Retail Shrinkage: A Significant Problem

A total of 100 retailers participated in the National Retail Federa­tion’s 2015 “National Retail Security Survey,” representing more than 20 retail market categories. The largest sample (24 percent) came from retailers seeing $1 billion to $2.49 billion in sales. “For some time we’ve been looking to compare where the shrinkage is coming from, and

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Predicting Retail Trends

Introduction Some predictions are a slam dunk. Retail will continue to be driven by technology. Science fiction is coming to life in the form of robotics and virtual reality. And the Internet will soon be embedded everywhere. Another truism: Change is exponen­tial in retail. Accepting that is the easy part. Trying to predict what’s

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Predictions of 2016 Retailing Trends

In looking ahead to 2016, experts were asked to predict whether 2016 would be a “sweet” year for retailers. Would a handful of winning ideas drive industry objectives for 2016? Or was the idea of trying to predict what was just ahead for the industry our version of December insanity? Economists seemed to agree

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Retail Merchandising Philosophy

A merchandising philosophy sets the guiding principles for all the merchandise decisions that a retailer makes. This encompasses every product decision, from what product lines to carry, to the shelf space allotted, to different products, to inventory turnover, to pricing. A retail merchandising philosophy can be product-based (using SKU proliferation data to find the

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Buying Retail Organization Formats and Processes

A merchandising plan cannot be properly devised unless the buying organization and its processes are well defined: Who is responsible for decisions? What are their tasks? Do they have sufficient authority? How does merchandising fit with overall operations? Figure 14-2 highlights the range of organizational attributes from which to choose. 1. Level of Formality

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Devising Retail Merchandise Plans

There are several factors to consider in devising merchandise plans, as discussed next. See Figure 14-5. 1. Forecasts Forecasts are projections of expected retail sales for given periods. They are the foundation of merchandise plans and include overall company projections, product category projections, item- by-item projections, and store-by-store projections (if a chain). Consider L.L.

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Retail Category Management

As noted in Chapter 2, category management is a merchandising technique that some firms— including supermarkets, drugstores, hardware stores, and general merchandise retailers—use to improve productivity. It is a way to manage a retail business that focuses on the performance of product category results rather than individual brands. It arranges product groupings into stra­tegic

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Retail Merchandising Software

One of the most significant advances in merchandise planning is the widespread availability of computer software that gives retailers an excellent support mechanism to systematically prepare forecasts, try various assortment scenarios, coordinate data for category management, and so forth. In an era when many retailers carry thousands of items, merchandising software is a part

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Implementing Retail Merchandise Plans

The implementation of merchandise plans comprises the eight sequential steps shown in Figure 15-1 and discussed next. Gathering Information After overall merchandising plans are set, more information about target market needs and pro­spective suppliers is required before buying or rebuying merchandise. In gathering data about the marketplace, a retailer has several possible sources. The

Logistics in Retailing

Logistics is the total process of planning, implementing, and coordinating the physical move­ment of merchandise from manufacturer (wholesaler) to retailer to customer in the most timely, effective, and cost-efficient manner possible. Logistics regards order processing and fulfillment, transportation, warehousing, customer service, and inventory management as interdependent func­tions in the value delivery chain. If a

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Inventory Management in Retailing

As part of its logistics efforts, a retailer utilizes inventory management to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, storing, displaying, and selling costs are kept in check. First, a retailer places an order based on a sales forecast or actual customer behavior. Both the number of items and their

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Inventory Valuation: The Cost and Retail Methods of Accounting

Retail inventory accounting systems can be complex because they entail a great deal of data (due to the number of items sold). A typical retailer’s dollar control system must provide such data as the sales and purchases made by that firm during a budget period, the value of beginning and ending inventory, markups and

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Retail Merchandise Forecasting and Budgeting: Dollar Control

As we noted earlier, dollar control entails planning and monitoring a firm’s inventory investment over time. Figure 16-2 shows the six-step dollar control process for merchandise forecasting and budgeting. This process should be followed sequentially since a change in one stage affects all the stages after it. If a sales forecast is too low,

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Retail Unit Control Systems

Unit control systems deal with quantities of merchandise in units rather than in dollars. Informa­tion typically reveals: Items selling well and those selling poorly Opportunities and problems in terms of price, color, style, size, and so on The quantity of goods on hand (if book inventory is used); minimizes overstocking and understocking An indication

Retail Financial Inventory Control: Integrating Dollar and Unit Concepts

Until now, we have discussed dollar and unit control separately. In practice, they are linked. A decision on how many units to buy is affected by dollar investments, inventory turnover, quan­tity discounts, warehousing and insurance costs, and so on. Three aspects of financial inventory control are covered next: stock turnover and gross margin return

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External Factors Affecting a Retail Price Strategy

Several factors have an impact on a retail pricing strategy, as shown in Figure 17-3. Sometimes, the factors have a minor effect. In other cases, they severely restrict a firm’s pricing options. 1. The Consumer and Retail Pricing Retailers should understand the price elasticity of demand—the sensitivity of customers to price changes in terms

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Developing a Retail Price Strategy

As Figure 17-4 shows, a retail price strategy has five steps: objectives, policy, strategy, imple­mentation, and adjustments. Pricing policies must be integrated with the total retail mix, which occurs in the second step. The process can be complex due to the often erratic nature of demand, the number of items carried, and the impact

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Buyer of Sports Equipment

Recently, a sporting-goods retail chain posted a job listing for the position of Buyer of Sports Equipment. The applicant cho­sen would work in Pittsburgh. Following is the position descrip­tion placed at the National Retail Federation Job Board. Pittsburgh has transformed itself into one of the best “made over towns,” evolving from steel to science,

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Adapting to the Internet of Things (IoT) in Retailing

In an era where customization and personalization are the oper­ative words in retailing, the challenge to build closer connec­tions with shoppers has never been greater. Ubiquitous Internet connectivity is driving radical transformation of a retail world whose epicenter of consumer intelligence, long entrenched in the front end and back office, has given rise to

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High Marks by Suppliers and Wholesalers for Retail Convenience Stores

On a broad scale, 2015 was an interesting year for the United States and, with the presidential election, 2016 promised to be every bit as exciting. The same can be said about the conve­nience store industry. Based on the results of an outlook survey conducted in early November 2015 by the National Associa­tion for

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