How entrepreneurs and mall owners can benefit from POP- UP retail concepts?

Physical shops aren’t dead as yet and they shall never perish, with time they shall evolve. The pop-up shop is a current trend which mall owners or Landlords cannot afford to ignore in the Middle Eastern markets. 

There is a saying that “Future belongs to those who embrace change with both open arms”.

My inspiration to write this article comes from my 5 years old son’s purchasing habits i.e. he immediately starts browsing for toy shops as soon as we enter any mall or shopping centre. 

I once told him that Toys R Us worldwide is closing to which he immediately replied that he shall now start shopping from smaller toy shops or discount centres & closure of giant Toy retailer would not hamper his love for toys.

This reinstates my understanding that “It does not matter how big or good you are, you can always be replaced”. With the closure retail toy store giant, there is a huge opportunity for smaller toy brands or suppliers/manufacturers to enter and do things in more digital savvy manner.

Pop-up retailing is such a trend that provides a platform for such small entrepreneurs to try and test the market with their products or services prior to entering an unknown territory. It’s a $50 Billion segment in the USA alone.

As per Retailscope research in 2016, 52% of the people surveyed believe that pop-up stores are an effective way of discovering new brands. It is also a way for young brands to physically meet their customers and to activate word-of-mouth promotion.

Even luxury brand Louis Vuitton, for example, has just opened its first pop-up store in Italy, the aim being to rejuvenate its image and test new retail places, in order to explore new possibilities. This confirms the effectiveness of Pop-up stores in modern retailing.

Advantages of Pop-up shops are:-

•         They create market buzz.
• 
  
•         Low risk as the overheads are limited.
• 
  
•         Helps in testing new retail environments.
• 
  
•         Help brands reach where their customers are.
• 
  
•         It provides extended reach to established brands for generating awareness and for introducing the idea of concept selling.

Advantages for Mall owners to encourage pop-up stores:

•        Drives newness to the mall by short-term leasing of pop-up stores.
• 
  
•         Mall participation in encouraging entrepreneurs and first-time retailers to try out the physical retailing.
• 
  
•         Driving a cultural change by bringing & creating an ecosystem for nurturing startup pools. You never know, this first-time retailer might end up as one of your permanent tenants and result in the creation of multi-million dollar segment.
• 
  
•        Optimum utilization of vacant stores or spaces to generate some revenue as well as combine it with mall’s CSR initiatives.

Case study: “Tell a story”- trailer bookstore on the move.

Brand want to tell its customers more about journey of a book. “Tell a story” has a very simple concept: a bookstore in a van, driving around Portugal to promote national literature all over the country.

Purpose: Brand wanted to defeat language barriers and allow the world to catch a glimpse of the wonderful tales of the Portuguese literature which were missed out because nobody translated them in English.

In this van, roaming the streets of Portugal, tourists will discover Portuguese classics translated into English, French, German, Italian and Spanish. “Tell a story” envisions books as a living soul, not meant to be tucked away in a lonely corner, but rather enrich the mind of human beings. 

Van “guests” can also buy pens and postcards to write their own stories.

Embracing technology: Van also features e-books and access to e-commerce sites wherein the customers can browse and download or place an order for the titles which are not available in the van.

I would be more than glad to discuss my learnings which I have acquired by closely following pop-up retailing with any of my retail fraternity member or entrepreneurs willing to enter into physical retailing in the Middle East market, thus helping my Retail sector to grow beyond boundaries.

I can be reached at riteshmohan@yahoo.com

Remember “For those who dare to dream, there is the whole new world to win”.

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in Middle East region. He specializes in Retail management, Product development and Brand management, Retail Operations, Sales Management and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

It’s time for Retail Renaissance and not Retail apocalypse!! - How mall owners can help their tenants?

The Retail apocalypse! - is the buzzword that I hear very often within my Retail fraternity & in Retail forums while talking to brand owners as well as landlords (mall developers).

Let me for a second give it a new dimension i.e. instead of calling apocalypse, let’s view it as an interesting times, a renaissance which is going to push both retailers and landlords to their limits to re-invent & re-engineer themselves for brighter future.

Albert Einstein once said, “Insanity is doing the same thing over & over again and expecting different results”.

This statement holds true in all kinds of businesses including retail and my article is my sincere attempt in pointing out as to how Landlords (mall owners) can utilize current retail challenges to their advantages

Few Main Challenges being faced by retail sector:

a)    E-commerce is posing a severe threat to mall’s footfalls resulting in overall traffic drop which reflects in category decline in spends.

b)   Competition from other malls as they try to lure tenants/brands with attractive rent free period options in order to retain tenants in their malls.

c)    Small retailers are shutting down, bigger ones are not expanding and new brands are being very cautious to enter the market in the current scenario. They prefer playing wait & watch a game.

d)    Striking a good merchandise mix balance in maintaining a good brand/tenant mix within the mall despite various brand’s shop closures.

As a basic premise to deal with any challenges is to have forward looking & positive mindset. Consider current scenario as Retail Renaissance i.e. the natural evolution of life and business. If stores can’t adapt to changing trends and technology, they will die of natural causes.

If malls fail to impart an exceptional customer experience which millennials desire then they would too fail. Oftentimes, you walk out of the stores empty-handed, frustrated, and feeling like you just wasted your time. These mass experiences with mediocre customer service are exactly what we are trying to get away from!

Instead, World is moving towards personalized experiences that are tailored to our every need.

How Landlords can help retailers/ brand owners?

a)    Collaborative partnership: Gone are days wherein landlord and tenants used to meet only at their annual day gatherings, today time demands them to become partners with their tenants and understand their problems by being brand’s partner in crime. Today mall’s manager needs to spend time with their tenants in their stores and understand the key issues pertaining low sales and low feet-ins. Become brand’s partner and consider yourself as an extension of Brand’s marketing team.

b)   Using data analytics to resolve tenants/brand’s issues: Most of the tenants are contractually bound by submitting their monthly sales to malls regularly, this data is generally discussed at the time of lease renewal or negotiation meetings.

How many landlords are using this information of daily, weekly sales to help their tenants to come up with a collaborative approach to resolve issues or take corrective action?

c)   Convergence is the buzzword & to play a pivotal role:

Historically the business model for the shopping centre industry has been to connect consumers and retailers physically. It was the retailers’ job to convince consumers to buy something. That model is shifting as a result of technology. 

The real estate owner or mall developer now has a large part to play in connecting the retailer and consumer both physically and digitally, and to do that mall would need a direct relationship with the consumer.

According to the Fung Business Intelligence Centre, “Showrooming” — the practice of researching a product in the store but buying it online — gets plenty of attention, but recent studies suggest it is far less common than “Web-rooming,” which entails researching a product online and then purchasing it in a store.

In fact, 90 percent of all U.S. retail sales still occur “within the four walls of a physical store,” according to a report by management consulting firm A.T. Kearney.

Case study: Westfield, London.

I would like to quote an example of Westfield London who has created a lounge for COLLECT PLUS, (mall’s initiative wherein the partnered tenants/brands offer their merchandise or discounts which are purchased by online customers and they come to collect the same from the mall.

Perfect example wherein Mall has partnered with brands and helping them reach out to online customers.

The current lounge of “CollectPlus” is the result of Westfield’s initiative which they undertook in 2011, by launching an online mall (and later a mobile app) with 150 stores, 3,000 brands, and over 1 million products.

Driven by the knowledge that 60 percent of the 1.1 billion annual shoppers in its malls use mobile devices, Westfield also created a research lab located in San Francisco, with the mission of finding technology applications and services that can further enhance the retail experience for both shoppers and retailers.

d) Adoption of technology to dominate Leadership stance:

Installing Beacons in the Common Area of Shopping centre: Most of the mall owners & shopping centres have embraced mobile apps, they can install beacons to identify hot and cold zones within their malls and share useful insights with their tenants to increase their sales.

The mall could also roll-out digital directories and concierge services that help mall visitors find their way around properties, locate deals and get information about events. Indeed, new technology is empowering mall owners and retailers like never before.

A prominent leading group, owning malls in KSA (Arabian centres, part of al hokair group) uses mobile phone tracking data through its apps to identify hot and cold spots in their malls and works closely with their tenants in those areas to improve their sales.

In the end, I would like to end my article with an extension of Brand promise which Majid Al Futtaim (leading mall developer) group makes and that is 

“Create a place that will become the centre of people’s lives”.

I think this sentence sums up the key message of the above article beautifully.

I would be more than happy to share my wisdom with any member of my retail fraternity who would like to seek my advice on their journey to make their retail venture more customer-centric. I can be reached at riteshmohan@yahoo.com.

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in Middle East region. He specializes in Retail management, Product development and Brand management, Retail Operations, Sales Management and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

How to become successful by changing your habits?

I am writing this new article from my personal experience wherein a close friend (I shall not disclose the name due to privacy issues) was made redundant from his company, having worked for over 10 years in the company. The situation and circumstances initially made him so nervous that he went into his dormant circle & isolation, never willing to come out & meet friends nor go out actively searching for a job. Basically, he had accepted his failure as his destiny.

This raised a question into my mind, do your habits and actions actually define your personality which in turn decides whether you are a fighter or loser, who is willing to give into the circumstances without even putting a tough fight.

 Thankfully a couple of my friends were able to convince this friend of mine & we stood by him in his hour of crisis & today he is happy having started his own venture and has now got a couple of job offers as well.

So how did my friend manage to bring change…

The answer sounds simple but requires consistent coding of mind by changing our habits, by focusing on our key strengths, by building resilience to failure or any negativity.

Mahatma Gandhi once quoted:

“Your beliefs become your thoughts, 
Your thoughts become your words, 
Your words become your actions, 
Your actions become your habits, 
Your habits become your values, 
Your values become your destiny.” 

How many of us are living our lives like any robot i.e. we get up early to get out of bed to work, our morning routine, we dress, walk, exercise, interact with others and come back to home feeling tired, deprived of sleep and again we repeat the same cycle till LIFE throws a challenge at us & we are caught unaware as to how to tackle it.

THESE ARE NOTHING BUT HABITS & THESE HABITS GOT YOU TO WHERE YOU ARE TODAY…...

 How to change Habits to become successful?

1)  Have high positive energy & Build enthusiasm.

2)  Determination: Always remember, where there is a WILL, there is a WAY. Be determined to write your own destiny, always give your best shot to all your tasks and projects.

3)  Have Patience & persistence to bounce back:

“Darkest nights produce the brightest stars”, You need to have the ability to bounce back after facing failures or down times. Become resilient, don’t take NO for an answer.

4)  Learn to delegate tasks and free yourself from mundane day to day tasks. Focus your energies on tasks related to your goals, Use Pareto principle, and focus on 20% tasks and activities which would enable you to achieve 80% of your goals.

5)  Want to change yourself – change your circle of people with whom you hang-out the most. It is said that a person’s character is an average sum of 5 people with whom he hangs out the most. Change your circle and change yourself. Hang out with people whom you aspire to become, hang out with people who guide you and are more knowledgeable than yourself. Find yourself a mentor from your industry and keep learning like a good student.

"Guru Drona in Hindu mythological scripture Mahabharata helped Arjuna to discover is the key strength in archery."

6)  Identify your unique key strength: Become “unique” in your field of work, which would become your passion. Just focus on your unique strength & become master of that speciality. Go deep into your speciality and you shall become “Thought leader” of your field. Become disruptor in your category and create your own niche.

I shall include one case study of a successful coffee shop who despite cutting throat competition in coffee shop market, was able to carve a niche for themselves by using disruptive marketing strategies.

Case study: Brand - Prufrock café

Disruptive tool: Disloyalty card – Disruptor in café space.

As a start-up they wanted to do things differently, they wanted to create awareness about their coffee shop which promised to offer its customers a unique speciality is artisan handmade coffee, freshly brewed from hand-picked selected coffee beans from various parts of the world.

Being too tight on marketing budgets, they launched Disloyalty card in the market at the time when all brands worldwide are talking about loyalty cards/systems and retaining their customers. The very thought of DISLOYALTY card was disruptive in nature.

They distributed these cards to their catchment areas and asking their customer to drink coffee in selected competitive stores like Starbucks, etc and they were to complete 5 visits to different coffee shops. Post completing 5 trips to competitive coffee shops, the customer could come and visit Prufrock café and get their first coffee free of cost.

Benefits: Prufrock café wanted to attract only true coffee connoisseurs hence people who came to their shop with DISLOYALTY card were true coffee lovers who could identify the difference in café’s blends and its handcrafted coffees. They appreciated the quality of the blend that Prufrock café had promised as their Brand Promise.

Media mileage: Café got attention from all the local media publications and influencers wanting to know about their DISLOYALTY card and its purpose, resulting in free publicity for the café.

A perfect example wherein Entrepreneurs of Prufrock café not only overcame the challenge of generating publicity and increasing footfalls but also gave an excellent experience to coffee connoisseurs. They converted their roadblock to their advantage.

Hope my article would help upcoming entrepreneur by providing them with key insights and required inspiration.I  can be reached at riteshmohan@yahoo.com in case any of my friends, followers would like to seek any help from me. I would be keen to share my industry experience and wisdom with them.

About the author:

Ritesh Mohan is a passionate retail professional with over 19 years in the retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in Middle East region. He specializes in Retail management, Product development, Brand management, Retail Operations, Sales Management, Business Management & Empowering business owners with his wisdom & experience of around two decades in the industry.

How technology is changing the way we shop & how retailers are re-inventing to digital age?

My current article is in continuation of my previous article which I had written on “Future of retail”. My current article is my attempt to share some key insights and business cases which has helped retailers reinvent themselves to a new phenomenon i.e. Retail 3.0.

I would relate this concept of Retail3.0 to Indian Holy Scripture “Bhagavad Gita” which professes the concept of “Vasudeva kutumbh” which means nothing but Globalization (the world is your marketplace)

In Bhagavad Gita, there is a word called “ tathastu” which means literally “ You ask & You get it” & that’s what is the main premise of Retail 3.0 i.e. how to make the lives of shoppers more convenient by using technology as the main ingredient.

What is Retail 3.0?

Retail 3.0 is the evolution of multi-channel retail distribution. It blends technology with physical brick & mortar retail.

It makes customers (millennials) experience the brand and store more holistically by engaging them & reducing their pain points which a conventional shopping brings with it, for example carrying loads of shopping bags post-shopping to your vehicle and back home.

It Provides convenience and increases the brand recall as the shopper has got himself or herself personally involved in shopping experience both an emotional and intellectual levels. Hence he/she can turn out to be brand’s influencers thus generating more feet-ins and brand recall through social media.

How brands have adapted Retail 3.0?

Case 1:

Company: Bonobos - for men’s clothing store wherein shopper goes n tries out clothes. If shopper likes it, they buy online and garment gets delivered to their home.

Customer Benefit: No hassles of carrying shopping bags.

Retailer’s benefit: Their Retail concept requires smaller area stores that carry limited inventory as it does not require stock room resulting in the addition of more trial rooms for the customers to try merchandise hence smaller spaces means lower rentals and lower inventory holding costs and thus bringing more operational efficiencies.

Case 2:

Hointer 5: is the store wherein you can scan the type of denim jeans and brand of jeans that you want using an app & very pair of jeans that you want to try on will be delivered to a specific dressing room within the selected store of your choice.

Upon trying you may buy it from an app or in case you decide not to purchase then you drop the garment to an allocated shelf and the garment is removed from the app automatically as well.

Case 3: The Store

Brand based in Berlin is a unique example of Retail 3.0. The brand is basically fashion brand but the owners decided to do things differently and stand out from the clutter of fashion brands. They inserted a co-working space, restaurant, hair salon and music pods. They have created a space where their customers could spend the whole day lounging within the store.

Result: Increased dwelling times, Increase in ATV, Increase in feet-ins, higher stock-turns of merchandise, regular visits from fashionistas resulting in free word of mouth advertising as fashion influencers were clicking pics of new merchandise and posting it on their social networks while enjoying free in-store wi-fi and sipping their favourite blend of coffee.

I hope above real-life business cases would help my readers and retail professionals to re-energize their thoughts, their processes to re-invent their core purpose of business and would integrate their core business principles and values with technology and create a whole new retail ecosystem for themselves.

Future belongs to those who dare to think different & act and believe in creating sustainable objectives for their brand. Any retailer or the brand owner willing to meet me for cutting-edge retail solutions, practical guidance for their retail projects can do so by emailing me at riteshmohan@yahoo.com.

About the author:

Ritesh Mohan is a passionate Retail professional with over 20 years in the retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in Middle East region. He specializes in Retail management, Product development, Brand management, Retail Operations, Sales Management, Business Management & Empowering business owners with his wisdom & experience of around two decades in the industry.

How to full proof your career & prepare for future jobs?

My inspiration to write this article comes from wonderful response and feedback that my earlier article received which I had written on developing “Resilience” and how to decode “No” in your mind.

I would give credit to below line which would kick-start my article and would set the tone for my article.

“The Illiterate of 21^st century will not be those who cannot read & write but those who cannot learn, unlearn and relearn” – Alvin Toffler.

My article is my attempt to provide few tips and guidelines as to how one needs to adapt to new challenges that technology would be posing to us especially in the Retail & service sectors.

With the advent of cashless economy and stores without any sales personnel, i.e. stores like “Amazon Go” which uses hi-tech Artificial Intelligence couple with facial recognition and cashless transaction which indirectly means following job profiles would be redundant in future definitely with advent of machine learning systems: Customer service personnel, Cashier & Merchandisers or promoters.

Above is just one example from the front end of the store, at the backend, various functions like merchandising planning & buying could also vanish since the computers/systems powered by AI would replenish the stocks by generating system LPO to the vendor which gets delivered to stores directly by the vendor.

Personally speaking, the overall future of Retail using AI-powered machine learning systems sounds scary but as there is a saying that when going gets tough it’s the tough who gets going.

The future belongs to those who are ready to LEARN, UNLEARN AND RELEARN. 

My article is my sincere attempt to some useful insights

A)  Hone your skills: Every Job function has technical skills and soft-skills requisite.

My advice would be to develop and polish your SOFT SKILLs which machine learning AI systems would never be able to adapt easily.

What are soft skills?

As per Wikipedia, Soft skills are a combination of people skills, social skills, communication skills, character traits, attitudes, career attributes, social intelligence and emotional intelligence quotients among others.

Always remember People love to do business with People and this premise would always remain relevant in future business as well.

B)   Adapt yourself to changing work/ job requirements:

It’s not just the jobs in demand that are set to change, but also the way we work. As mentioned, organizations are facing skills gaps and employers are increasingly turning to temporary and contract employees in a bid to bridge these gaps.

Not only will you gain experience in this increasingly popular format of working, but you’ll help safeguard your future employability by broadening your range of skills and experience in a relatively short period of time.

C)  Adopt a growth mindset and remain curious to learn new things/skills, even if it does not relate to your professional education or experience.

Mark Twain once quipped “I have never allowed schooling to come in way of my education” and I feel this line said by him is so relevant in coming times.

D)  Cultivate Curiosity: Being curious make life more astonishing and would make you happy & more creative. It’s the creativity that would full proof your career as machine learning systems cannot cope with human superpower i.e. Brain.

E)   Listen to your team & family and assume that anyone who disagrees with your opinion is partially right.

Listening to his kids helped industrialist Mukesh Ambani (chairman Reliance Industries Ltd) to launch “JIO” telecom service provider in India and captured over 10 million subscribers in less than 20 days. 

They understood that future belongs not to “Voice” but to “Data” hence they launched 4G LTE technology wherein their competition were still trying to recover costs of their investments in 2G and 3G networks.

To sum up my article, I would like to emphasize on the fact that change is happening faster than ever before, it took 75 years to get 50 million telephone subscribers or users, It took a popular game “Angry Birds” to reach 50 million downloads in less than 40 days.

Most importantly, find your key strength “your MOJO or WHY” and work on it. Become the expert in your field by constant learning.

I would be more than happy to guide my readers and my connections on Linkedin who would need my cutting-edge advice & solutions for driving growth to their businesses. I can be reached at riteshmohan@yahoo.com

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in Middle East region. He specializes in Retail management, Product development, Brand management, Retail Operations, Sales Management, Business Management & Empowering business owners with his wisdom & experience of around two decades in the industry.

How to use Inventory planning tool “Open to buy” & use it strategically?

To write this article, I was inspired by the response that my previous article got i.e. on Markdowns in retail, which got read by over 10,000 retail professionals worldwide right from Australia to the UK and of course middle eastern countries.

In continuation of my earlier blog on Markdowns topic, I would like to highlight another important inventory planning tool i.e. OTB or Open to Buy.

I get so disappointed to read Retail industry news wherein we read that classic brands across the world are either closing their stores or filing for bankruptcy & recent example is of Toys R Us. Many retailers had to close their doors because they did not manage their inventory well. One of the biggest contributing factors to mismanagement is a lack of an open-to-buy system with key retailers.

Even the Middle Eastern region is not insulated from this Retail apocalypse, in fact, gone are the days wherein local traders turned retailers used to import container loads of goods and sell at full margin. Cut short to 2018, to sell even 25% of inventory at full price is a dream come true for many retailers amidst tough competition across categories say its fashion, beauty, toys, electronics etc.

What is OTB?

An Open-To-Buy is a budget and involves the full range of budgetary functions. It begins with the planning process, is future oriented, provides guidance on how much to buy, and provides benchmarks for evaluating progress and adjusting future plans. 

Having too much inventory (or the wrong type) during certain periods can slow your cash flow and reduce profits with too many markdowns. On the other hand, if you under-buy (meaning buy too little product) and miss sales opportunities, then you are not making your potential profit (plus damaging the customer experience). A retailer can be sure to stock the right amount of the right products at the right time by using an Open-to-Buy plan. 

How to calculate OTB – its formula?

As per retail textbook, its formula is simple i.e.

EOM (end of the month stock level-desired estimate)
+ Sales (month actual)
+ Markdowns (month actual)
– BOM (beginning of month stock level-actual)
– Merchandise on order (or stock in pipeline/transit).
_______________________________
= Open-to-Buy (Dhs/ AED amount available for new purchases)

For example, a retailer has an inventory level of Dhs 150,000 on March 1st and planned Dhs152,000/- End of Month inventory for March 31st. The planned sales for the store are Dhs 78,000 with Dhs 7500 in planned markdowns. Therefore, the retailer has Dhs 87,500/- Open-To-Buy at retail. (Here there is no merchandise on order).

Now if you operate your brand at 50% margins then multiply Dhs 87500 x 50 %, you shall get OTB budget at cost i.e. Dhs 43,750/-

In other words, how much inventory can I buy without getting myself in trouble? It is also the process of planning merchandise sales and purchases.

Advantages:

OTB brings a balance to stock on hand inventory and future purchasing. This balance allows you to respond to selling trends in a timely fashion.

Since I have been personally involved in leasing management i.e. location scouting for brands that I have handled in the past and currently, I shall explain this in easier layman terms.

Consider merchandise sitting on that shelf is the tenant. Good tenants pay the rent on time by ‘turning’ or selling frequently. Bad tenants are the ones that don’t sell quickly and sit on the shelf for months. They take up valuable selling space that could and should be given to a faster moving product.

As the landlord, ask yourself how long can you afford to have non-paying tenants on your shelves before it negatively affects the total retail operation?

Good inventory control is critical to ensuring an adequate level of stock is on hand for the number of sales being generated.

My personal advice (based on my retail experience in Material resource planning with the leading Middle Eastern retailer):

a)    Before placing your Open-to-Buy plan into operation, ask yourself if each number is realistic. Does it make sense for the way you do business? Keep in mind that many of the figures in your inventory plan are only guidelines. A good rule of thumb is if your actual ending inventory is within 6-8 percent of your plan, you are doing very well.

b)    Be cautious about offers of quantity discounts or free freight if you increase the size of your order significantly over your normal purchasing levels. Most suppliers tend to offer free freight if brands commit to buying certain quantities and this is a trap as the supplier is trying to upsell his quantities to you with an incentive.

c)      Don’t hesitate to markdown slow-moving merchandise. Make the markdown instantly appealing to the customer by offering at least 25% to 40% off the retail price. The faster it is off your shelves, the faster you can bring in a better-selling product that will have a higher profit margin

In the case of fashion or seasonal merchandise, an Open-To-Buy answers the question of how much to buy, but not necessarily the question of which specific items to buy. For that, a detailed assortment plan is necessary.

How the Planning process works?

The planning process begins with building a sales plan.

Once a sales plan has been developed, the next piece of the planning process is to build an inventory plan. The question to ask is this: "How much inventory do I need at the end of each month to support the next month's sales (in some cases the ending inventory may need to support more than just one month of future sales), as well as maintain effective merchandise displays?"

From there, other things like inventory adjustments and markdowns need to be planned.

Finally, from the plans that have been developed, an inventory receipt plan can be arrived at. For any given period (month or week), the planned inventory receipts are the planned ending inventory, plus the planned sales, markdowns and inventory adjustments, less the prior month's ending inventory. Stated another way, the planned inventory receipts answers the question, "How much inventory do I need to bring in to cover my sales, markdowns and adjustments, given my planned beginning inventory, in order to end up with my planned ending inventory?"

A Practical tip from Planning expert Mr Jude Thomas, as he shares his experience with upcoming planners.

Case study:

Brand Benetton uses this statistical tool very innovatively along with their supply chain strategy.

Normally brands in the traditional/conventional way of production dyes complete cotton yarn with specific colours and then produce garments like sweatshirts, tees etc but Benetton does it differently.

Benetton dyes only certain quantities of sweatshirts, tees etc in various colours and sends to their stores, based on the sales movement of specific colour and type (tees, sweatshirts) then only they dye the complete yarn with colour that is fast moving in their stores.

My friends in retail would argue about the loss of time in getting the feedback from stores about which colour is moving fast, that’s where your smart MIS systems come to play, which can give you reports in a dashboard format.

Benetton has mastered this function of getting the feedback from the shop floor to production lines in minimal time period thus they avoid producing colours that would not sell or move thus preventing overstock at production facility stage itself.

This is what I call learning from internal systems and continuously improving your processes to optimize returns or retail dollars.

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in Middle East region. He specializes in Retail management, Product development, Brand management, Retail Operations, Sales Management, Business Management & Empowering business owners with his wisdom & experience of around two decades in the industry. He can be reached at riteshmohan@yahoo.com