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Dynamic Merchandising
Wednesday, November 14, 2018, by Chris Boydell, comments (Disabled)

In a perfect world with unlimited space and no limitations on stock holding, there would be a myriad of choices for everyone in every situation. We all know this doesn’t happen in practice.

Q: Why do white sheep eat more than black sheep?
A: Because there are more white sheep than black sheep

If you are a triple extra large in clothing, you are grateful that there is something to choose in your size - you certainly have learned not to expect the same range as is available in mediums. The same is true if you have small feet. There are not as many choices available for people with smaller than usual feet.

Of course the reason that there are fewer options for these categories is that the clothing and footwear stores don’t sell as many of those sizes and so they don’t stock as many pieces. If they were to stock the same quantity and variety, it would not increase the sales of these outliers, it would just increase the stock-holding. What’s more, for any product line with a turnover of styles, the outliers would be more likely than the main sizes to be remaindered at the end of the season.

The same is true with reading glasses and sunglasses. Retailers have limited space and limits on stock holding capacity (monetary and well as physical). So each individual spot of display space should be optimised. Now one can’t just fill the whole stand up with the most popular item or category - this actually limits your appeal. Variety is still important.

You want to appeal as much as possible to as many people as possible.

Who are your white sheep?

Dynamic Merchandising says that you will dedicate display space to your products proportionally to their demand. The most popular gets the most space. The least popular the least space. The result is a maximisation of stock turns for each individual display spot on the display stand. By maximising each individual space, the stock turns of the whole display stand are maximised.

We find quite often that store staff like to organise product (magnification and/or gender) in blocks on the display. This can involve over- simplification of display space and result in vast over-representation of a product category on display. Why give a product group which is responsible for less than 5% of your sales, 10%,15% or even 20% of the display space? The stock turn rate for those spaces is going to be divided by 2, 3 or even 4.

What's more the product which is responsible for more of the sales is being under-represented on the display. This sort of symmetrical/whole line display strategy costs turnover and money.

Remember, each store is different and stores do change over time. Subsequent visit from your On the Nose Account Manager will see an update of the learned sales pattern and be reflected in Dynamic Merchandising and product re-orders.

Best Sellers

Dynamic Merchandising and our proprietary stock management system also recognises that some items are best sellers.

Keeping only one piece in stock of your best sellers is a sure-fire way to limit your sales. With only one piece in stock, you have no way of knowing if you could have sold the item ten times over in the re-order period, or if it only sold the day before.

Keeping 2 pieces in stock of everything either doubles your stock holding or halves your variety. Neither is a good outcome.

Dynamic Merchandising examines individual item sales and identifies best sellers whilst balancing the display and re-orders by category.

 



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