Merchandise and financial planning in

Targetta

Märt Parker

www.targetta.net

Overview

• Why forecast?

• Store planning

• Merchandise planning

• Financial forecast and budget

www.targetta.net

About Targetta

• Develops planning software for retail companies

• Founded by former SAP BPC consultants in 2015

www.targetta.net

Why forecast?

www.targetta.net

Strategic Profit Model

ROA

Net profit

Net sales

Net sales

/ Net profit %

Net assets/ Asset turnover

x

Actions vs Budget

Integrated plan (sales, merchandising)

Initiatives Budget

CEO

Sales manager

Purchasing manager

…

GMROI

Conversion rate %

Visitor count

Profit & Loss

Cash flow

Balance sheet

People KPI

www.targetta.net

Goal setting and planning in Targetta: top-down and bottom-up

Corporate goals

Revenue Gross Margin

ROA 20%Revenue 10%Net profit 7%

OPEX, CAPEX and employees

Visitor count Avg ticket Conversion rate%

GMROI Inventory turnover

Business unit plansStore sales plan Merchandising

budget

Formal planning processes Targetta covers 3 most common

Boston Retail Partners. Annual Merchandise Planning and Allocation Survey 2014

Sample case

• SportLine sells seasonal fashion/sport merchandise

• 30 stores

• online shop

www.targetta.net

Let’s compose the management team…

CEO CFOMerchandisingmanager

Sales manager

www.targetta.net

Targetta home page

Goal setting

KPI-s

• employees can influence the outcome

• measuring is frequent (monthly, weekly)

• constant feedback, frequent revision of plans

How to make employees accountable?

CEO

ROA 20% Revenue 10% Net profit 7%

Store planning

Sales manager + store managers

Revenue growth 10%

Store plan Store manager can influence CR% and average ticket

Marketing manager can influence visitor count Category manager can influence gross margin

Revenue growth 10%

Merchandise planning

Merchandising manager

GMROI 130%Revenue 10%

Gross Margin 40%

Merchandising Budget Plan (seasonal goods)

Sales forecast

Markdown

Stock-to-sales ratio

Beginning of month

inventory

End of month inventory (*)

Additions (*)

Financial planning

Cash reserve Net profit

CFO

Financial planning

Merchandise & store planning

OPEX, CAPEX, employees

Profit & loss forecast

Cash flow forecast

Balance sheet forecast

www.targetta.net

Profit & Loss forecast

Chart-of-accounts freely customizable

Driver based accounts & planning

logic

www.targetta.net

Regular activities• 1x year:

• compose a budget

• Every month, week:

• forecast updates

• actual vs budget

• forecast vs budget

www.targetta.net

Märt Parker

+372 514 6334

mart.parker@targetta.net

@targettanet

www.targetta.net

Thank you!