Have you noticed that even before the kids go back to school, many retail shelves are already stocked with Halloween candy and Christmas cards? To be successful in this industry, retail professionals plan their product and marketing approaches months in advance.
The Retail Timeline
Laurie Karzen, a retail consultant from Emeryville, California, says retailers typically buy six months or more in advance for their stores. "Buyers attend trade shows in January and February, and then again in the summer," she says. "Retailers are geared up in July for what they need for the second half of the year. By early October, stores are stocked for the holidays."
Six Months to One Year in Advance
Retailers need to plan budgets and submit purchase orders to vendors long before products appear on the sales floor. Advanced planning ensures that retailers have merchandise assortments targeted to their specifics stores' customers. This means a clothing chain's stores in Minneapolis offer heavy sweaters in August, while its stores in Phoenix and Honolulu carry shorts in January. And when holiday merchandise appears in October, it can spur consumer demand that picks up steam in November and December.
Accurate seasonal planning leads to improved sales, higher customer satisfaction levels, less surplus stock at all levels of the supply chain, lower risk of running out of high-demand stock and fewer markdowns. Long-range planning is tied to increased profitability.
How It's Done
Retailers navigate seasonal cycles and improve their bottom line through a process known as collaborative planning, forecasting and replenishment (CPFR). Accurate forecasting generates initial preseason merchandise plans based on various trends, demographics, store/customer profiles, econometrics, etc. Forecasting also helps generate sophisticated in-season plans based on actual versus plan results at a detailed (store or department) level.
Retail buyers have the main responsibility for seasonal merchandise plans. All year long, buyers track the trends for their product types and analyze past sales figures for their stores. Many use specialized software to build a greater understanding of consumer behavior into the merchandise planning process. They become experts in their market, its demographics and the products they buy.
Retailers commonly plan one to three seasons ahead while marketing the current season. Buyers review and modify budgets three to four months in advance. Companies that import goods plan further ahead. Buyers help corporate and store personnel plan promotions, marketing and advertising aligned with the seasonal plans.
But that's not all. At the chain or store level, planners, transportation, and logistics specialists and operations management personnel develop strategies for merchandise distribution and allocation. This includes in-store stocking and off-site warehousing, delivery schedules, store maintenance plans, merchandise displays, shelf setups and shopping themes.
For the holiday shopping season, retailers must have policies in place for price-matching, rain-checks, special orders and returns. They need to hire and train staff before the holiday rush hits, and then they have to prepare their after-holiday clearance strategies.
Getting into the Field
When a retail company hires or promotes a planning specialist, it looks for individuals who are familiar with its merchandise as well as retailing practices. In-store experience is always valuable. A bachelor's degree in business (with emphasis on finance, marketing or economics) or merchandising can be helpful. Visual merchandising and display professionals, who contribute to the development and execution of seasonal plans, usually have a background in graphic or fine art.
Large retail chains have formal management-training programs for planning and merchandising specialists such as buyers. These programs typically recruit recent college graduates.
If you're interested in a career in retail planning, you need to be analytical and organized. If you're on the sales floor or in the stockroom, pay attention to and ask questions about seasonal plans. Find out about opportunities to become an assistant in the corporate merchandising department.
If you're in school, check with the career services office about internships in retail management or job fairs where retailers will be recruiting.