SNEWS® Retail Merchandising Training 101: Preseason strategies

We want to offer you a few tools and strategies for managing your preseason buying. For the sake of these examples, we'll assume you have trade shows to attend. We'll also assume you will do more than a little of this preseason preparation in your store...
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June has arrived and by this point, you've:

  • Summarized your spring season just in time as it drew to a close.
  • You know how your categories performed, where your opportunities are, which vendors and categories are on the move and which are fading away, and where you made money.
  • You've created a preseason open-to-buy budget for next year.
  • Your largest vendors are calling wanting to show you their Newest Most Super Gizmos Ever.
  • You're a retail rock star!
  • What you really want is to go float the Green River or run a marathon or get back in shape, but here comes spring again!

Now what?

Get ready for the next round of the Infinite Round Retail Bout, that's what! It's never over, fellow boxers.

We want to offer you a few tools and strategies for managing your preseason buying. For the sake of these examples, we'll assume you have trade shows to attend. We'll also assume you will do more than a little of this preseason preparation in your store.

Yeah, we've heard all the tired arguments from retailers who don't go to trade shows because they are too time intensive, too costly, and vendors come to see retailers anyway.

Well, consider this: Trade shows should be used to see what's new -- new companies, new trends, new ideas -- not what's old and assumed.

We've also heard from retailers who tell us that for some reason or another, they don't like to pre-book their business? The reasoning is that by not pre-booking, the retailer thinks he or she remains in control, buying only what is needed when they need it and even then, they still often have product left over from the season before.

To which we answer: Is your business really that good you can afford to not preseason and gain up to 10 points? And why do you still have that old stuff? We've covered that in an earlier article, no?

Since you are still reading, here is our stance on trade shows, both national and regional:

If you go to shows in order to buy from the same vendors you've always patronized, or to book the business you already know you're going to buy, then stay home and save a few bucks.

If you don't see that adding several points to your gross profit by leveraging preseason discounts and dating is supremely beneficial to your bottom line, then, well, we need to talk.

In 2006, Nordstrom made 7 percent net profit. Excellent in anyone's book for retail. Sears produced a whopping 1.7 percent net. Federated put down 6.3 percent. Best Buy killed it at 3.7 percent. Think any of them don't go to trade shows, don't look for new products, don't eek out every possible margin point available through discounts and more?

Taking advantage of preseason programs will more than cover your costs of travel and still leave you meaningful incremental profits. Retail is an incremental improvement business.

Going to trade shows will give you a fighting chance of being first with the new killer category or brand.

Go to the trade shows.

Take full advantage of the incentives vendors offer via their preseason programs.

We're going to assume that if you're still reading, you got the message and you're signed up and going to the upcoming trade shows and you're going to wring every last dime out of the VP of sales from your favorite vendor.

Let's get ready to rumble

Before it all starts, take your history and your new buying budget for next year and build yourself some tools. These take a little time and will require you to learn some basic Excel manipulation. It's worth it. It will save you truckloads of time.

(Note: Any of the tools we show you here are used as examples only and the ways we look at things may not be yours. Do it your way, but do IT! If you'd like template copies of what we've built for ideas to use in building your own, let us know.)

Ahead of the shows and certainly on the show floor, you will want some way to keep track of what you've spent on which vendors, broken down into the merchandise categories you are comfortable with. Further, you'll need a simple roadmap to break that category buy down further, by vendor, to which ones you plan to grow and which to limit or exclude.

Here's an example:


(Note: For a moment, if we can go back to our article on merchandise planning, we can begin to see the possible implications of how finely we set up our merchandising hierarchy and how many categories we decide to attempt to manage.)

Don't be intimidated by this chart. What we've done is taken just a few pieces of data from the spring we just finished, built a few formulae and cells we can enter our decisions into (such as percentage growth by vendor) and then we LET EXCEL DO ALL THE WORK.

As you book an order, you will enter the cost dollar amounts by vendor for this category (sportswear department) into each month you planned to receive the goods.

The tool then keeps a running balance of what you've got left to spend.

Your sales rep may not be keen to arrange his or her presentation to fit your planning, but guess who the customer is!

We can see in this example that we'll be overbought in a couple of months, but overall we're okay. You may choose to adjust this or let it ride.

Another tool we'll suggest is one that gives you fast and accurate breakouts within an apparel or footwear buy. These can be complicated, with colors, sizes, widths, etc.

The tool below (or one like it) you can replicate and use over and over again to take your hunch about how many units you want to order and spread those units over the various size and color buckets based upon a few simple entries having to do with your percentage size run history and your hunches about colors. You'll need to study history to gain an understanding of, shall we say, the physical profiles of your customers. But over time this will emerge.

Take a look:


To use this tool, all we do is enter the planned size run percent (making sure it totals 100 percent via the "Check %" column) and our planned color percent, the style name and units we think we can afford. Excel does the rest.

As you can see, we cannot buy decimal portions of a style, so you will want to round up and down, but 95 percent of the work is done for you.

A similar tool can be created for footwear, where more sizes, various colors and then widths are often involved.

Here are a few more suggestions for managing your time, energy and money during preseason time:

  1. Do all the work you can in your store before the trade shows, especially with your big lines you know you will support. Sales reps will appreciate this and are more than willing to come see you early.
  2. This will leave you time for the fringe brands or categories at market and most importantly it will allow you to look at new products from new vendors.
  3. Leverage every discount and dating program you can!
  4. Ask about co-op marketing funds to help pay for that ad you want to run to support the Brand New Cutting-Edge Gizmo.
  5. At least bring up the notion of late delivery penalties. You may not get them, but not asking will assure you won't get them.
  6. Don't forget to include your markdowns in your plan.
  7. Before the trade show, make appointments! You should be in control of your time. Plan them so you don't have to walk 10 miles a day, unless that's a goal. Make appointments early to get the slots that suit you.
  8. Talk with your retail compatriots. Compare notes. Gossip. The aisles of a trade show are rich with information.
  9. Ask about show specials. They can bolster your margins for in-season goods and most vendors will have a list of closeouts or over-stocks they'd prefer you to take off their hands.
  10. Eat lunch. Hydrate. Get a good night's sleep. Take care of yourself: You are the profit engine and you need to be SHARP!
  11. Have fun! Trade shows are industry events after all. Leave time for networking and learning opportunities.

Next article, we'll talk about collecting sales history and the analysis of that information that can make us smarter and our businesses more profitable.

Have a question that is not answered here, or an observation, or even a better way of going about the business of retail merchandising planning than we have offered up? Then the SNEWS® Retail Merchandising Training 101 Forum is for you. Click here to enter a private chat section open only to SNEWS® subscribers.

This article is part 7 of a 10-part Retail Merchandising Training series produced by SNEWS® and authored by Michael Hodgson and Geoff O'Keeffe. SNEWS® president Michael Hodgson, in a former life, was a manager for five years with Adventure 16 and the general manager overseeing a team of buyers and store managers for three years at Western Mountaineering. In those roles, he learned, sometimes the hard way, how to make a living and make a profit (or not) in the world of specialty retail. Geoff O'Keeffe has held retail senior management positions at Granite Stairway Mountaineering, Adventure 16, Patagonia and PlanetOutdoors.com, as well as having served as president of Lowe Alpine Systems USA and Mountainsmith. He is currently the vice president of operations at American Recreation Products, which he is managing to fit in while working on new projects at his home in the mountains above Boulder, Colo., where he is a fourth-generation resident.

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