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©Leigha Main 1
January 2016
Apparel Markdown and
Clearance Planning
Association of Golf Merchandisers
Presented by: Leigha Main
AGM Education Team
©Leigha Main 2
The Top 2 Questions Asked in Golf Retail, Perhaps all Retail are: • What’s New?
• When Does It Go On Sale?
• Ensuring you have good, honest answers to these 2 questions could be the key to your retail success not only in 2016 but beyond
©Leigha Main 3
Disciplined Markdown and Clearance Planning Will Drive Up Your Maintained Margin and Top Line Sales Key Benefits Of Good Markdown Planning:
Improve Your Ending Inventory Position
Improves trust with customers
Elevates Profile of Retail Business Drive Up Top Line Sales
Improve Maintained Margin
Markdown Planning
©Leigha Main 4
Markdown Planning Is Among the Most Important Retail Disciplines For The Health Of Your Business
u Markdown planning is an important part of ensuring your year end profit will be in dollars not all in inventory
u Good markdown planning will help drive up maintained margin in fashion, seasonal based product
u Proper markdown planning will help elevate the perception of your business in the eyes of your customers
u Disciplined markdown planning will mitigate the need for deep discounting and extreme clearance efforts
©Leigha Main 5
If You’ve Used Any Of These Statements YOU Might In the Way of Successful Markdown Planning for Your Shop u “I think my members are going to love what
I bought this season – I don’t think I’ll need to mark anything down this year”
u “We don’t do markdowns or have a sale section at our club, it’s a very high profile club, our members don’t care about price”
u “I’m going to wait and see how I do this year and then decide how I’ll markdown or clear if its necessary”
u “This collection was hardly touched I think I’ll just box it up for next year – It will look like new”
©Leigha Main 6
Markdown Planning Should Be An Annual Task at the Beginning of Your Season with Some Up Keep Monthly
u The most successful retailers know that planning your markdowns is as important a part of a successful retail business as planning your arrivals
u I encourage you to plan the markdown trajectory of each delivery prior to it arriving to your shop ~ the same way you plan where its going visually, and your promotion to your members/staff you should plan its ‘life’ in its shop
u Put aside 2 hours to catalog the arrivals for your largest receiving season (March, April, May for instance) and then add as you write additional orders in season
u Example: 1. Use an X to indicate
arrival 2. Use a 1 with the date
1 (1/10) to indicate the 1st markdown
3. Use a 2 with the date 2 (2/10) to indicate the 2nd markdown
4. Use a C to plan the clearance
©Leigha Main 7
There are a Number of Factors To Consider When Planning Your Markdown Schedule – Timing, Discount etc. u Use your calendar, anticipated traffic etc. through the shop to determine the
amount of time a fashion group should stay at full price u In this example we determined 60 Days was the right amount of
time ~ an average member played 3 times per week meaning in 60 days they had seen the collection 27 times
u Determine the number of markdowns you want your customers to see through the lifecycle of product in your shop u In this example we determined we would do 2 markdowns, the
first to 25% off, the 2nd to 50% off. Each level would be for 30 days
u Determine the ‘end of life’ plan for for each fashion group u In this example we determined that ‘Clearance’ would move
every polo/short to $19.99 and it would remain there until cleared
No Fashion Item Should Celebrate a Birthday in Your Shop!
©Leigha Main 8
Here is a Sample Markdown Plan – Built With In A Simple Excel Workbook u Here is a sample excel workbook used to plan out apparel and footwear
markdowns for a traditional private club
©Leigha Main 9
Healthy Margins Can and Will Be Achieved With A Good Markdown Plan Ø One of the most common pieces of resistance I hear from a merchandiser, pro,
general manager etc. on their fears and concerns around markdown planning is that it will drive down their maintained margin ~ I feel strongly good markdown planning will do the opposite
Ø Sample Maintained Margin Calculation:
©Leigha Main 10
Sell Through Tracker: A Tool To Help Isolate Good Selling Sizes, Silhouettes etc. Ø Consider using a sell through tracker to help isolate top selling sizes, silhouettes etc. Ø This simple too can operate as a good companion piece to your POS reporting and/or
to augment any short comings you POS might have on sell through reports
©Leigha Main 11
Visual Ideas to Drive Traffic and Move Through Product Quickly Ø Mark each tag with the ‘new’ price vs. just a % off sign Ø Ideally in red pen, a colored sticker to help make it easy for a customer to identify
value Ø Do the math and be specific ~ there is great benefit to marking a tag with ‘ Was $80,
25% off now $37.50’ vs. simply hanging a sign that says ’25% off’ in the section Ø Sign your markdown section to drive traffic – could include window markers for glass,
painted boxes and/or wood sale letters
©Leigha Main 12
End of Season Clearance Is a Healthy, Necessary Step To Clear Unsold Fashion Merchandise Ø A ‘Clearance’ Sale should be an annual calendar event to liquidate any unsold
markdowns, merchandise Ø This should be the last step prior to writing off/donating to charity Ø It could include a member/customer and/or Friends & Family sale where all items,
regardless of cost are a blanket price $19.99 Ø It should include visual change similar to the hanger tags below to help drive the
visual message Ø It should include as wide a net as you can cast ~ members, staff, family of staff,
community members etc.
©Leigha Main 13
There are 4 Key Ways To Improve Margin In 2016
Ø Adding assortment in long margin categories such as junior apparel
Ø Adding in long margin, season-less categories like t-shirts, sweatshirts etc.
Ø Modifying the balance between fashion goods and core/essential goods to more essential items you carry over year to year vs. just for a season
Ø Augmenting you buy to earn better embroidery costing, off invoice volume discounting, rebates
©Leigha Main 14
Improving Margin in 2016 – Adding/Augmenting Your Junior Assortment Ø Junior golf apparel to include ‘playing age’ juniors (5 years old & up) as well as new
babies being born into the club are both significant sales and margin opportunities Ø These items should all have long retail lifecycles in your shop (1+ years) simply
needing to be counted and filled in vs. in season markdowns Ø The ‘season-less’ nature of these goods should enhance margin
Tavistock Country Club Cherry Hill Club Deer Ridge Golf Club
©Leigha Main 15
Consider Adding More Season-Less Product To Your Apparel Assortment Ø T-shirts, sweatshirts, casual cottons aren’t season specific so can be a part of your
full priced assortment all year long Ø Items in this category, similar to things like hats and accessories bare more initial
mark-up than polo’s, shorts etc. and are hard to benchmark off course
©Leigha Main 16
Modifying Your Assortment to Include More Essential Items Ø Most shops offer good essential polo options for men and often women, considering
augmenting that to include an ‘essential’ ¼ Zip for men, vest for women, bottoms program for men & women etc.
Ø Key things to ask a vendor when choosing Ø Expected length of time with that sku – aim for styles that will be in
the line 18+ months Ø Low Cost/No Cost embroidery – Ideally you would earn n/c low cost
embroidery without any out of line embroidery levels to earn the n/c embroidery
Ø Look for fashion and core colors – you’ll want an assortment that include colors other than navy, black and white
Ø Look to choose styles/brands that will help you with a full size run S – 3 XL for men and XS/S – 2XL for women would be ideal
©Leigha Main 17
Plan and Communicate Will Equal Success in 2016
Ø Build a Markdown and Clearance Plan With Your Team for 2016 Ø Similar to any change planning, early before the season starts, will
help ensure success Ø Communicate your plan clearly to all staff members and management
Ø This will hold everyone accountable and help make sure everyone is bought into the sample goal and process
Ø Consider a new tracking strategy to support your event Ø Try using the sell through tracker for all women’s fashion in 2016 or
add in a Friends & Family event at the end of your season Ø Remember no one cares what you paid for it but you
Ø Sometimes things sell better than we thought, sometimes they don’t ~ don’t ‘hold on’ to goods that are selling well or not
Ø Be transparent with your customers on markdown and clearance activities Ø Build and practice language for communicating your markdowns to
your customers the same way you do product knowledge buzz words
©Leigha Main 18
Thank You To My Fellow AGM Members!
Thank you to all of you and special Thank You to Desane Blaney who has been a friend and mentor to me since joining the AGM 15 years ago. I’ve been lucky to do a number of different thing in golf retail
in the last nearly 20 years – participating in the AGM is the single most important thing I’ve done to
continue to grow and learn. Email me: [email protected]
Call me: 610-247-9809 Follow me @LeighaMain
©Leigha Main 19
The Educational Voice in Golf Merchandising Since 1989
Association of Golf Merchandisers PO Box 7247 – Phoenix, AZ 85011-7247
www.agmgolf.org – [email protected]
Phone: 602-604-8250 – Fax: 602-604-8251