Have you ever faced problems planning your store and inventory in a way that sells? Well, one thing you might miss is the merchandise planning process. In-store planning and merchandising are the link between sales and marketing in the front and the supply chain in the back. The merchandising strategy should educate retailers on the four most important ‘W’s’:

What to sell

When to sell

Where to sell

Who to sell to

These four W’s are critical to sales, marketing, and the supply chain because retailers need to know them to balance a positive consumer experience, on-hand inventory, and the ability to meet future consumer needs promptly.

You need to add customer focus, the element created by the merchandise planning process. Sometimes it is more evident when it is absent; department stores, retailers, and suppliers of gigantic brands are increasingly at odds over promotions and significantly discounted prices. The reseller is willing to give discounts while the supplier is not, or vice versa. These conflicts between retailers and suppliers can be avoided if pricing is done based on strategic ways and through the merchandise planning process by keeping the sales channel and customer data in mind.

Let's take a look at the five strategies to help retailers succeed in Merchandise Planning Process:

Balance store inventory: keep it light and fast.

Inventory throttling is a constant theme at major department stores. Retailers use this strategy to prevent late-season discounts from reducing gross margins. Still, a lean inventory strategy increases the risk of lost sales revenue if goods are out of stock or shoppers misinterpret trends.

Balancing marketing needs and logistics costs through the merchandise planning process takes more work to strike as online competitors gobble up brick-and-mortar store sales. By keeping inventories low, retailers may be unable to maximize sales revenue to pay for their physical stores.

The company has been working to align its inventory with a sales strategy based on its own branded stores and other department stores. Major brands worldwide have tried to maintain and even strengthen their brand by holding small inventories and minimizing discounts. Burberry, one such example, saw sales growth in 2021 as part of its fight to be seen as an all-luxury company. The relationship between suppliers and stores is becoming more fragile as e-commerce captures a more significant share of sales, and disputes in the apparel world are intensifying as lean supply chains that companies fast fashion serve to push consumers towards lower-cost products. Here, the merchandise planning process plays a vital role in maintaining the fine balance between sales and inventory.

Balance Merchandising Volatility: External factors influence demand.

Wages, employment conditions, and climate, both environmental and social, are volatile factors that retailers must always consider and factor into their plans. Completely removing a sales footprint in a country the size of Russia will certainly impact retailer bottom lines, especially as the turmoil continues. Here, the merchandise planning process plays a role in telling the retailers how the environment around them has been and what can be done further to prevent wastage.

Balance fulfillment channels – keep it customer-centric.

Partly in response to coronavirus safety precautions, retailers are making it easier for shoppers to pick up online orders from brick-and-mortar stores. In-store pickup alleviates pain points for both retailers and their customers and attempts to turn the physical business into an edge over online competitors.

Inventory management for online and physical sales has been a significant challenge for retailers. As it becomes more common to use BOPIS, achieving this balance becomes more critical, and the requirement of the merchandise planning process increases.

Align with the supply chain: Collaborate with manufacturers on pricing.

Rising prices of raw materials such as metals, grains, and crude oil present a growing challenge for producers and distributors. In parallel with this struggle, shipping costs and product prices are also rising, leading to slack outlooks for some powerful consumer goods brands and leaving buyers with a higher bill.

As commodity price fluctuations affect retail prices, coordination with suppliers is essential to adjust costs to maintain profitability, even if consumers have to pay a little more.