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Learn End To End Merchandising Process

7 min read
Learn End To End Merchandising Process

Learn End To End Merchandising Process

Strategic Marketing

Original Idea ‐ Trend & Concept Research

The original idea or concept can come from many sources. In this process, the Design team conducts trend and concept research by shopping US and European markets and conducts market research through mediums such as WGSN, WWD and etc., including competitive landscape, consumer research, reviewing sales data, and brainstorming.

Consumer Research

In consumer research, consumer statistics and behavior are studied to understand the consumer, to anticipate his/her product needs. The consumer is the person who actually purchases the product at retail. Consumer statistics include their gender, age, household income, education level, profession, and interests. The design team then starts developing season line trend boards.

Sales Data Analysis & Retail Pricing

Sales data provide the actual sales performance of existing brands, product lines, and single products. It is a valuable tool to determine what future products should be. In some cases, Merchandising team will communicate with customers to identify best sellers and key items and feedback to the Design team.

Brand Development

The brand map allows you to see the competition in terms of their pricing and performance, and to identify the position of your brand. Brands can have more than one sub‐brand, sub‐brands can have more than one product line or collection, and collections can have more than one product. Each product has a unique function in the line. No two products should overlap. If two products have the same function, you create “dollar‐ trading”, asking the consumer to choose one (not both) and diluting your product mix.

Line Initiation

In-Line Initiation, the Design team starts the process of laying out season concept boards by utilizing buy samples and research materials. The design team puts together trend boards for showing to customers.

Launch Calendar

A launch calendar is a timing plan for product introduction. The launch calendar considers the consumers’ mindset at any point in the year, for example, what events are occurring in the market at the time of the planned launch? What holidays? What are his or her needs based on that are considered. Based on the launch calendar of the product, the Merchandising team usually creates a target Time & Action calendar for sampling and producing the product.

Product Development

Trend & Concept Alignment

After trends and concepts are identified and directed, Design team starts sketching and graphic art design of the product.

Sourcing & Vendor Compliance

Sourcing is the process to find a manufacturer from different means to identify their capability to supply the correct product for the customer. During the new vendor sourcing, LF will review vendor’s product range and physical facilities to ensure their capability on sampling, quoting and production quality can meet customer’s requirement. If new vendor is being selected, the merchandiser will raise factory evaluation (FE) request to the compliance team to perform factory audit and follow up according to LF and customer factory compliance requirement. It is recommended that the factory sourcing and vendor compliance process to be done as early as possible before the sample development.

Material Alignment & Sourcing

This refers to selecting and preparing the raw material for sampling. The fabric is selected from vendor matrix. Fabric mill creates sample yardage, trim supplier prepare trims samples. All these raw materials are sent to the manufacturer’s sample room to start sampling.

Tech Pack Creation

The product brief is also called ‘tech pack’, it is the document consists of the sketches and description of the product to be created or developed. Upon receipt of the product brief, merchandisers would send to the factory to start the sample development and price quotation process.

Sample Request & Review

In normal business practice, customer will require different types of samples for the new product or collection to perform different business purpose, such as proto review, sales, advertising etc. Further to the submission of samples to the customer, they will require a cost quotation for review based on their required trade terms. Upon receipt of the new samples, customer will counter check the samples according to their request (i.e. tech pack). This sample review process will include design, color, silhouette, workmanship, fitting, materials texture & quality etc.

Costing Request

Merchandisers will ask factories to quote price based on the prototype sample. If there are any approval comments on the sample approval, revised tech pack will be sent to factory to re‐quote the cost if applicable.

Fit Initiation

When customer approves the prototype sample, revised tech pack details will be worked out based on customer’s approval comments for fit sample creation.

Production & Delivery Logistics

Price Negotiation & Sell‐In/Order Confirmation After customer’s review of the prototype samples, they will select the styles they want to place order. Usually, the customer will review the prices and advise target prices for those selected styles to merchandising to negotiate the prices with vendors based on the order projection. Further to the price negotiation process, the customer will finalize their order confirmation. During order confirmation, customer will usually send styles, prices, quantities, colors, delivery dates & selected vendor information by e‐mails and followed with official Purchase Order (PO) issued to vendor.

Upon receipt of the official PO, merchandiser will check all the information on it and issue Placement. Memorandum/Sales Order to vendor.

Logistics team will check all details on customer’s L/C before accept it. If vendor requests L/C, merchandising will raise e‐LC request as per order details according to the system procedure.

Production Approval

After an order is confirmed, fabric mill and trims vendors will create lab‐dip, strike off and packaging for production approval. Merchandisers have to monitor the approval time lines in order to meet delivery dates.

Customer review lab‐dips, strike offs and trims samples against approved standards. They will advise comments / approval on both quality & color to vendor for bulk production to follow.

When the styles that targeted for production are confirmed, the product developers will determine the sizing and fit specifications and have trial garments made to verify the final production patterns and assembly instructions.

Factory create fit samples according to provided tech pack and sent fit samples to Spec Tech for review of fit, construction and aesthetics.

Any final adjustments in the pattern or size fit, or construction methods, must be made at this time. Every detail must be approved before production.

Customer Lab Testing

Merchandiser will review customer testing procedures and inform factory to submit fabric and samples to the assigned laboratory for testing. No shipment can be arranged without the satisfactory testing result unless with customer’s exceptional approval.

Production Initiation

Before the start of production, merchandisers will co‐ordinate the Pre‐Production visit with Technician, QA team, QC team & factory production team. The purpose is to preview the overall pre‐production setup, quality and workmanship so that appropriate improvement or correction could be made before bulk production. QA will follow up on factory corrections and in‐line inspections schedule.

Final Production & Quality Control

Factory will start the full swing of production once the pre‐production sample is approved. The top of production samples (TOPS) will be submitted for customer’s approval before final inspection / shipment.

Merchandiser will arrange Quality Control (QC) inspectors to perform in‐line and final inspection to closely monitor the production standard at factory. No shipment can be arranged without the passed testing result & final inspection report.

Shipping & Logistics

When the production is completed and passed LF and/or 3rd party inspection, the shipment will be arrangement by Logistics team accordingly to customer’s agreed ship mode. Correct shipping documents to be submitted by factory for Logistics team’s approval.

Timing and schedules are extremely important. Any slippage in production process or delay in shipment arrangement would eventually affect the product In‐store schedule that causes loss of sales. LF merchandisers will work with QA, QC team, Logistics team & vendor closely to ensure goods are ready on time for shipment.

In some cases, Logistics team can create logistics solutions to customers to save their transportation cost.

The Retail Experience

Product In‐store

When the production is completed, the product is delivered as per customer’s ship mode. Usually, the product goes first to the Distribution Center (DC) and then to the stores. The store managers are prepared to put it out on the selling floor immediately.

Visual Merchandising Design

Visual Merchandising is the activity of promoting the sale of goods, especially by their presentation in retail outlets. This includes combining products, environments, and spaces into a stimulating and engaging display to encourage the sale of a product or service. It is the art of implementing effective design ideas to increase store traffic and sales volume.

Visual Merchandising starts with the store building itself. The customer decides on the store design & store theme to reflect the products the store is going to sell and how to create a warm, friendly, and approachable atmosphere for its potential customers.

Visual Merchandising Display

Many elements can be used in creating Visual Merchandising displays, such as window display, fixtures, point‐of‐purchase display, product display, line/brand display & props. This includes color, lighting, space, product information, sensory inputs (such as smell, touch, and sound).

Promotional Support

Promotional Support is the activity of promoting the sales of goods to increase the sales volume. The promotion can be in different ways according to the seasonal strategy, such as “buy one get one free”.

“Gift with purchase”, “Purchase with Purchase” & “20% off for next item”.

Sales Training

Proper sales training is crucial for the success of any retail. The sales people in the store need to be experts about the products they are selling. This requires sales training by the Brand sales managements.

Marketing

Marketing at this stage focus on selling and promoting products to end‐consumers via different advertising media to enhance sales

Sales

The sales transaction is the final step for the product, but it is the beginning of creating the next exciting new product. Those sales results will be a fundamental component of the next strategic marketing plan.

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