Nonetheless, proposing product areas to be carried, selecting products and suppliers, and specifying order details are the key responsibilities of retail product managers and so these traditional models do provide a preliminary introduction to the retail product management process. A consumer-led approach makes a direct link between the manufacture and supply of product, and the demand patterns found in consumer markets, and therefore relies on close collaboration between product managers in both retailer and supplier organisations.
The diagrams in Figure 2. The boundaries of responsibility are clear and each department works discretely as part of a larger process. The advantage of this type of structure is that expertise is built within these various functions, but the main disadvantage is that department boundaries can become barriers, the experts become inward looking within these departments and an overview of the whole product management process is less easily achieved.
It is a collective responsibility to achieve this, but activities are co-ordinated by a product manager who maximises the performance of a particular group of products, referred to as a category. BOX 2. Founded in , the group now operates stores with a geographical spread from Exeter to Inverness. In the period to , Debenhams was owned by the Burton group, but the department store chain was de-merged from the specialist clothing retailers now trading under the name of the Arcadia Group to enable it to develop its own strategic direction.
The company entered the home shopping sector in with Debenhams Direct, followed by the launch of their transactional web site. With 13 per cent market share in the UK Debenhams are building an international presence with stores in 13 different countries. The central buying office for the stores is located behind their flagship store on Oxford Street in central London. The diversity and the volume of products sold in Debenhams makes it one of the largest buying offices in the UK with around people. Most of the buying departments conform to the structure shown in Figure 2.
The role of the buying team is to develop profitable product ranges that reflect current trends, which offer the Debenhams customer product choice at all times. The role involves supplier sourcing, negotiating costs, quality and quantities, and monitoring delivery schedules. The merchandise teams decide how many units of every single stock keeping unit will be sold throughout the branch network, and work closely with the buyers to ensure that need is satisfied by the supply base. The distribution team have the responsibility of ensuring that each store has the goods to satisfy the expected demand and generate profit.
Success in a highly pressurised environment, where new challenges emerge on a daily basis, relies on departmental teamwork. In employment terms, buying personnel usually account for the greatest number of people in any centralised retail operational area.
Figure 2. Centralised decision-making for product management offers a retail organisation many advantages. Sales data can be aggregated to improve forecasting. The quality level of the product offer is better controlled, for example by having a team of technologists and quality controllers who work centrally alongside buyers, and quality controllers who halt the progress of faulty products in a centralised warehousing operation. A more consistent product assortment is presented in order to reinforce the retail brand identity and support national promotions.
Retailer branded product development is cost-effective and consistency in cross-category sub-branding can be more easily achieved. The quality of buying and stock control decisions is consistent across outlets. Store personnel are freed from buying responsibilities, allowing them to concentrate on creating a high quality shopping experience for customers in the retail outlet.
Wills suggests that buying office structures are determined by sectoral differences. These roles are discussed in more detail later in the chapter. An open channel of communication between the central buying organisation and branch stores is key to the product management process. Feedback from customers via store personnel, store management and retail operations area management on the more and less successful aspects of the product range is vital if steps are going to be taken to rectify mistakes, or prevent the repetition of errors.
Sales information from the most sophisticated electronic point of sale system only tells product managers what has sold, and who has bought it. These systems do not give information on why something has not sold, so some mechanism for capturing qualitative data on the product range should be part of the product management process. Store, or even department managers may place orders, according to the sales pattern occurring within their outlet, within the parameters of a centrally determined product assortment.
This allows the outlets to respond to local variations in demand whilst maintaining a consistent corporate product offer. In some cases, however, the product itself requires a decentralised approach. Highly regional products, such as local newspapers or heritage gifts, must be sourced locally.
Retail Product Management: Buying and Merchandising
In this respect, store retailers have an advantage over non-store retailers like the large mail order companies, who, by the nature of their business, rely on a centralised approach to buying and distribution. Internet retailing on the other hand offers the potential for retailers to provide a wealth of tailored solutions to individuals in response to information that they build about the shopper and their purchasing habits. Buying director There may be more than one buying director in a retail organisation, but it is not likely to have more than one represented at main board level.
The multinational grocer J. Buying directors represent all aspects of the buying organisation within the retail company.
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Their position corresponds with that of a general merchandise manager within a US buying organisation, although a main board director would be equivalent to a vice-president. Buying directors oversee a large number, if not all, of the product areas, and are responsible for setting the overall aims of the product management teams within the company. This will be a similar role, primarily concerned with strategic product planning. Merchandise managers Merchandise managers are senior buying and merchandising personnel who oversee a division, or a number of interrelated buying departments.
One merchandise manager may oversee all of the ladieswear offer, including clothing accessories and footwear, whilst another might oversee all home furnishings, including furniture, floor coverings, soft furnishing, lighting, household accessories and gifts. Buying controllers Buying controllers are situated in the buying and merchandising management hierarchy between buyers and merchandise managers.
They usually oversee the buying and merchandising operations of a small number of departments. In the case of the smaller retailer, buyers might report directly to the merchandise director, removing both the controller and the merchandise manager from the hierarchy. Buyers may have operational control of the department, with the rest of the buying team reporting to them; however, in some organisations the responsibility for running the department is shared between a buyer or selector and a merchandiser or stock controller.
Buyers tend to be more concerned with the qualitative side of buying; they have to be aware of all the features of the product that bear upon its ability to give customer satisfaction and they must have an extensive knowledge of what is available within the product market for which they have responsibility.
Buyers need to be knowledgeable about consumer demand and trends related to their product area, and they often work closely with marketing teams on promotions. Merchandisers Merchandisers tend to be concerned with the quantitative aspects of buying, and are usually responsible for estimating sales, planning deliveries and distribution of the goods to stores. Occasionally, a merchandiser also has product selection responsibilities, depending on the use of the title within the organisation, and in some retailers merchandisers plan space allocations.
As the merchandise systems used in a buying department have grown in sophistication, so too has the role of the merchandiser; it is now seen as more strategic, with greater emphasis on issues like availability and customer focus. This can have the effect of pushing the buying role further into the area of design, product development and selection, with less control over range planning and direction.
Some organisations, such as Gap and Zara do not have buyers at all — relying on designers to develop products and merchandisers to edit the range Wills, Working as a team, buyers, designers, technologists and merchandisers ensure that product ranges are well styled, good quality and good value for money. The term merchandising in some retail organisations is interpreted slightly differently and relates to a role that is more concerned with displaying products than range planning.
Career Choices UK for example describes a merchandising role as follows: you will work closely with buyers and marketing to decide which products to sell and where and how to display them in the shop. You are responsible for creating attractive displays and placing products so customers can see them easily and are more inclined to buy them. You then produce a picture or map called a planogram, and send it to all stores for them to put into place.
In clothing and home furnishing sectors, where visual display is more creative, the role of visual merchandiser comes into its own see Chapter Here, the buyer— merchandiser dyad is abandoned in favour of a broader, cross-functional organisation, with more emphasis on teams than individual roles.
In effect they are a central retail manager for a small part of the total retail offer. Assistant buyers In large retail organisations, buyers, merchandisers and category managers are likely to have one or more assistants.
An assistant buyer, for example, plays a key role in the buying process, and may be solely responsible for some buying decisions. Assistants will have a full understanding of the workings of the department and will provide support to their team leader on the operational aspects of the department. In many cases an assistant is in training for a full buyership.
Assistant merchandisers play a similar role on the quantitative side of the buying process. Technologists and quality controllers Although most buying decisions are centred on the ability of a product to satisfy a customer need, at a price the customer is willing to pay, a retailer has to ensure that it meets its legal obligations with regard to the products it sells.
It also has to consider its long-term image in the eyes of the public. It is, therefore, necessary to ensure that a product conforms to legal standards, and provides value for money. A buyer is usually a marketing orientated person, who may need some advice when it comes to assessing certain product features and criteria.
Retail Product Management | Buying and Merchandising | Taylor & Francis Group
This is where a technologist can be a useful member of the product management team. The technologist will be up to date on product standards, manufacturing process innovations, raw material properties and so on. The quality of products such as Heinz baked beans or Philips lightbulbs is assured by the brand, and in such cases the manufacturer takes the responsibility for maintaining the trust in product quality of the customer.
For example,Tesco plc have an experimental kitchen whose staff work on new food products. Many fashion retailers have a team of designers, pattern cutters and sample machinists who make garment prototypes for their suppliers to copy. The role of the product developer is to maintain a flow of fresh ideas, which can be anything from a whole new range, to simple changes to existing products. Replacing plain lettuce with rocket and balsamic dressing as a salad ingredient is one small change that can add newness to a product.
This involves consulting relevant publications, and talking to suppliers and industry specialists. For Lucy, reading food magazines and cook books, attending cookery demonstrations and sampling food in a wide variety of eateries allow her to identify relevant product trends. Visiting 40 tapas bars in 5 days was the daunting prospect on a recent trip to research new sandwich filling ideas. Often she will be developing products for filling gaps in the market and meeting changing customer needs.
Packaging can have a major effect on sales.
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