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Cheese and wine get better with age. Apparel and general merchandise do not. Unsold merchandise ties up cash, costs money to house, handle, keep clean and maintain in presentable shape. More important that that: unsold merchandise bores the hell out of your customers.

The merchandising process for retailers can be broken down into two distinctive processes:
  • The creative process, which involve the selection and presentation activities necessary to present exciting merchandise assortments in the store and:
  • The planning and evaluation process, which involves the analysis and understanding of the performance of that merchandise.

Today's competitive retail environment do not allow for many mistakes on either the selection and presentation side, or the planning and evaluation side of the merchandise function.

Both sides of merchandising need full time attention, but - and this is important - they need to be addressed separately.

Therefore, we are going to look beyond the store front, and into the back office, where the planning takes place. The last thing today's shoppers want to look at is more merchandise they don't want to buy.

How do retailers prevent this from happening?

Planning. By logically and methodically developing a systematic plan that produces results and keeps customers coming back for more.

Scientific planning and evaluations of merchandise performance helps keep customers in three key ways:
  • 1. By eliminating merchandise that isn't performing
  • 2. By scaling back categories where demand is slipping and
  • 3. by preventing the repetition of mistakes.

This allows retailers to focus on best-selling items, expand or introduce hot categories and test new items to replace dead or dying ones. Satisfied customers mean a higher margin on the same volume of merchandise, a reduction of handling costs at the store level and an extended service life in the number of stores supported by the existing distribution facility.

And when customers are satisfied, everyone wins. The creative people are happy because the store looks good. The planners are happy because the numbers look good. The shareholders are happy because business is good. What more could a retailer want?

A scientific approach to inventory management makes sense. It provides retailers with an ongoing opportunity to continually strive to put their best foot forward.