptions of products compared with prices, fabrics & colours of similar merchandise from competing stores.
This report concludes by analysing how competitors ranges compare with each other & noting any important trends or styles which are missing from the companys range.
Range Planning & Selection
Range Planning is the stage when buyers define the detail of the range that is to be offered to the customer in terms of styling, fabric, design details, suppliers and prices.
Final Range Selection involves contacting suppliers, amendments to be made, renegotiating prices and writing range plan
Initial orders are sent and New Line sheets are generated by buyers
Importance To increase sales To offer existing customers new products To attract new customers To offer choice and variety of product To replace products which are not selling well To build on the success of good selling products To differentiate the range from the competition To be in line with seasonal trends To utilize new raw materials, new techniques, or new technology
Business ReviewUnderstanding Cooperative Objectives or Mission
Understanding Corporate Identity
Defining current business position
SWOT analysis under the marketing headings product, price, place, promotion
Defining desired position in terms of sales/profit growth
Importance of knowing the market/trade requirements relevant to your product.
Planning ProcessMarket Research helps create concept boards
Collate the products
Reviewed into themes or ranges
List products in the relevant product group
Group the new product samples into the new colour themes/concepts.
ContdInclude details of the product to be adapted
List according to priority and demand.
Include no. of new products required
Determination of the no of collections to be developed
Identifying starting points for collectionsRetained Products
Raw materials
Innovations
Products to be Adapted
Basic Stock ListHomogeneous
Heterogeneous
Seasonal
Non seasonal
Model StockAssortment of Staple goods
Assortment of Fashion goods
ClassificationPriceSize MaterialColour
Assortment of Seasonal goods
Quantity To PurchasePeriod for which Purchasing is done
Estimated Sales for the Period
Merchandise on Hand and on Order
Desired Merchandise at the end of a Particular Period
Period for which Purchasing is done
Open to Buy [OTB]Controls the Volume of Inventory
Hand to Mouth BuyingToo much price FluctuationsIncrease risk for VendorsIncrease risk of loss in sales
Speculative buying
Quantity discounts
Supply Conditions
Storage Facilities
Estimated Sales for the Period
Changing Business Conditions
Competition
Economic conditions
Unemployment
Fashion trends
Desired Merchandise at the end of a Particular Period
Price fluctuations
Availability of Supply and Materials
Type of Retail Institutions
Availability of discounts
Stage in the Product Life Cycle
Factors Affecting PlanningType of Retail institution
Past Sales Records
Determination of Consumer Wants
Type of goods offered
Elimination of Merchandise Lines
Retail InstitutionsAvailability of capital resources
Trading Area served
Nature of goods carried
Competition represented in the Trading Area
Types of goods offeredFashion goods
Seasonal goods
Convenience goods
Shopping goods
Specialty goods
Elimination of Merchandise linesAttention to stock turnover and rate of salesAvailability of substitutes (staples)No improvement in salesLittle contribution to the sale of other products.
SignificanceFirm Plan is established Reduce the amount of workReduction in the costCreation an action planDesired RevenueManaged Product Development
Time And Action Calendar
IntroductionBasis for all merchandising planning.
It is designed to control the key events needed to get the right apparel products, in the right mix, at the right price to the right customer at the right time.
Also called as Merchandising calendar, Key events calendar or Critical path calendar.
A planning tool.It is the central mechanism from which all marketing schedules and all merchandising and manufacturing plans evolve.
It is the clock that drives merchandising product development schedules, manufacturing planning and shipping schedules.
It sets forth the starting and completion dates for all critical events necessary to achieve a successful season.
The calendar includes information about the name of the buyer, season, style, wash and quantity.
The calendar includes the target dates for each event such as pre production garment approval, lab dip approval, pattern approvals and when graded sates of pattern should be sent out.
The person who is responsible for an event must sign it off in the system when the system has been completed so that everyone can monitor the status of the line development.
Key Elements.Line preview dates by season.
Line release dates by season.
Start ship date
End ship date
Weekly sales plan
Weekly shipping plans
It is the merchandisers deadline for having all prototypes and pricing for a new product line completed.
Merchandisers work back from this date to create their product development plans.
It is the date of seasonal sales meeting where the merchandising team presents the line to the sales force.
Line Preview Date
Line Release DateIt is the merchandisers deadline for having all sales samples ready for the sales team to begin presenting the new line to the customers.
This deadline is crucial to the success of the sales effort, since most sales representative schedule their earliest appointments with their most important customers.
Weekly Sales PlanIt measures the effectiveness of a product line for the merchandising department.
A graphic analysis of this plan can project increase or decrease in overall sales for a season.
Weekly Shipping PlanIt shows season to date as well as shipping statistics for a specific week or monthly time period.
It helps to determine whether or not the product mixes being delivered to distribution meet the shippability.
Determination of Lead TimeCPM is used.
It is the key to a successful merchandising calendar.
It determines the critical functions necessary to perform an activity or series of activities required to achieve an overall objective.
After the critical functions are selected, each one must be analysed to determine the time required to accomplish it.
A typical merchandising calendar may have 25 to 50 functions for a product line.
Sheet1
FLOW STRUCTURECONCERNED DEPARTMENT
CAD DEVELOPMENTDESIGNER
CAD DESIGN SELECTIONMERCHANDIZER /BRAND
FABRIC DEVELOPMENTPURCHASE TEAM
SAMPLE MAKINGDESIGNER
SAMPLE SELECTIONMERCHANDIZER / BRAND
FABRIC ORDERING FOR SAMPLE/PRODMERCHANDIZER
PREPARING BOOKING SHEETMERCHANDIZER
ORDER RECEIVEDDISTRIBUTORS / SALES MGR
COLLATING ORDERSMERCHANDIZER
PROCESSING ORDERS AS CONFIRMEDSUPPLY CHAIN, PURCHASE
KEEP TRACK ON PRODUCT DISPATCHMERCHANDIZER, SUPPLY CHAIN
MERCHANDIZE PLAN IN RETAIL TEAMMERCHANDIZER, RETAIL TEAM
Sheet2
TIME 'n' ACTION CHART
BACKWARD PLANNING
ACTIVITYLEAD TIME
BUYER RETAIL NEED STOCK ON1st week FEB
IN WAREHOUSE OF IMPORTER OFFICE
IN NEW YORK15th JAN
NEW YORK PORT15th DEC
GOODS EXPORTED15th NOV
PRE PRODUCTION SAMPLES30th SEP
ORDER CONFIRMATION - Lead time for Prod
90 days lead Time15th AUG
SALES MAN SAMPLES15th July
(With Actual Fab / Trims )
FIT SAMPLE APPROVAL30th June
FINALIZATION ON PRICE OF SAMPLES GIVEN BY BUYER13th June
APPROVAL OF 2nd PROTOTYPE SAMPLE20th April
APPROVAL OF 1st PROTOTYPE SAMPLE [ Style ref]05th April
SAMPLE PACKAGE RECEIVE FROM BUYER20th March
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Sheet1
ACTIONDAYS PRIOR TO DELIVERY
COLOR
color satndards received from buyer65 days
1st lab dip submit to buyer60 days
comments from buyer55 days
2nd lab dip submit to buyer50 days
comments from buyer45 days
TRIMS
care labels approved by60 days
Buttons approved by60 days
threads approved by60 days
others35 days
ALL TRIMS APPROVED BY60 days
ALL TRIMSEX SUPPLIERS40 days
ALL TRIMSIN FTY30 days
SAMPLES
fit sample submit65 days
fit sample approval58 days
2nd fit sample submit51 days
2nd fit sample approval44 days
size set submit33 days
size set approval31 days
green seal sample submit30 days
green seal sample approval25 days
gold seal sample submit10 days
gold seal sample approval5 days
TESTING PROCESSES
prod fabric submitted for testing65 days
test report available by60days
prod garment submitted for testing35 days
test report available by30 days
PLANNED CUT DATE30 days
PRODUCTION
fabric delivery local35 days
fabric in fty imported
begin cutting26 days
begin sewing24 days
begin washing15 days
begin packing8 days
Final audit4 days
EX FACTORY DATE0 days
EX COUNTRY DATE
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Sheet3
Critical Path Method
Critical PathAn activity is any discrete part or task of a project which takes resources and time to complete.
Activities exhibit precedence relations.
Activities with their precedence relations form a project network.
The longest chain of activities considering task dependencies is called critical path.
Significance of CPMCPM is the key to successful merchandising calendar.
It determines the critical functions necessary to perform an activity or series of activities required to achieve an overall objective.
When a critical activity is delayed it forces all subsequent tasks to be delayed.
Determining Critical PathThe activities involved in development, execution and delivery need to be analyzed.
Determine the time required to accomplish them.
Determine the critical path.
Critical functions are represented throughPERT ChartsGantt Charts
PERT Charts
PERT is a method to analyze the involved tasks in completinggiven project, and identifying time needed to complete the totalproject.
PERT chart tell a managerlist of operations necessary to finish a projecttime needed for each operationcritical activities activities that consume the largest part of project-completion-time
Gantt Charts
A series of parallel horizontal graphs which show schedules for functions plotted against time.
Product Development
Time and Action Calendar
Production & Delivery
ReferencesCareers in Fashion & Textiles-By Helen GoworekFashion Buying-By Helen GoworekFashion Marketing-By Tony HinesFast Fashion-By Liz BarnesApparel Merchandising-By J.A. RosenauMerchandise Buying-By M.S. Bohlinger
THANK YOUPresented byAbhilasha HoonMansi GuptaReshma RajendranShivali DhimanSurasree Paul AMIT VII(2005-2009)