RETAIL MERCHANDISING

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

Source what?
Am going to be a
What are you
retailer.
planning to sell?
Where shall I source
from?

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

What is Merchandising Mix?

•It’s the total set of all products

offered for sale by the retailer,
including all product lines sold to all
consumer groups.

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

What is Merchandising Mix?

• The term merchandise mix is essentially the product mix/ product assortment/ merchandise mix/
merchandise assortment/ inventory mix at retail store offers. It is the variety of merchandise that the
retailer decides to offer to the customer and creates an image for the store.

• We’ve looked at the various types of retailers, and every retailer has their own market segment that
they cater to. So, the mix is a customized offering that the retailer displays in order to meet and
exceed the expectations of their customers and still keep the scene sane!

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

What is Merchandising Mix?

• The mix includes variety, assortment, brands, quality, price points of merchandise.

• The key to effective merchandise planning lies in exceeding the needs and wants of the customer.

• Brands update their merchandise mix according to its target customer to become relevant.

• While planning merchandise mix a retailer must necessarily have complete information about this
target audience & do the market situation analysis.

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

What is Merchandising Mix?

• Fashion retailers perform functions that are related to service and product assortment known as
merchandising. Merchandising consists of four main components: planning, controlling, managing,
and buying. A perfect blend of all these components is essential in creating a desirable merchandise
mix.

• The merchandise mix is further subdivided into : Product Line, length, breadth and depth.

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

Why do we need to analyze line, breadth, depth of product mix?

• Too much merchandise - A store that carries an excessive amount of different products may lack
focus, which could confuse customers.
• Too little merchandise - A store that doesn’t meet expectations and has very little to offer, could
disappoint customers.
• Too many brands – confusion, cannibalization
• Too few brands – no choice for the customer

A retailer thus needs to decide which products to sell and which might be better off being left out of the
mix.

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

Components of a merchandise mix

The length, depth, width of a product line or the product portfolio of a brand is a strategic and significant
dimension of brand building

https://www.youtube.com/watch?v=vPP8X9Q8T0A

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

What is a Product Line?

• A product line can be described as a set of products that are meant for similar customer groups,
provide similar value, and are sold through the same channels for a particular brand. Simply put, it
refers to the various distinct product categories that a brand offers.

Beauty Cosmetics

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

Components/ elements of a merchandise mix

Breadth/ Width

• The breadth of a merchandise mix refers to the

Cosmetics
variety of merchandise in a retail store. It identifies
Skin care
how diverse the assortment of a particular store is. A
Fragrances..
range of separate product lines that an organization
offers to its consumers. The number of products within
product line or brand .

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

Components/ elements of a merchandise mix

Depth

• Depth of merchandise stands for the number

of product variations in a merchandise mix.

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

What is a Product Line Length

• Product Line length refers to the number of products/brands that come under a single product
category/line.

• The question is - Having too many brands/products under a single product category or having one or
two effective & revenue-generating brands?

Too many brands - Your target audience might overlap which would lead to cannibalization (eating
up sales of company’s existing products)

Too few brands - Here you are overly dependent on these brands. They might not be utilizing total
capacity and cannot make most of evolving customer demands and segments.

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

Perfect merchandise mix

1. Synchronize it with the store image

2. Find the customer's perception of the store and what the customers expect from it.

3. Correct depth and breadth.

The bottom line is that the merchandise mix is best when brands know their customers and what the store
means. If retailers fail to do this, shoppers will be confused and eventually get alienated.

This applies to retailers with a broader merchandise mix.

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

Perfect merchandise mix

4. Study the inventory and its sell through rate

Fashion retailers can use sales and inventory data to forecast what a particular store's customers will buy.
This data can also be used to create successful merchandising strategies. For instance, if a shop sells
merchandise of a specific brand or designer in huge volumes, they should consider increasing the range
of products from that brand or designer.

On the other hand, if a retail store sells a product in different sizes and colors, they can take it as an
indication to make the range deep and add more variants.

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

Perfect merchandise mix

5. Keep up with local and national trends

• Trends always influence the merchandise mix of a fashion retailer. This is because customers tend to
follow the latest trends, and they will come looking for those clothes in retail stores.

• During the pandemic, many customers have turned toward sleepwear, casuals, loungewear, and
face masks. Thus, fashion retailers have started increasing volumes of these clothes in their
merchandise mix. Retailers that follow local and national trends and modify their assortment
accordingly make much money from changing consumer demand.

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

Perfect merchandise mix

6. Analyze shopping habits

Observing customers' shopping habits is one of the best strategies for creating a successful merchandise
mix. The observation can be done by retailers at two levels: online and offline.

Retailers can observe online shopping by looking at the retailer's online store data for the most searched
items, brands, product types, variants, deal makers, deal breakers,

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

Perfect merchandise mix

7. Forecast

8. Change with season/ trends/ festivals/ occasions

• For a successful merchandise mix, retailers should ensure that they arm themselves with the latest tools
to help them forecast products. They should find tools such as inventory management systems that
can easily track the stock level and inform store managers about the types of products sold every
month.

• This data helps them in making strategies for a merchandise mix. Nowadays, there are various AI-
driven tools that a retailer can use to make assortment decisions based on data from inventory
software and sales numbers.

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

Factors to evaluate for making a merchandise mix

• Compatibility among product lines • Physical attributes of each product line

• Product substitute • Product standardization

• Product complements • Product service level

• Unrelated products • Product selling method

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

Factors to evaluate for making a merchandise mix

Product line potential profitability Brands role

• Direct and indirect contribution to profitability
• Calculations of gross margin percentage and
money
• How brands can distinguish a retailer
from competitors
• How brands can build store loyalty
• Private brands/ local brands.
International brands

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

Factors to evaluate for making a merchandise mix

Market appropriateness Product lifecycle

• Stage of the product to determine future sales
• New product introductions
potential
• trends and gap
• Number of products offered at different
• How well product matches consumption patterns stages
of targeted consumers

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

Factors to evaluate for making a merchandise mix

• Fashion / core

• Margins

• Availability of the product to competitors

• Availability and reliability of suppliers

RETAIL MERCHANDISING
Elements of Retail Merchandising Mix and Planning

While observing merchandise mix at a fashion retailers

• What is the line of merchandise?

• Various Brands in a category

• Product

• Sizes

• Colours/ options

• Fabric

• Styles

• Price points

RETAIL MERCHANDISING