fusion point research Marketing Research Reports

Marketing to Merchandising Leaders in Retail

Understanding Their Role

Merchandising is a retailer’s buying process. It consists of identifying consumer demands, finding suppliers, determining logistics, and considering costs and budget constraints. Most large retailers have a formal, designated purchasing department. Please note, merchandising, as a buying department should not be confused with visual merchandising, which focuses on the visual impact of merchandise displays within the store. Successful implementation of the merchandising buying process is vital to a retailer’s success, and it drives the company’s overall strategy.1

 

Accurate market information is crucial to merchandising. Knowing exactly what a customer needs or wants, and will pay, allows the merchandiser to find a supplier that balances quality, price, and value. Market data may be gathered from traditional sources as well as through social media, which allows a greater conversational dynamic between the retailer and their clients.2 Buyers must:

 

  • know their market position: high quality/price, medium quality/price, or lower quality/price.
  • fully understand all the costs associated with buying and stocking an item.
  • decide how many products to carry. Fewer products means lower costs, but also fewer buying opportunities for the consumer. The overall breadth of the product offering is called the product or assortment.
  • understand how products are packaged, not only for display but also shipment from the supplier. Improperly packaged items are subject to damage.3
  • clearly communicate to suppliers the retailer’s expectations and contractual requirements.4

 

Private brands, or store labeled brands, are growing in popularity with retailers because of their reduced costs, greater flexibility, and potential to engender store loyalty.5

“Buyers must thoroughly understand consumer and fashion trends and the right value for every product we sell. They have to be opportunistic and extremely flexible…. Becoming an outstanding buyer demands curiosity—and a lot of training.” - Carol Meyrowitz, CEO of TJX6

1 SBerman, Barry, and Joel R. Evans. Retail Management: A Strategic Approach 12th Ed. Edited by Pearson Education, Inc., Prentice Hall., 2013.

2 Ibid.

3 Ibid.

4 Raissen, Anthony. “Prospecting for Retailers – Looking for Golden Opportunities.” Response 22, no. 6 (2014): 50. EBSCOhost(95004032).

5 Berman, Barry, and Joel R. Evans. Retail Management….

6 Meyrowitz, Carol. “The CEO of TJX on How to Train First-Class Buyers.” Harvard Business Review 92, no. 5 (2014): 45 – 48. EBSCOhost(95639014).

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Merchandising is the buying process at a retail company. It is a vital function, and requires a huge amount of information, knowledge, flexibility and training to operate successfully.

fusion point research Marketing Research Reports
Merchandising is the buying process at a retail company. It is a vital function, and requires a huge amount of information, knowledge, flexibility and training to operate successfully.

  • know their market position: high quality/price, medium quality/price, or lower quality/price.
  • fully understand all the costs associated with buying and stocking an item.
  • decide how many products to carry. Fewer products means lower costs, but also fewer buying opportunities for the consumer. The overall breadth of the product offering is called the product or assortment.
  • understand how products are packaged, not only for display but also shipment from the supplier. Improperly packaged items are subject to damage.
  • clearly communicate to suppliers the retailer’s expectations and contractual requirements.