FASHION MERCHANDISING 2.01: 2...FASHION MERCHANDISING 2.01: DISTRIBUTION . ROLE OF DISTRIBUTION IN FASHION RETAILING Distribution is basically how things get from point A to point B In the marketing mix, it involves how and where products are offered to customers as well as how those products get there. What are some common routes for distribution in

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  • FASHION MERCHANDISING 2.01: DISTRIBUTION

  • ROLE OF DISTRIBUTION IN FASHION RETAILING

    Distribution is basically how things get from point A to point B

    In the marketing mix, it involves how and where products are offered to customers as well as how those products get there.

  • What are some common routes for distribution in fashion?

    Fabric supplier sells fabric directly to a fashion designer at a tradeshow.

    An apparel manufacturer might have salespeople who sell to department stores, discount chains, or other types of retailers.

    Sometimes apparel producers might sell directly to consumers in other ways, such as their own mail order catalogs or websites.

    Transportation must also be considered, such as moving the goods by train, plane, or truck. Companies use the most efficient method to get their products to the right locations.

  • Transportation

    Transportation must also be considered, such as moving the goods by train, plane, or truck. Companies use the most efficient method to get their products to the right locations.

  • Common Channels of Distribution

    Manufacturer Owned stores - Stores sell only items created by store brand.

    Ex: Michael Kors, Apple, Lululemon

    Independent fashion stores - Order merchandise from a variety of suppliers.

    Ex: Vestique, Alphabet Soup, Ivy & Leo, Francescas Collections,etc.

    Department stores - Will buy merchandise from a vareity of suppliers/brands but owns storage facilities to store items in.

    Ex: Belk owning a warehouse to store extra merchandise.

  • THE SOFT GOODS CHAIN

    The soft goods chain is the channel of distribution for apparel and home decorating textiles. It is also called the textile/apparel pipeline.

    It has three main segments that feed products beginning with raw materials all the way to finished items for consumers. Those segments are:

    Textile Segment

    Apparel Segment

    Retail Segment

  • Soft Goods Pipeline- contd

    The Textile segment includes all steps of producing a textile including:

    *fiber production

    *yarn production

    *fabric manufacturing done in textile mills

    * fabric finishing- bleaching, dyeing, printing , or applying special coatings to change to look feel, or performance of the textile (remember fabric finishes from unit 1? This is when they come into play)

  • Soft Goods Pipeline- contdThe Apparel Segment produces finished garments and accessories. The apparel must be designed, then manufactured. Almost all are mass produced in factories.

    Apparel sales involves selling the manufactured garments in large quantities to retail stores. This serves as the wholesale sales step.

    Most garments are sold and shipped directly from the manufacturers at a wholesale price, to retailers. Inexpensive accessories and small, non-fashion products do go through wholesalers, often referred to as resellers.

  • Soft Goods Pipeline- contd

    The Retail Segment sells the merchandise directly to consumers.

    Retailers buy in large quantities at wholesale prices and then mark up the goods in order to cover costs of heat, lights, taxes, sales help, and other expenses and then sell individual items to the consumer.

    The retail price also includes some profit for the retailer.

    Consumers are at the end of the soft goods chain, but satisfying their wants and needs is the objective of all the preceding companies in the pipeline.

  • Who are the main players in the process of distribution?

    Manufacturers- a person or company that makes goods for sale.

    Agents- Intermediaries who assist in the sale and/or promotion of goods and services but do not take title to them

    Wholesalers Organizations that purchase products from suppliers, such as manufacturers or other wholesalers, and in turn sell these to other resellers, such as retailers or other wholesalers.

    Retailers Organizations that sell products directly to final consumers.

  • INTERMEDIARY CHANNELS- more people involved

    Resellers- A wholesaler of inexpensive accessories and small non-fashion products. They distribute goods between and retailers or users.

    Franchisee-The person or group that owns a franchise business.

    Franchisor-The person or firm with the famous or established name used by franchisees.

    Consumers- People who buy and use finished products.

  • DIRECT DISTRIBUTION

    Allows the product to reach the intended final user without intermediaries. There are no other parties involved in the distribution process that take ownership of the product.

  • PROCESS OF DISTRIBUTION IN FASHION RETAILING

    Each layer of marketing intermediaries that performs some work in bringing the product to its final buyer is a "channel level".

  • Channel 1 contains two intermediary levels - a wholesaler and a retailer. A wholesaler typically buys and stores large quantities of several producers' goods and then breaks into the bulk deliveries to supply retailers with smaller quantities.

    Channel 2 contains one intermediary. In consumer markets, this is typically a retailer.

    Channel 3 is called a "direct-marketing" channel, since it has no intermediary levels. In this case the manufacturer sells directly to customers. An example of a direct marketing channel would be a factory outlet store.

  • STRATEGIES OF DISTRIBUTION IN FASHION RETAILING

    Place is not always a physical building such as a retail outlet or shop, but includes any means by which the product is made available to the customer. A business has to balance getting enough of its products to its target customers against the problems or costs of distributing them.

    For a premium or luxury brand, making the products too easily available might reduce the perceived value of the brand. (This illustrates the need to select carefully how the marketing mix is put together to match the product to the needs of the target market.)

  • STRATEGIES OF DISTRIBUTION IN FASHION RETAILING

    In intensive distribution, the producer's products are stocked in the majority of outlets. ex: Hanes socks, Burts Bees lipbalm, etc.

    In selective distribution, the producer relies on a few intermediaries to carry their product. ex: MAC makeup is available in select department stores

    In exclusive distribution, the producer selects only very few intermediaries. ex: Tiffany jewelry is ONLY available at Tiffany and Co. stores

  • FACTORS THAT IMPACT INVENTORY CONTROL IN FASHION RETAILING

    Finances- It costs money to keep products in stock and especially to keep extras in inventory!Cost of borrowing money to stock your

    inventory.Warehouse operations and transportation

    costs. Cost of gas

  • FACTORS THAT IMPACT INVENTORY CONTROL IN FASHION RETAILING

    GoalsSales goalsCustomer service objectivesFor example, if you promise same-day delivery,

    your inventory management must have the product on hand to meet customer demands.

    Offer discounts or sit on your inventory when shifts in consumer buying habits occur.

  • FACTORS THAT IMPACT INVENTORY CONTROL IN FASHION RETAILING

    ResponsibilityTo oversee your inventoryEnsure orders are placed appropriately and regular audits

    performed. Your primary overseeing duties are the only internal control you

    can count on. Employees typically don't have the same stake in your

    business as you do and may not keep a close eye on inventory. The most shrinkage occurs from employee theft, not customers

    shoplifting!

  • Extra Terms:Shrinkage: the difference between the inventory you should have (what is in the books) and your actual inventory

    Perpetual inventory: A system that automatically updates inventory when purchases are made.

    Ex: You have 10 purple t-shirts in the computer inventory. A customer buys one and as soon as that item is scanned and payed for, the computer adjusts to say you have 9 purple t-shirts in inventory.

  • FACTORS THAT IMPACT INVENTORY CONTROL IN FASHION RETAILING

    AvailabilityProduct suppliers who deliver poor-quality merchandise also

    can throw unexpected snags into your inventory supply chain. Understanding suppliers lead-time requirements can help you

    maintain sufficient inventory.