How to Plan Your Merchandise Buys
Effectively planning your merchandise buys will have a dramatic impact on your customer service levels, fill rates and inventory management.
Although there are many approaches to planning buys, I’ll offer an overview of the one I’ve used most successfully in my many years in the catalog industry. The process isn’t difficult, but it should be done with some consistency as you build your history from one timeline to the next.
Although we frequently talk about the catalog industry being “item-driven,” to plan effectively, step back and look at your business from a broader categorical point of view.
Start by defining the 10 to 12 product categories that govern the merchandising focus to your customers. If you have significantly more categories, your merchandise direction may be too broad, and you may not have adequately defined your expertise or niche to your customers.
If you have too few categories, you may not generate enough appeal to bring new customers to your offering.
Each category can have a number of sub-categories; however, my initial discussion will focus on the category level.
Keep the process simple to avoid analyzing yourself into paralysis trying to cover everything. Instead, rely on a few key metrics to trigger thresholds that warrant deeper analysis.
Rather than refer to a specific season, I prefer using a “horizon” perspective. “Season” tends to define a specific timeline, such as spring (January to June) or summer (July to September). Not every cataloger’s selling period coincides with the specific seasonality.
Once you’ve identified and defined your horizon, develop a simple spreadsheet using basic historical pieces of information to create an “assortment.” The analysis should be done at the category level for the horizon and then for each catalog mailing within the horizon/season.