Retail Product. Management. Buying and. Merchandising. Third edition. 13 Routledge Taylor & Francis Croup LONDON AND NEW YORK

Transcription

1 Retail Product Management Buying and Merchandising Third edition 13 Routledge Taylor & Francis Croup LONDON AND NEW YORK

2 Contents List of figures List of tables List of boxes List of case studies Introduction Chapter map xiii xv xvii xix xxi xxiv Parti UNDERSTANDING RETAIL PRODUCT MANAGEMENT 1 1 INTRODUCTION TO RETAIL PRODUCT MANAGEMENT: SCOPE AND CONCEPTS 3 Introduction 3 Products 4 A product defined 4 Retail product sectors 5 The role of product management in retailing 6 The Strategie role of product management 8 The Strategie role ofthe product ränge 10 Retail positioning 10 Price positioning 17 The scope of retail product management 17 Retail product management: an evolving diseipiine 20 International retail product management 22 Summary 22 Questions 24 References and further reading 24 V

3 CONTENTS 2 RETAIL PRODUCT MANAGEMENT: PROCESS AND PEOPLE 26 Introduction 26 Retail buying organizations 27 The retail product management process: a traditionell view 27 Complexity of buying tasks 29 Limitations ofthe traditionell buying process models 30 Consumer-Ied approaches to retail product management 31 Centralized retail buying organizations 34 Decentralized buying 37 Buying Organization managerial rotes 37 Additional buying decision-makers 41 Brand direction 43 Buying committees and panels 44 Desirable attributes in retail product managers 47 Buying groups 49 Organization for international product management 50 Summary 52 Questions 53 References and further reading 54 3 CATEGORY MANAGEMENT 56 Introduction 56 Category management 57 Category management as a philosophy 58 Category Champions 58 The category management process 58 Product category life cycles 62 Establish the Performance measures for the category 64 Formuiate o strategy for the category 65 The category mix 65 Category management as an organizational concept 66 Category management and efficient consumer response (ECR) 67 Category management limitations 71 Summary 74 Questions 76 References and further reading 77 Part II THE RETAIL PRODUCT MANAGEMENT PROCESS: FROM COIMCEPTION TO DELIVERY 79 4 PRODUCT RANGE FLANNING AND SELECTION Introduction 81 The product ränge vi

4 The assortment plan (model stock list) 83 Considerationsfor the assortment plan 85 Products and consumers 87 The influence ofconsumer trends on the retail off er 88 International markets 92 New product development 94 The product selection process 95 Product selection criteria 96 The product specification 102 Brand 103 Retailer branding 103 Concessions 105 Price/value as a product feature 106 Monitoring the product ränge 106 The product ränge review 107 Tracking product/market trends 107 Summary 109 Exercise: Retailer branding 109 Questions 111 References and further reading 111 MAIMAGING THE SUPPLY BASE Introduction 114 Types of suppüer 115 The supplier search 118 'Glocal' sourcing 121 The choice of supplier 124 Supplier development 126 Supplier evaluation and monitoring 127 Retailer-supplier relationship development 128 The interaction approach 129 Stages of development in retailer-supplier relationships 131 Supply chain Integration 133 Summary 135 Questions 135 References and further reading 136 PRODUCT QUANTITY DECISIONS AND STOCK MANAGEMENT Introduction 138 Stock management 138 Stock management for staple items 139 Stock management by periodic review 140 The economic order quantity (EOQ) 141

5 CONTENTS The needfor stock investment 144 Stock management systems 145 Sales forecasting 146 The involvement ofbranch stores in determining quantities 151 Forecasting at distribution centre level 151 The merchandise budget plan 152 Summary 156 Exercise: Forecasting the sales ofa staple product 157 Questions 158 References and further reading MANAGIIMGTHE RESPONSETO SALES 161 Introduction 161 Response 162 Sales-based ordering (SBO) 162 Automatic replenishment 163 Efficient consumer response (ECR) and quick response 164 Supplier involvement in responsive replenishment systems 164 Collaborative planning forecasting and replenishment (CPFR) 165 Drawbacks of sales-responsive replenishment systems 166 Supplier-managed inventory 167 Strategie response to sales 168 Summary 169 Questions 171 References and further reading 171 Part III THE RETAIL PRODUCT MANAGEMENT PROCESS: IMPLEMENTATION AND EVALUATION ALLOCATING RETAIL SPACE TO PRODUCTS 175 Introduction 175 Space management 176 The space management process 176 Stage 1: Measuring retail space 176 Stage 2: Dividing the space into selling areas 177 Stage 3: Determining the layout and deciding on product adjacencies 179 Stage 4: Allocating space to individual produets 182 Practical and customer considerations 187 Space allocation systems 189 Space allocation and category management 190 Store grading 191 Trial and error 192 viii

6 CONTENTS Space management for online retailers 193 Summary 193 Exercise: Maltmans 194 Questions 196 References and further reading RETAIL DESIGN 198 Introduction 198 Out/etdesign 199 Formuiating a störe design 199 Materials 200 Atmospherics 202 Lighting 204 Signage 204 Store design and the corporate image 205 The exterior design 206 Location 209 Store image 210 The retail brand across categories andformats 211 Lifestyle retailing 211 Planning retail designs 212 Flagship stores 213 The Strategie role of störe design 215 Online störe design 216 Summary 216 Questions 218 References and further reading VISUAL MERCHANDISING 220 Introduction 220 The scope of Visual merchandising 221 V/siva/ merchandising planning systems 221 Responsibility for visual merchandising within the retail strueture 223 Wsua/ merchandising as a support for a positioning strategy 224 Fixtures andfittings 224 Product presentation 228 Store layout 229 Displays 231 Window displays 237 Online Visual merchandising 238 Summary 239 Questions 240 References and further reading 240 ix

7 CONTENTS 11 COMMUNICATING THE PRODUCT OFFER 242 Introduction 242 Retailer to customer communications 243 Retail communication Channels 244 Advertising 244 Product-specific promotional communications 248 Promotional product planning 249 Strategie product communications 250 Publicity 251 Personal communications 253 Communications through packaging 254 Integrating product-related communications 255 Internal communications 256 Retailer-supplier-related issues 257 Cooperative promotional campaigns 259 Evaluation of product-related communications 259 Summary 260 Questions 263 References and further reading EVALUATING RETAIL PRODUCT MANAGEMENT PERFORMANCE 265 Introduction 265 Product profit 265 Sa/es 266 Profitability 267 The impact of markdowns 269 Productivity 270 Shrinkage 271 Cost reduetion 272 Negotiation 272 Availability 274 Online availability 274 Qualitative Performance measures 275 Blending quantitative and qualitative measures 277 Summary 278 Exercise: Markdown analysis 278 Questions 279 References and further reading ETHICAL AND SUSTAINABLE RETAIL PRODUCT MANAGEMENT 281 Introduction 281 Ethical retailing 282 Ethical consumers 282 X

8 Index The retail product management processfor an ethical and sustainable product ränge 283 Planning a sustainable and ethical product ränge 284 Managing a sustainable supply base 287 Ethical issues in presenting and communicating the product 290 CSR reporting 292 Pricing 293 Summary 293 References and further reading 294