First of all let me explain myself when I say ‘range planning’. Some may think this is planning a range, putting all the details on a worksheet of some kind (many of which retailers refer to as ‘line details’), putting all the products together, showing them to the people that matter, and then getting them signed off.
Well, yes, I do mean that, but actually it starts way before that. The role of all of us who are employed in any business is to make the business money. Yes we are there in most part because we thoroughly believe in the products we are selling and believe that customers need to treat themselves once in a while. However ultimately we need to make the business make a profit.
To be able to do that, we need to make sure that when we are given the initial targets from Finance that the targets we set ourselves are thoroughly thought through and that we build the blocks by clearly understanding how we can achieve them by understanding where we went wrong last year, what opportunities we have, if we are opening new stores and what they are amongst a whole host of things.
In this article, I concentrate on the first part of that planning process: Building Blocks.
When sitting initial targets for your team, these are the first port of call and they really need to make sure they capture everything, mainly what you have learnt or could predict could affect you in the future.
Here are my ‘Go to’ Building Blocks to think about, I break them in 2 parts, Learning from Last year and the opportunities for the following year, here I feature the first part:
Learning from LY:
SALE AND PROMOS
1. We need to work out whether we are going to do the same amount of Permanent markdown activity first, questions to consider:
a. How many official ‘Sale’s’ are we going to have NY? Are they going to last the same amount of time? If you’re a seasonal based business, does the seasonal calendar show when for example Easter is falling and if it is longer or shorter NY? In my last business I introduced a ‘Mini’ Sale at the end of Back to School so that we could reduce the amount of stock we had before we launched our Christmas assortment which increased the sales number for that year. We made sure this was on the building blocks when we planned it.
b. Do you want to reduce your promotional activity next year? If overall you do want to, then a negative number has to come into play here. We have to be realistic that reduced markdown activity will mean less sales (but the gain is in the profit here). However you could see more potential by driving the retail so there could be more sales
2. Coming from a heavily seasonal business, things moved around every year so nothing really was ever constant (although Christmas was always the 25th of December!).
a. Will your launch dates be the same? Will they impact another seasonal event?
b. Will the length of your seasonal events be the same?
c. What about the day the seasonal event falls under? Do you have more potential for sales if it’s later in the week? What does that mean to your earlier sales
d. So much to think about right?!
1. Coming from merchandising I would love to say everything I ever bought came in on time…but unfortunately life doesn’t work like that! Therefore we need to make sure we account for the losses we made and what we could make next year:
a. Continuity stock which didn’t come when it was meant to – misforecasts, boats being held up, supplier issues (which really need to be costed back to the supplier)
b. New stock – did all the new lines arrive in the week they were meant to? Did they miss their first few weeks at the front of the store? Did stock come in, sell through, you loved it and want to bring it back next season?
c. Do the maths, these numbers add up!
THE UNDERPERFORMANCE OF SPECIFIC PRODUCT
4. This is the big one and where the numbers here really make the difference. Its important to understand why you made significant losses LY on your categories, they could be a whole host of issues:
a. You had a design that came in, you bought lots of it, and the customers just didn’t respond. The natural answer is maybe say you bought too much, but you bought that to both agreed projections. So next year you are going to maybe go back to something a bit more safe or have learnt what they didn’t like about it and change it around – always try and understand the underperformance by really interrogating the offer (colours/designs/scales/timings of launches etc.) – or was it the price point? Was the retail too high? Did you change the price and it just didn’t reflect in the unit sales?
b. Is it a declining category and losses are going to continue? (Remember where there is a loss there is an opportunity!)
c. Is it your continuity mix vs. your new lines mix? Have you seen a significant shift? Is there potential to capture it next year?
d. Take it all on board, all the little things matter!
So that’s about half of my building blocks to start with! There is so much to think about and you really need to make sure both as Buyers and Merchandisers you really understand what has happened so you can understand you can drive your numbers for next year.
I offer a number of services, which can help your business incorporate the above:
· Building Range Planning processes/packs from Top down (integrating with Finance to designing team user need spreadsheets)
· Training sessions with regards to getting the best out of your financial target planning, incorporating some of the above
· Offering packs featuring my own knowledge and advice with or without the training sessions
Please contact me at email@example.com for further details
If you would also like the rest of this article please email me!