Retail Planning and Execution – My Blog

Merchandise Hierarchy and its Relevance in Planning

Mukesh Menaria — Mon, 08 May 2023 08:20:55 +0000

We visit numerous stores daily and never encounter mismanagement while browsing for our favorite products. We see products placed at specific store locations due to the merchandise hierarchy. For example, you visit a clothing store searching for women’s mom-fit new jeans. The salesman will direct you to the department of women’s clothing. There you will observe categories and subcategories of products. There will be a jeans category, and subcategories will include mom-fit, slouchy, straight, and wide-legged jeans. Breaking products into categories and subcategories helps clients and helping staff locate the product without much hassle.

Merchandise Hierarchy Levels

The hierarchical system starts at the broadest level and becomes more specific as it shimmies down. The goal is to simplify shopping and invigorate the atmosphere of the store. Retailers, wholesale dealers, and manufacturers can benefit from merchandise hierarchy, and e-commerce businesses can organize their products in categories for the customers to access their desired products quickly.

During online shopping, you may encounter filters on the top of the website that allows you to narrow down the search result to your price range, color choices, promotions, cloth material, and much more. Generally, a merchandise hierarchy contains four to six levels depending on the brand’s requirements.

Level One: The Store

The store is the broadest and most general level of hierarchy. Supermarkets and retail stores, on the whole, lie under this category.

Level Two: Departments

In a store, various sections represent different products. In a supermarket, we observe different sections for dairy products, fresh produce, utensils, clothing, and more. These departments give us a general idea of what to expect in that section. The department comprises categories.

Level Three: Category

Under the children’s clothing department, different sections will represent jeans, shirts, dresses, jumpers, hats, etc.,

Level Four: Subcategory

There will not be a single type of jeans present. Thus, the brand will stack jeans having similar styles in the same section. This practice is not just applicable to jeans but all the products displayed in the store.

Level Five: Class

The division of products on the quality of the raw material and their intended purpose is class division. Some dresses on display are for everyday use, some formal, and some

semi-formal. This distribution comes under the level of class.

Level Six: Item

Specific numbers (SKUs) are assigned to individual items to keep track of their inventory. It is the most pinpointed tier of the hierarchy. The brand’s employees use SKUs to identify products.

E-commerce businesses also use the hierarchy levels to maintain their website. Division of products into six ranks saves the customers a lot of time.

Role of Merchandise Hierarchy in Planning

Merchandise hierarchy plays a vital role in the progress of retail and e-commerce businesses. The information provides valuable insights into customer trends and other

factors influencing businesses’ revenue generation. Listed below are some ways in which merchandising hierarchy supports business planning.

Assortment of Products

Often one product sells better than the other, even in the same category. Producing products that don’t market well will be futile, and the products will only be heavy on the pocket.

Analyzing the data obtained from merchandising hierarchy helps decide whether to restock a specific product.

Manage Inventory

It would be strenuous for brands to keep track of their stocks without a merchandise hierarchy. Division of products in categories helps keep an eye on stock levels. It helps avoid stockouts and overstocking and ultimately improves the inventory turnover rate.

Price Tiers

Price tiers allocate products into different segments depending on their quality and characteristics. This practice helps identify price sensitivity. Price sensitivity aids in appealing to customers from all financial classes.

Promotion and Marketing Campaigns

Data analysis obtained from merchandise hierarchy determines the success of a product. After getting the statistics, the marketing team can devise campaigns to target specific audiences and create optimized content for that segment.

Elevate In-store Experience

An organized store is a treat to sore eyes. Hierarchy management helps design a smooth store layout and visual merchandising displays. It also assists customers in finding their desired products with ease minimizing the chances of unnecessary scruffles.

Rhapsody Merchandising (RMS), Dubai-based retail and merchandising company, provides unparalleled services to various businesses in Dubai. It assists in retail planning and execution and market research and audit. Both these tasks are vital to successful in-store executions. The professionals at RMS analyze statistical data and formulate successful results. They know the importance of merchandising hierarchy in planning a brand’s future and take this task very seriously.

Excess Inventory Management

Mukesh Menaria — Sat, 04 Mar 2023 09:41:51 +0000

Excess inventory management can be termed as managing the dead stock such as goods and materials that has not been sold and that exceeds the demand of customers. Here will describe the implications behind the strategies of excess inventory management.

So does excess inventory management implies

Understanding a company’s stock mix and the various demands on that stock is the function of field inventory management, also commonly known as inventory management.

Why does Excess Inventory Exist

Excess in inventory can be due to many reasons revolving around the store. This disruption in the product cycle is broken down into categories like shipment delays, technical challenges, and other factors including consumer behavior and seasonal changes, etc. Shipment and technical challenges collectively contribute to 85 percent of dead inventory, and the rest 15 percent are through other abstains.

Consumer behavior plays a significant role when it comes to inventory excess. Marketing trends and seasonal changes influence a shift in sales habits. Industries dealing with rapidly moving consumer goods.

6 Ways to Manage Excess Inventory

Excess inventory is frequently brought on by underestimating customer demand in industries that deal with quickly moving consumer goods where demand is difficult to forecast, which causes businesses to overstock in slower-moving items.

Doesn’t matter how smooth your operation is, at some point in time your business will face the issue of surplus inventory. Instead of bleeding dry due to the inevitable value decline experienced by aging inventory, focus on preventing the damage caused by carrying costs. Following are some ways you can manage and keep a steady flow of inventory.

Through Returns and Refunds

Returns and Refunds are the best options for businesses with excess inventory. If a supplier is willing to provide a refund or suitable discount, it can narrow down the impact of the hit, however, you may still have to carry the cost of handling and transport, but it would be covered by the inventory that can still be used.

Change the Inventory to new items

Companies often repurpose scraps and leftovers of excess inventory to produce new products. Based on the scarps, the components or raw materials can be utilized for different production processes or facilities, so the cost of any necessary rework on the inventory has to be considered.

Selling it to Customers

Selling excess inventory can go two ways, you can either sell it to consumers or businesses. If looking to sell finished goods to distributors or companies directly, you might be successful in reaching out to them with a unique or special offer. For this you have to consider packaging your product at a reduced cost. However, if the target is simply selling it to consumers then the efforts are far less in comparison. By simply adding promotion tactics the cost can be recovered through consumer sales.

Trading with Industry Partners

Your competitors in the industry might just be your ticket to saving huge inventory loss. While managing the excess inventory, try engaging with the industry partners they might be short of what you need to sell. To top it off, they might have something you can trade with. Such a management strategy can help get the excess inventory in check and build relations in the industry that will help your stability.

Auction It

Auctioning it yourself is another way to manage the excess inventory. With a rising trend of digitization, there are websites now where stores sell their inventory. Nevertheless, this process requires staff and constancy and may not result in the complete sale of the leftover inventory.

Consign the products

Consigning the products to independent contractors will allow for maintaining ownership and getting the cuts of the sales, typically of 75/25 split. These consignments can be handled either virtually, enabling you to keep and ship products at times of sales, or through physical distributors that hold and delivers the products for you. If nothing goes as intended, simply liquidating the excess inventory will do the trick. In this, your goal is simply to get rid of it. A liquidator will purchase your possessions at a price that is agreed upon, and that will be the last you will have to deal with them.

Excess inventory management revolves around the balance of maximization of returns and saving on any additional staff time or resource investment. Handling this demands monitoring the stocks and disposal of surplus inventory all year round.

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Perishables Maintenance in Retail Merchandising

sukaina — Fri, 03 Mar 2023 08:22:38 +0000

Perishable maintenance in retail merchandising is basically utilizing techniques and strategies of retail merchandising to sell the limited shelf life products.

So what are actually perishable products?

The perishable definition generally revolves around the items in retail stores that have low shelf lives and have to be sold within a given period.

Perishable meaning the products that require special storing conditions for them to maintain their conditions, otherwise they will lose their market value.

Problems and issues with perishables

The issue with perishable goods is that such products tend to decrease in their market and sale value as time passes. With this deterioration the chances of inventory being lost also increase. Due to their short shelf life, perishable goods can only be bought, stocked, and sold by a company for a limited period before they lose their value.

Inventory of perishable goods must be set up in such a way that, it sells off its stock before it becomes unsaleable.

Retail Merchandising

Retail merchandising is a technique of marketing products in retail stores by utilizing strategies that encourage customers to purchase products from them. In smaller setups, these duties are performed by store owners themselves, however,

many retail companies invest in merchandising solutions to sell and market these products within a viable range.

The following are the activities that are involved in Retail Merchandising;

Market research to determine what products customers want
Purchasing goods to meet the demand of customers
Product placement in specific areas to attract customers’ attention
Creating in-store and window displays
Putting products together to make it easier for customers to shop
Making a visually compelling, perfectly clean store
Planning the store layout to provide a positive customer experience

Ways to utilize Retail Merchandising for maintenance of perishable items

Perishable maintenance in retail merchandising plays an essential part in the store’s marketing and sales plan. Effective methods of retail merchandising can contribute to these plans in the following ways.

Successful perishable maintenance contributes to the encouragement of customers to buy more items from the store. For example rotation of items from shelves in a way as to make them more visible to customers while maintaining their integrity.
If you are presenting your products in a way desirable and attractive to customers, then your marketing retail merchandising strategy needs an upgrade. Setting up shelves to be more prominent helps maintain perishable items by increasing their sales rate.
At the point of sale, 70% of purchases are impulsive. Retail merchandising has the potential to bring in new customers. Potential customers are more likely to enter a store if they see visually appealing window displays.
When arranging shelves, the thing that plays the most significant role for perishables is the placement of products. If it is easier for customers to find these products, they wouldn’t shift to some other brand or location. This perishable maintenance strategy also contributes to the loyalty of customers.

Tips for successful retail merchandising of perishable goods

Following are some tips that can help successfully implement a retail merchandising strategy at any retail store.

Getting Feedback

Feedback is proven to be an extremely effective way to observe trends in customers’ mindsets. With these, you can understand customers’ expectations and ratings on the in-store setups and placements. This feedback can also be utilized to make further changes and adjustments in the future.

Product Sampling

Depending upon your product category, you can let consumers test some samples of your product to increase interest and sales. For example, to entice customers, a grocery store might provide tasting samples of a new milk product.

Consider engaging all senses

When designing the layout, consider the engagement of all senses; sense, smell, taste, and sight. For instance, merchandisers often utilize attractive color schemes and arrangement patterns to attract consumers toward perishable products.

Track Strategies

Consider tracking each retail merchandising strategy to see how effective it is for perishable maintainability. This step will assist you in developing strategies for future merchandising.

Best retail merchandising companies in Dubai for perishable goods

Rhapsody Merchandising –One of the leading companies in Dubai, providing services in merchandising for 14 years. Their services involve offering tailored merchandising solutions for retail execution.

With specialization in product cut-ins, new store/remodeling, maintenance reports, data management, labeling, and product placement analyses, Rhapsody is truly one of the most trusted and versatile companies in Dubai to rely on for retail merchandising and perishable maintenance.

Their unique strategies and expert solutions through field managers and trained merchandisers deliver support and in-store services, as well as product execution and management.

Significance of utilizing a retail merchandising company for perishable maintenance

Hiring an experienced merchandising company that handles critical compartments has the potential of doubling the sale value for your stores. From the time a product is delivered to the store until a customer takes it off the shelf, merchandisers are in charge of everything that happens throughout the process. They monitor product availability and visual appeal in stores across their designated geographic area.

This improvement in the maintenance of perishables through retail merchandising will potentially limit the waste-product ratio and improve the overall sale.