The Art of Retail Buying E-Book

Marie-Louise Jacobsen

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 445

Veröffentlichungsjahr: 2011

Beschreibung

Buying for retail is a demanding and challenging job that requires a creative flair, a strong awareness of fashion trends, life trends as well as good interpersonal and team working skills. Buyers and merchandisers have to ensure that the right merchandise is being sent to the right stores, at the right time, in the right quantities. This takes a blend of forward planning and rapid response to consumer demands. In combination with the other areas of the business, success comes from maximizing profit, which is achieved through anticipating customer needs and responding rapidly to immediate issues. It involves complex data analysis, liaison with the stores operation teams and balancing store stock levels. To succeed as a professional buyer, you will need strong analytical and numerical skills, an interest and understanding of consumer demands and strong commercial awareness. You also need to have an ability to understand and prioritize issues quickly and efficiently. Progression into the Merchandising function also involves the ability to manage change. The better equipped you are in your buying function the better you will be able to adapt to these changes. The best change of all is to graduate from a good buyer to an outstanding one! To handle the complexity of data and to enable you to contribute effectively in the critical role of a buyer, you need the right skill-sets and a right mind-set. Both of which can be learned in The Art of Retail Buying. This easy to read guide is written in a concise & pictorial style with colorful images that enables you to follow step-by-step each function of a buyer. The Art of Retail Buying will inspire you, motivate you and encourage you towards merchandising excellence!

Leseprobe

Contents

Dedication

Acknowledgments

Introduction

Chapter 1: Retail Formats

What it Takes

Retail Formats

Buyers’ Work Activities

Chapter 2: Qualifications-Qualities—Abilities

Requirements for a Buying Career

The 12 Qualifications-Qualities-Abilities Required for a Buying Career

Retail Recruitment Ads

Retail Job Searches

Chapter 3: The Buyer’s Roles

Why Become a Buyer?

Buyers and Accountability

Buying and Merchandising

Lateral Thinking vs. Problem Solving

Chapter 4: Management Expectations

How Management Evaluates Buyers

Expectation Overview

Productivity Measures

Performance Beyond Your Stores

Chapter 5: Retail Math

Selling Price, Gross Margin and Mark-up

Discounts on Listed Cost Price

Sales Tax

More On Mark-Ups

Calculation Clarification

Yet More on Mark-up

Find Your Retail Price

Find Your Cost Price

Cumulative Departmental Mark-Up

Average Departmental Mark-up

Overall Mark-Up

What is Your Factor?

Calculating Gross Margin

Mark-Downs

Discounts

Weeks of Stock on Hand

Local Consignment and Local Outright vs. Indent Margins

Merchandise Replenishment Procedures

Chapter 6: Budgeting

Buyers’ Planning

Budgets and Forecasts

Budget Components

Budgeting Examples

Department Store Budgets

Family-Tree Planner

Seasonal Planning

Sales Projection

Stock Turn

Mark-Downs

Open-To-Buy (OTB) Plan

Open-To-Buy

Chapter 7: Assortment Planning

Assortment Planning

Planning By Product

Planning With Systems

Ten Steps to Assortment Planning: Applicable to Fashion Garments and Accessories, Household, Bed Linen and Home

Assortment Planning: General Merchandise

Common Sense Coupled With Innovation

Chapter 8: Anticipating Consumer Trends

A Success Story

The Battle of the Camps

Creating a Winning Culture

Consumers and Their Buying Power

Demographic Analysis

Consumer Classifications

Spoilt for Choice

Chapter 9: Forecasting Customer Demands

Anticipating Consumer Demand

Consumers’ Mindsets

The Strategy Clock

Competitive Advantage

Strategic Gap Analysis

Gap Analysis as a Marketing Tool

Tactical Gap Analysis

Swot Analysis

Mental Preparation

Chapter 10: Central Buying

Buying for Branches

Visual Merchandise Catalogs (VMC)

Central Buying Systems

Systems and Procedures

Impact of Computer Technology

The Buyer-Computer Relationship

Determining OOS Losses

Potential Fixes for Out-Of-Stock Situations

Chapter 11: The True Essence of Buying

Buying for Your Customers

Buying Considerations

Shopping Vendor Lines

Selecting New Items

Factors Influencing Buying Decisions

On Time, Every Time

Backing Winners

Types of Suppliers

Choosing a Vendor

Overseas Buying Trips

Buying and Selection Factors

Narrowing the Search

Ask Questions

Seeking New Trends Abroad

Reporting on Buying Trips

Stock Control

Chapter 12: Buying Merchandise

Choosing Products to Sell

How to Choose the Right Merchandise

Fabric Qualities

Buying Bed Linen

Chapter 13: Brand Strategy

What Makes a Brand?

Twelve Steps to Organizing and Managing a Brand

Naming Your Brand

Private Brands and Why They Matter

Product Development

Creating the Concept

Understanding the Product Lifecycle

Sales Lifecycle

Profit Cycle Profile

Chapter 14: Managing Suppliers

Selection Criteria

Using Performance Information

Chapter 15: Negotiation

What is Good Negotiation?

Eight Golden Rules of Negotiation

Negotiation In Retail

Pitfalls to Avoid

Chapter 16: Retail Shrink: The Bare Truth

Internal Theft

Background Checks

Preventing Merchandise Theft

Stockrooms

Unauthorized Mark-Downs

Receiving and Shipping

Warehouses

Theft of Cash

Integrity Shopping

Refunding

Cashiers

Undercover Investigation

Keeping a Lid on Loss

Miscellaneous Guidelines for Cashiers

Refund Operators

The Role of the Buyer in Preventing Loss

Successful Retailing Formula

Chapter 17: Leading by Example

Promoting Your Merchandise

Other Duties

Aligning Your Goals With the Company’s

Chapter 18: Business Communication

Buyers’ Communication Tools

Ten Steps to Writing Reports

Writing Style

Content and Structure

Sales Progress Reports

Multiple-Store Reporting

Business Expansion Proposals

Mind-Mapping

Spoken Communication

Conclusion

Appendix 1: International Trade Fairs

Appendix 2: Common Terms from the World of Fashion

Appendix 3: Catalog of Colors

Appendix 4: Common Shipping Terms

Glossary

Index

Copyright © 2009 by John Wiley & Sons (Asia) Pte. Ltd.

Published in 2009 by John Wiley & Sons (Asia) Pte. Ltd.

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Photos from © Getty Images and Leng Peng® Fashion Book Centre

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Library of Congress Cataloging-in-Publication Data

ISBN: 978-0-470-82322-4

Dedication

To Stephen Wayne Johnson, my husband, my best friend and my hero

Special Thanks

Patrick Chai – Eut Marketing

Leng Peng® Fashion Book Centre

Arthur Yen

Kelvin Quek – Goldlion

Deirdre Ball

To my friends Arthur, Adela, Doy, Aileen, Franco, GK, Jana, Kelvin, Patrick, Vish and Yoka: no formal introduction needed; you are my best.

To my husband Steve, who believes that books and friends should be few but good. Thanks for believing in and supporting this project.

To all the buyers, assistant buyers, merchandise managers, sales managers and dedicated sales staff with whom I have had the pleasure of working in the past 28 years: you have made me laugh, inspired and thrilled me, at times exasperated me but, most of all, imprinted wonderful memories that I will cherish always.

To my great friend Franco Guidotti, who shared with me his vast knowledge of Italian fashion, products, food and the Italian way of doing things. You have been a constant source of inspiration, and given me insights into design, sophistication and splendor.

As competition continues to escalate at a significant rate, retailers must utilize all their knowledge to keep pace with other merchants in the marketplace. Being able to forecast accurately the needs of their customers and satisfy them with the appropriate merchandise takes a great deal of experience and know-how. Perhaps more than anyone else in a retail organization, it is the buyers and merchandisers who are responsible for ensuring that the store’s merchandise mix has the appeal to turn browsers into shoppers.

Although the sophisticated technology available to retail organizations today is an enormous help to buyers and merchandisers, their task still requires a great deal of knowledge and hands-on experience.

This book enables readers to examine the role of buyers and merchandisers, the qualifications, qualities and abilities required for the job, and how their decisions affect the business. Buyers who want to be successful must understand the climate within which they work. This environment consists of numerous components such as customers, types of retailers, the strategic planning process and the organization within which the buyer operates.

At one time or another, you have probably heard someone say: “Retail isn’t rocket science. All you need to do is buy stuff and then sell it!” To the outsider, it may seem easy enough but those of us in the industry know better. Sure, the basic principles of buying can be learnt, particularly the general knowledge needed by all buyers in their day-to-day activities. But mastering the art of buying is something else.

What makes retail complex is that there are literally billions of buying options open to buyers. Take the approximately 195 countries in the world, multiply this by the number of manufacturers in each, and then multiply that by the number of items each makes just in that particular segment of the buyer’s business and it gives you a pretty good idea of the complexity involved.

The tricky part is to sift through all these offers to find the right items that suit the retailer’s customers. The task of selecting catalogs of merchandise the buyers anticipate will sell is only the first step. Then come the decisions of how much, in what colors, in what sizes, delivered in which months and placed in which locations, for all of these components to make a profit.

Retail is not for the faint-hearted. It takes a lot of hard work, dedication and the will to win customer loyalty. To gain and retain customers, you must first position yourself as the retailer of choice in the consumers’ minds. This can be achieved by having the right merchandise of the right quality at the right price in the right location at the right time. There has been much talk about giving customers excellent or outstanding service but, unfortunately, not enough emphasis has been given to the core of the retail business: its products.

Retailers will, no doubt, agree that buyers are required to understand and use quantitative analysis in their day-to-day decision-making. Statistics on business performance are linked to consumer-spending behaviors which, in turn, are linked to strategic processes in selecting merchandise that will drive people’s ability and willingness to buy.

Retail is BIG business. Worldwide retail sales are estimated to exceed US$7 trillion and 30% of these sales are generated by the top 200 largest retailers. So staying ahead of the game requires today’s retailers to be smarter in managing and controlling what goes on their shelves. It is essential for professional buyers to focus on their product selections, and ensure that these selections are products that will satisfy consumer expectations and demands. In essence, professional retail buying is about being able to anticipate consumer demands and create ideas that combine and combust into exciting products that fulfill the consumer’s desires.

The Art of Retail Buying shares with you some of the secrets of the trade, including how to build a range of products and why some products are selected over others. Whether you are currently working in the industry or are looking to become involved in buying, I hope this book will prove both inspirational and informative. Even old dogs can learn new tricks.

In the summer of 2006, I was approached by People Skills Asia to create a syllabus on retail buying for buyers in Asia. There was a need for a professional buying course applicable for Asian retailers that would tackle issues particular to the Asian region. People in the retail industry found that the courses available were too academic and theoretical for practical implementation.

What was needed was a course covering the how-to, the what-to and the when-to, with easy-to-understand material and case studies that would enhance their buying skills and facilitate the management of their daily activities.

From my 30 years of extensive retail experience—15 of which had been spent as General Manager Merchandising with one of Singapore’s leading retail groups—I understood only too well the many challenges facing retailers and it took very little convincing for me to become involved in the project.

Throughout my career, I have always tried to make enhancing people’s buying skills an enjoyable and rewarding task. So when I was asked to write a syllabus on retail buying, I felt I had much to contribute. Such was the success of the course, launched in Bangkok in the autumn of 2006, that I was prompted by many participants to turn the syllabus into a book because, they said, not all retail companies were willing to invest in training their buyers and many would benefit from having such a book at their disposal.

Retailers should recognize that without talented and knowledgeable buyers, they risk losing market share, customer loyalty and competitiveness—all of which translates into profit, or the loss of it. Training and enhancing buyers’ skills is a vital part of staying ahead.

Retail buying is a demanding job that requires a creative flair, a strong awareness of fashion and lifestyle trends, as well as good interpersonal and team-working skills. Buyers and merchandisers have to ensure that the right merchandise is being sent to the right stores, at the right time, in the right quantities. This takes a blend of forward planning and rapid response to consumer demands. In combination with the other areas of the business, success comes from maximizing profit, which is achieved through anticipating customer needs and responding rapidly to immediate issues. It involves complex data analysis, liaison with the store’s operation teams and balancing store stock levels.

To succeed as a professional buyer, you will need strong analytical and numerical skills, an interest and understanding of consumer demands and strong commercial awareness. A buyer also needs to have the ability to understand and prioritize issues quickly and this can be achieved through good time-management by tending to issues that have an impact on the business performance. Progression into the merchandising function also involves the ability to manage change. The better equipped you are in your buying function, the better you will be able to adapt to these changes: and the best change of all is to graduate from a good buyer to an excellent one!

As a norm, retail management will be expecting buyers to deliver higher year-after-year sales and profit projections, and it is not uncommon to hear buyers lamenting and wondering how they are going to match their management’s expectations. The answer lies in re-thinking and re-strategizing your buying plans, as in how and why certain products are being bought, and by reviewing your vendor portfolio and asking if all are performing to expectation. Once this is established, the next natural step is to apply the Pareto Rule of 80-20. This principle implies that 80% of your sales are usually generated by 20% of your vendors: as such, some of that percentage growth can be found in building on your top-performing vendors and replacing weaker ones. I call this “the art of knowing what to keep and what to grow,” or “the art of knowing what to keep and what to throw.”

Why do people buy a new cookbook? For some, it is to learn how to cook; for others, it’s to find better and more delicious ways to prepare food. Likewise, The Art of Retail Buying is meant for students aspiring to enter the retail industry and anyone in the industry looking for self-development, inspiration and growth.

Predicting consumer demands starts with understanding and responding to consumer trends. The prime objective of the buying function is to anticipate the needs and wants of customers by being ready to gratify their product desires, and this can only happen if you, the buyer, spend time on the selling floor interacting with your customers!

From the outset, a good buyer needs to be equipped with the right sets of tools. The skills required can be learned and/or improved at any time, and what better time than now to start expanding your proficiency.

Welcome to The Art of Retail Buying, your insider’s guide to the best practices from the retail industry.

What it Takes

Before we look at the various organizational structures within which buyers are called upon to operate, it might perhaps be useful to say a few words about the personal qualities and characteristics that contribute to making a good and successful buyer.

In my experience, anyone wanting to engage in a retail buying role should have a creative and extrovert personality, be a natural problem solver and be able to handle a high level of multi-tasking. Retail buyers must be able to understand and predict customers’ needs and the saleability of a wide selection of products based on cost, style, function and quality while, at the same time, comparing these to other similar products available in the market. This is a significant task because they must order items months ahead of time, which requires a great deal of calculated risk based on experience and, more often than not, on sheer gut feeling.

Buyers need to put aside personal tastes and preferences and focus solely on what they anticipate customers will buy, in what quantities and at what premium. In making these choices, they also have to do so within specific purchasing budgets. A great deal of self-confidence is needed. Buyers eventually become experts in the merchandise categories they are buying for. After an initial trial-and-error period, they come to know what to buy, how to buy and where to buy, narrowing down wide selections of resources and knowing the best places to buy.

A retail buyer works in a dynamic but sometimes stressful atmosphere where decisions are made hourly. There can also be long and irregular hours, especially during holidays. Work is always fast-paced and competitive, and the buyer must quickly estimate the potential profitability of many products.