Can Space Management ever properly work for Apparel Merchandising? That’s a question we hear from our customers. The answer is yes, and the reasons to do it are more important than ever:
- Store associates need to create enticing and brand-consistent apparel merchandising.
- Customers expect to have an inspiring experience when they choose to shop in your physical stores.
- Inventory planning and allocation needs to understand what can “fit” on the store sales floor.
Store employee turn over rates reaching unheard of levels. A consistent store experience for your customers happens with clear apparel merchandising direction. Using a floorplan and planograms is a proven way to provide that direction. But too often retailers do not put into place the proper business practices to take advantage of their space management system in support of apparel merchandising. It is why so many retailers in the mass, dollar and specialty channel use planograms for their “hard lines” while “soft lines” must use photos and a couple of mannequins.
One of the reasons that apparel or soft lines are rarely planogrammed is that there is tremendous seasonal turn. The products may not be replenished (gone when gone) and seasonal and style differences across regions adds complexity. For example, “spring” and “winter” selections vary between Miami and Minneapolis – both in thermal properties and timing. Most retail merchandising teams use photos of a prototype set to give direction to stores. Store teams try to find the one that most looks like their store and make some interpretations. Sometimes to disastrous effect.
The problem with photos is that you can’t integrate photos to supply chain and distribution systems. So, retailers are constantly juggling spreadsheets with A/B/C/D assortments or inventory requirements. Then they use manual updates to send store-specific signals to allocation and replenishment systems.
It doesn’t have to be that way.
You can use your the same space planning system to create the key between SKU’s to Stores and sales floor holding capacity.
Here are three basic tools that store planners can use to make their lives easier when it comes to merchandising apparel in stores.
- holding power by fixture type,
- item attributions (or tagging)
- sales forecasts.
When used together these things give smart merchandising direction for apparel – your store teams will know what should go where.
Apparel holding power by fixture type
At a base level, your store floor plans direct where apparel fixtures go on the sales floor. Identify apparel fixtures like rounders, nested tables, perimeter ladders systems, 2-ways, 4-ways and H-racks on floor plans. Each fixture has a maximum and minimum amount of hangers or folded goods that can be merchandised on them. You can carry those min/max limits in the attribute of the fixture when setting up the fixture in your space planning system.
Apparel Merchandising Relies on Item Attributes (or tagging)
When setting up softlines, there are just a few additional fields to add to the item setup to make them a more intelligent group of products. Usually retailers set up apparel to include size and color. If it is a licensed property, it may also include “Disney” or “Pokemon.” Typically, these have to align to the category hierarchy. Thus, a Pikachu licensed T Shirt rolls up to Children’s Tops which rolls up to Children’s Apparel. Hierarchies are limiting because everything must be in a mutually exclusive relationship. But with Tagging, products can belong to an unlimited number of groups.
Let’s say we intend to bring in a Pokemon shirt for spring-summer 2022. That Pikachu shirt can also belong to Spring 2022,, Gaming shirts, Beachwear, Memorial Day Promo, Assortment Lot A, and someday: Closeout August 2022. Every item is tagged, instead of managed in a spreadsheet off to the side. So Space Planners can use the tags on floorplans and planograms to provide apparel merchandising direction. And allocation and replenishment systems can use the same feeds from space planning in hard lines for soft line categories.
First, create a floorplan each month. Tag each fixture on the sales floor and perimeter wall on the map. Let’s imagine a store that belongs to the “A” stores because it is among the biggest. Fixtures are mapped to hold Spring 2022 items. In March, front-facing fixtures debut with Easter. Then transition to Beachwear in April. There is a special promotional fixture deeper in the store where we put all our promo items. During July BTS, we highlight gaming shirts in the front windows. Closeouts always go to the back 2 rounders.
Now let’s follow our Pokemon shirt:
It comes into the store in March as part of Assortment Lot A. Then, it moves to a front-facing fixture for the April Beachwear collection. It goes to the Promo rack for the Memorial Day Sale. Then It moves to the Front windows for Back to School and finally the Closeout racks in August. Tagging items and fixtures creates store-specific direction.
Sales Forecasts
Sales forecasting is easier with a baseline for our Pokemon shirt and then using tagging to change the forecast. Let’s say our baseline forecast for the shirt is 3 sales per week per store. We tweak the forecast to skew to greater sales for Smalls than XL’s since it is a more juvenile property. Then we start augmenting the forecast by event:
- All items in the Beachwear event should get a +10% increase for 2 weeks
- All items in the Memorial Day ad should get a +50% increase for 2 weeks
- Front window items see a +40% increase for the 2 weeks they are in the window.
- We never forecast for Closeout sales.
Thus, the Pokemon shirt starts with a 6 month baseline sales forecast of 66 units. { (3per week*(26 weeks-4weeks)) because we do not forecast for the closeout month of August.} But with the tagged event overlays, it increases to 72.
When the Allocation and Replenishment system gets the signal that all Assortment Lot A children’s shirts are shipping for March delivery, it can use tagging and apply the tagged event sales lifts to each item, creating a more accurate forecast by item. Since events have time horizons, it can also stage the allocations to land in the stores at the correct times.
When the floorplan fixtures are also tagged by event , the allocation system can use the Min and Max capacity levels by fixture combined with the collection SKU sales forecast to understand how many of each item can fit on the sales floor at once. Delivery schedules change to optimize flow through rates and prevent products from sitting in the back rooms of stores. That prevents stranded inventory from being “stuck” in a store back room while online orders go unfilled because the DC sent all the inventory to stores.
Space Management for Apparel Merchandising – Does it work?
This solution is in use at a mass retailer I know. It reduced the workload for the apparel merchandise planners because they can use the same inventory processes as the center store hard lines teams. Floorplans are key to managing inventory and display locations. They still use photos to provide direction, but they eliminated spreadsheets and manual inventory uploads.
The Apparel Merchandiser can now effectively manage and display their inventory. They are no longer managing different systems, orders or spreadsheets for each department in the store. The Apparel merchandising team has one system they use to do everything. It helps with receiving new items to replenishing sold out locations on the floor.
You can adapt Space Planning to support apparel merchandising. We can help you work within your system’s boundaries to do it well.