Susan Martin (Stock)

In my career I’ve managed Planning & Inventory for in General Merchandise. Ranges were highly seasonal in various ways eg Mother / Fathers Day, Valentines Day, Xmas (even trees, cards and wrap had different start and exit dates), Easter, BBQs, Outdoor Furniture, Stationery (Back to School, calendars / diaries for new year or fin yr). Once you see them, examples are everywhere! It’s common to see seasonality in Apparel - swimwear, knitwear, fabric weight, sleeve length - but in my experience, the above events had far sharper sales patterns. Once the “seasonal sell by date” was reached it was near impossible to sell the products, even discounted. Recognising patterns and nuances at all levels is vital to successful inventory management.

I suggest 2 ideas here, that have worked well for me in different organisations. 1. In addition to including “core” products for demand stability and predictability, you can soften the peaks and troughs by including some core colours, or attributes that are more trans-seasonal. This allows some flexibility to blend these items back into the offer and prolong their relevance, so that they can live on into the next collection. 2. Try to bundle opposing seasons in your planners' portfolios eg dresses and knitwear (consider ACTUAL lead times and critical paths), to spread their workload.

Be careful not to combine products with very different seasonal patterns into the same class in your product hierarchy. Peaks and troughs will cancel each other out at the aggregated level, and the true shape of demand will be obscured.

I've found good way to stay on top of seasonal performance is to set weekly targets for cumulative sell through and adjust on approach. Each week, if the total sell through is not on track to that plan, you can clearly see how much time you have left till the exit date, and can take pre-emptive action. Examples of action are: pricing adjustments, revisting allocation plans, consolidation of stock in better performing stores, or new VM directives. If you aren’t measuring this deliberately you could miss critical timing clues and small windows of opportunity to salvage your season. This approach is nice and simple, but so effective.

My perspective is the Retail industry, specifically Merchandise Planning. The focus of the Budget in this context is “above the line”, only as far as gross profit. It centres on Sales, Margin and Stock, and associated KPIs. It's common in Merchandise Planning to conduct a monthly Replan- figures are reforecast based on performance, new info and direction. A rolling forecast ensures a continuous view of inventory levels and health is maintained, projected into future periods. It reduces budget cycle time as inventory levels in the new budget period are “known”, not estimated as part of the budget process. It supports creating an accurate budget, faster. Ultimately a Merchandise Budget is a key component of the budget in a Retailer.

I believe that communication relating to markdowns extends beyond messaging to the customer. There is internal communication and collaboration required in order to get the best result. For example, speaking with the buyers to ensure they are on the same page about product performance and understanding the impact for future orders; informing retail stores so that they execute and display markdowns and promotions as intended; keeping Allocators informed so that they can make the best decisions when sending remaining stock to stores, or consolidating existing markdown stock. There are many touch points, most of which fall into the Merchandise Planner's area of responsibility. When a markdown is well organised, it gets better cut through.