Download - BB retail capital
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BB retail capital
BBRC Merchandise Planning
Academy
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PlaceSizeLocationLayout
ProductStyle/FashionIntensityAssortment
ValuePriceQuality
CommunicationsPositionalPromotional
PeopleServiceKnowledgeClimate
System
LogisticsSuppliers
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ProductStyle/FashionIntensityAssortment
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ProductIntensityAssortment
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BB retail capital
4
The History of Merchandise
Planning.
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Data versus Opinion
• Stock counters
• Store based replenishment
• Information technology
• Nationalisation
• Data versus opinion
• Globalisation
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BB retail capital
6
Our Market/Philosophy
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What's our market and why?
• MAINSTREAM is the positioning: we must
have success in the main market
• Don’t chase fringe, styles, sizing, colours
- Bed jackets
- Dance
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Product Curve
Core Customer
(our market)
Fringe Fringe
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BB retail capital
Your Role
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Your Role
• Right product (P)
• Right place (MP + P)
• Right time (MP + P)
• Right quantities (MP)
You and your department are the data/facts.
The product team is the “fluffy/creativity”
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What role does your CEO play in merchandise
planning?
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• CEO is head of product
• Will be involved
• Must be involved
• Time allocation
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Head of product
Product Merchandise
planning
Responsible For:
• Product and quantity
• How we display it
• What costs what
• What we sell it for
• Listen to merchandise planning
Responsible for:
• Supporting product team with right brain and data based thinking
• Look forward (option
based)
• Create product
• Fashion
• Ongoing
• Promotional
• Core
• GMROM
• GMROI
• Planograms
• Store product layout
• Supplier relationships
• Negotiation – cost
• Retail pricing
• Timing
• Order placement and
tracking
• OTB compliance
• Analysis
• Stock balancing
• Allocations
• GMROM
• GMROI
• Store rankings
• Category ranking within
store ranking
• Look back(data based)
• Recommend markdowns
• Managing OTB
• Input and
recommendations into
buying decisions,
merchandising, timing, etc
• Sense check
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• Very trendy, generally more expensive than rest of assortment
• Image enhancer
• “One and done" (no replen: Sell-through or mark-down in short time
frame)
• Often bought to minimum order quantities
• Seasonal SKUs but less trendy than "fashion"
– product in store for 2-6 months
• Sell-through, but mark down to clear out at end of season
• Used to identify "new" anchors/basics
• Typically some replen
• Long-term styles
– carry through of >12 months, or cyclical
• Typically larger buys, with several Key Items
• Generally, largest profit share
• Sales driven by competitive pricing
• Replenishment and ensuring "never out of stock" critical
Basics
Fashion
Core
Assortment Mix
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Your Role
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• Measure, Measure, Measure - everything that matters
- People
- Product
• Analyse and act
• Min/max management - Monthly/Event
- Follow the life cycle of each SKU
- Up and down
- Cull/add fringe sizes
• Quarterly review of ongoing lines
• Quarterly review of store gradings
• Semi Annual Reviews (SARs)
• GMROM & GMROI
• Tail Management
• Replenishment - 96% in stock at store and SKU level
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Measure Your Performance
• Measure yours and the brand’s performance
- Sell through %
- First margin, final margin
- % aged inventory
- % in stock of basics (replenishment) at store
and SKU level
- GMROM
- GMROI
- Weeks cover/ stock turns
If you do not understand or are not getting this info,
please do something about it
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Know Your Stuff
• Know your business well, be on top of all
aspects of your role:
- Be interested
- Know the system well
- Know the quantity you sell by week
- Know what's on order and the quantity on
order
- Know the good, bad and ugly
These are all signs of your commitment and
confidence in your role
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Training. Teaching
• Who does the training?
• Who is responsible?
• What happens if we don’t train?
• Is this a shared responsibility
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What Do We Teach?
• Our business
• Our market
• Our customer
• The systems/processes
• Lead times
• Our culture
• Urgency
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Replenishment / Repeats
Exercise
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Topics we will cover in today’s session
✓ Formula versus outcome driven
✓ Our ‘pull’ system and what that means
✓ Allocations - how they work
✓ DNR (do not reorder) - methodology
✓ Stock smoothing/transferring
✓ MIN/MAX management
✓ Product lifestyles
✓ Markdowns - clearance store methodology
✓ Online
✓ Ongoing & Repeats
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Opening Truths
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• The bra business is unique
• Size range is unique
• Requires different disciplines
o Longer life
o Wide customer base
• Has a unique cost versus benefit threshold
• Must be a focus
o Merchandise planning
o Operational excellence
o Data integrity
• One SKU, one store, one sale at a time
o Then repeat in multiple stores
• One in one out
• Keep it simple
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Formula versus outcome driven
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▪ Issue we have to focus on: outcome
driven as opposed to formula driven
▪ See example on following slide
▪ Sweet spot between efficiency and
effectiveness
▪ Being outcome driven means having
stock
- In the right store
- In the right quantities
- ...and at the right time
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Briefs examples
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8 10 12 14 16
1 1 1 1 1
1 1 3 2 1
- 1 2 2 1
1 2 2 1 -
2 2 1 - -
Outcome drivenFormula driven
Ideal SOH
BRIEFS 10 – 12
units
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Pull vs Push
Discussion and commitment to our ‘pull’ system and what that means for Bras N
Things, when it's appropriate to push
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Go to RECAPS WEEK 36
• Line 600
• “New Lines” tab
• ITEM CODE: 11299304
CATEGORY DESCRIPTION COLOUR SEASON C.P. RRP STORESSALES U
LW SALES U
LW-1 SALES U
LW-2 SALES U
LW-3 SALES U
LW-4
SELL THRU
LW
TOTAL SELL
THRU SALES $ GM$ GM% Offer
Bottoms WISH BRAZ PINK 14W 1.76 14.99 182 335 243 114 13.8% $2,544 $1,941 76.3%
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• Allocations
Order allocation
Store grading
Store turnovers
Category grading within store grading
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Go to RECAPS WEEK 36
• “New Lines” tab
• Line 1109
• ITEM CODE: 217401
DEPARTMENT CATEGORY DESCRIPTION COLOURSEASO
N C.P. RRP STORESSALES U LW
SALES U LW-1
SALES U LW-2
SALES U LW-3
SALES U LW-4
SELL THRU
LW
TOTAL SELL
THRU SALES $ GM$ GM% TOTAL SALES
STORE SOH
Bras-Playboy Push UpELECTRIC BUNNY STN & LCE
BUNNY BRA BLACK 14W 11.38 64.99 176 204 212 116 6.3% $11,666 $9,344 80.1% 2,735
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Stock smoothing/transferring up
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Go to RECAPS WEEK 36
• “New Lines” tab
• Line 733
• ITEM CODE: 218801
DEPARTMENT CATEGORY DESCRIPTION COLOURSEASO
N C.P. RRP STORESSALES U
LW SALES U
LW-1 SALES U
LW-2 SALES U
LW-3 SALES U
LW-4
SELL THRU
LW
TOTAL SELL
THRU SALES $ GM$ GM% TOTAL SALES
STORE SOH
Bottoms-Playboy Mini-VSECRET SOCIETY STN & LCE
MINI-V WHITE 14W 5.94 24.99 137 73 6.5% $1,594 $1,160 72.8% 782
• The very last SKU of any style should be sold through the location with the highest probability of selling
• Review of the current process of stock smoothing
• Progressively discontinue product
• Min units to transfer
• Frequency and rhythm
• Do we stock smooth ongoing lines?
• Do we stock smooth ‘sell out’ lines?
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Product lifestyles – birth until death
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Methodology
• Trending - up and down
• Whole style vs stepped approach - by size and store gradings
• Add or delete sizes
• Timing/frequency
• Sign offs/ approvals
• Importantly, never zero model/Min Max fringe sizing or style until zero stock in DC
Go to RECAPS WEEK 36
• “ONGOINGS” tab
• Line 126
• ITEM CODE: 85601
DEPARTMENT CATEGORY DESCRIPTION COLOURSEASO
N C.P. RRP STORESSALES U
LW SALES U
LW-1 SALES U
LW-2 SALES U
LW-3 SALES U
LW-4
SELL THRU
LW
TOTAL SELL
THRU SALES $ GM$ GM% TOTAL SALES
Bras-Ongoing Contoured NINE TO FIVE MF CONT U/W BLACK ONG 7.45 49.99 192 101 127 122 142 133 1.7% $4,564 $3,830 83.9%
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Product lifestyles – birth until death
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Go to RECAPS WEEK 36
• “New Lines” tab
• Line 606
• ITEM CODE: 11299408
DEPARTMENT CATEGORY DESCRIPTION COLOURSEASO
N C.P. RRP STORESSALES U LW
SALES U LW-1
SALES U LW-2
SALES U LW-3
SALES U LW-4
SELL THRU
LW
TOTAL SELL
THRU SALES $ GM$ GM% TOTAL SALES
STORE SOH
Bottoms-Ongoing
Offer Bottoms WISH B/LEG PINK 14W 2.01 14.99 176 221 178 75 8.7% $1,662 $1,209 72.7% 2,325
Go to RECAPS WEEK 36
• “Ongoings” tab
• Line 5 & 35 & 121
• ITEM CODES: 10034401, 11273201 & 86902
DEPARTMENT CATEGORY DESCRIPTION COLOURSEASO
N C.P. RRP STORESSALES U
LW SALES U
LW-1 SALES U
LW-2 SALES U
LW-3 SALES U
LW-4
SELL THRU
LW
TOTAL SELL
THRU SALES $ GM$ GM%
Accesories Lingierie
Accessories REVEAL ADHESIVE LIFT STICKER NUDE (SKIN) ONG 1.74 9.99 190 1,142 1,105 1,040 1,117 1,140 7.2% 78.4% $10,278 $8,337 81.1%
Accesories Washbag LINGERIE PRINT BAGWHITE/PINK (2
TONE) ONG 0.97 5.99 51 3 11 24 51 75 2.3% 99.7% $17 $15 83.3%
Bras-Ongoing ContouredNINE TO FIVE FULL CUP MF CONT
U/W NUDE ONG 9.04 49.99 189 162 150 183 189 202 7.1% $7,313 $5,873 80.3%
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Markdowns
• Weeks cover is the only criteria to
determine the markdown price. Ignore
margin
• Clearance store methodology and
transferring
• Online clearance methodology and
transferring process
• Diligence is essential in sale periods for
stock smoothing
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General discussion
31
Go to RECAPS WEEK 36
• “ONGOINGS” tab
• Line 184 & 186
• ITEM CODE: 87902 & 82901
DEPARTMENT CATEGORY ITEM CODE DESCRIPTION COLOURSEASO
N C.P. RRP STORESSALES U
LW SALES U
LW-1 SALES U
LW-2 SALES U
LW-3 SALES U
LW-4
SELL THRU
LW
TOTAL SELL
THRU SALES $ GM$ GM%
Lingerie Extras-Ongoing Shapewear 87902
MICROFIBRE CUPLESS BODYSUIT BLACK ONG 9.12 39.99 190 37 30 27 31 19 2.1% $1,336 $1,072 80.3%
Lingerie Extras-Ongoing Shapewear 82901
MICROFIBRE HIGH WAIST LONG LEG BRF BLACK ONG 7.73 39.99 190 33 39 27 31 31 1.2% $1,199 $944 78.7%
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Ongoing and basics reorders
• Methodology
• Minimums
• Frequency
• Forecasting
• Random check
• Regular and often… don’t over order
See hand out example
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General
• Confirmation that online is the last place to
hold the very last SKU in a style and how
that occurs
• Ongoing: 95% in stock by location by SKU
• Grading - online AAA stands alone
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Replenishment
One question related to replenishment
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BB retail capital
Rules, Tips and Tricks
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• Best sellers must have lower weeks cover
• Ongoing styles need to run tighter cover
• If we're not getting lower weeks cover on best
sellers we're not forecasting properly
• Stock smoothing (transfers/reallocations)
Rules, Tips and Tricks
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On Fashion
Your first order is your best order:
repeats quite often fail
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Never, never, never stop replenishing basics
(ongoing):
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• Overspend
• Freeze on all orders
• No OTB
Basics are demand driven
Replenishment considerations are:• Sales rate
• Lead time
• Product cycle
• Being in stock
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All new products are seasonal and one off, until
sales and customers say otherwise
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There is not ‘a one size fits all’ methodology for
order forecasting, or replenishment
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DC cover “buffer” is a flawed
process - it is actually the ‘we
screwed up’ cover
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Address unacceptable MOQs –
smaller orders more frequent
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Rules, Tips and Tricks
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Holding fabric, raw
materials or forward
order commitments
almost always ends in
tears
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Don't think of an "all stores" and
"all product“ approach - one
at a time!
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Stores
Go visit stores – with a plan
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BB retail capital
Fast, Flat and Flexible
Structure
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Less is more
• It’s too easy to fall into the trap of more and
more product
• Depth and width of ranging - we tend to go
too wide and too deep
• Less is more
- in allocations
- in ranging
- in order quantities
• A golden rule - ”one in, one out”
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Less is more
We work our store space hard
• High stock intensity (width and depth)
• ‘Less is more’
How do these work together?
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Why we mostly have too much stock and rarely,
too little
• Afraid to give something up
• Hang on to the last
• If we put in more options, we sell more
• Never range or range extend to fill space or
fixtures
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Our Methodology
• Pull system versus push system
• Pull gives the best results for us
with few exceptions
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Margin Management
• It’s not the first margin that matters, it’s the final
margin
• There is no secret formula on margin policy
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Open to Buy
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Why we have Open to Buy:
• It tells us exactly how much we are allowed to
spend on product each month
• Is the key control to prevent us from being
overstocked or understocked
• It’s a blunt instrument that forces communication
between merchandise planners, buyers, finance
and the CEO
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Open To Buy
What is your role (merch planner) in open to
buy?
▪ Forecasting customer demand
▪ Forecasting replenishment of basics (ongoing)
▪ Make sure there is a %$ for when we find a
gold-vein or a ‘must have’
▪ Based on data, challenge the product team
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Open to Buy
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• Has failed on too many occasions
• Blunt instrument
• OTB is set around current trend % positive or negative
(not budget)
• CEO sign off/CFO audits
• 1% over trend is acceptable
• GM forecast secondary to sales, GM mustn’t be driver
in OTB, Sales is the primary metric
• Need to determine ideal stock holdings (build up and
decreases) by month fluctuations prior and post
Christmas etc
• Ongoing doesn’t have an OTB – it has a demand
requirement (sales rate and lead time) – demand
driven
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What is Data Integrity?
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• Data integrity is about how accurately the physical
product in our stores is reflected in our system
-Physical quantity of items versus system quantity
-Physical price of item versus system price
• Getting data integrity right is critical to sales
-Overstocks (mark downs)
-Missed sales
• Also important because future decisions/forecasts
are based on historic sales data – if this data is
wrong, we can end up making wrong decisions
• Fraud
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What is Data Integrity?
56
• Data Integrity is everything
- You have to be paranoid
- If you see a negative stock on hand, action MUST
be taken
• Tending the garden - keep cleaning it up
• We need to be part of the solution - issues are
inevitable, it’s ongoing, correct it and stay positive
• Everything must go through the system
- No paper
- No workarounds
• Keep a tally/records
• Product hierarchy and descriptions need to be
accurate
• Our data is to be perfect
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BB retail capital
Sale and Markdown
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Sale and markdown
Clearing our product and quantity mistakes
• It is never an exact science but we can always do better
• Your first markdown is the best markdown
• The numbers never lie
- No emotion
- A dog is a dog
• Weeks cover drives your markdown, nothing else
- Margin does not
- Hopes and wishes do not
- Price pointing does not
• Once a week
• Use similar data from previous sales to determine what
will happen – proactive learning not reactive – but don’t
over think it!58
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Sale and Markdown
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When do you take second
markdowns?
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Rules, Tips and tricks
• IOP
• What is its purpose?
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ONE QUESTION
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