Sales, Stock and Profit: Strategies for Promotions and Clearances with Alison Metcalfe, Merchandising Masterclass (episode 465)

Alison Metcalfe is a Merchandiser. She ‘does stock’ to create efficiencies in the supply chain and maximise profit for retailers. She’s worked at many high street brands including BHS, Woolworths, and M&Co, and most recently spent 13 years as Merchandise Co-ordinator for fashion at John Lewis.

Alison Metcalfe Merchandising Masterclass on eCommerce MasterPlan Podcast

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Dive in:

[04:24] Ideal plan: offer customers what they want.
[08:37] Clear roles for buyer, merchandiser and marketer.
[11:07] Sales first, stock units indicate problems.
[15:25] Get rid of unnecessary stock through promotions.
[17:54] Retailers not effectively using paid systems.
[25:18] Merchandising: key to managing stock for profit.
[26:10] Exit strategy, key sales periods, and stock management.

What is a merchandiser?

Merchandising involves ensuring the right stock is available in the right place at the right time. It’s about offering customers what they want to buy.

Merchandisers use data to determine customer preferences and manage stock allocation. They ensure the stock is ready for customers to buy, optimizing profitability.

Merchandiser-Buyer Collaboration

Alison explains that buyers are responsible for product development and cost negotiations. In contrast, merchandisers use data to decide how much stock to buy. Effective collaboration between them is essential.

For smaller businesses or solo founders, juggling both roles can be challenging. Still, it’s important to balance the emotional aspect of buying with profit-oriented merchandising. Merchandising involves anticipating and addressing issues before they become critical problems. This is a key skill merchandisers must have.

Sales Data in Units

To improve stock management and cash flow, start by analyzing sales data in units. This helps identify stock issues, such as having too many units on hand.

The merchandiser pinpoints areas where there’s a mismatch between stockholding and sales likelihood. This involves managing range selection, minimizing minimum order quantities, and strategizing for overstocked items.

It’s an approach that covers decisions from the initial order placement to handling surplus stock.

Overstock Management

Dealing with overstock involves various strategies. It includes clever marketing, good promotions, and partnerships with wholesalers. The approach depends on the situation.

Starting with in-season promotions, merchandisers aim to sell excess stock profitably. Selling to your own customers for at least 70% off is generally more profitable than bulk clearance deals. Some businesses explore wholesaler options to reach a different customer base.

The goal is to maximize profit and minimize damage to the brand.

Utilizing Software Systems

Make use of existing software systems to analyze sales data and manage stock effectively. Regular weekly reviews of stock data are recommended to keep track of inventory levels. This involves exporting data to spreadsheets or utilizing dashboard features.

Ignoring excess stock ties up cash flow and hinders investment in new products. So, it’s critical to address the issue promptly rather than worry about potential damage to the brand by reducing stock.

Black Friday Planning

Merchandisers play a significant role in Black Friday planning. They focus on categories with excessive stock relative to sales, making it an opportunity to clear out excess inventory and give way for new products.

eCommerce Book Top Tip

eCommerce Traffic Top Tip

  • Align merchandising with marketing. Select products based on margins to effectively drive traffic to your website.

Tool Top Tip

  • A Monday trading sheet or pack, which serves as a crucial dashboard for monitoring sales, stock, and profit.

Carbon Top Tip

  • Buy the right amount of stock. Also, consider sustainable supply chain options, such as using trains instead of full containers for transportation.

Interview Links

Related episodes

  • Inventory Tips from an eCommerce Aggregator Perspective with Allan Marshall (episode 438)
  • From Studio to Wholesale: the Journey of a Sustainable Textile Brand with Helen Round (episode 439)
  • Create More Profit with bestselling author Ciara Stockeland of Inventory Genius (episode 441)

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