In the clothing industry, a merchandising plan is vital for any sector but also crucial. The retailers, manufacturers, and buying offices all have interrelated merchandising plans, as it is essential for them to keep coordinating to function, and sometimes this could be confusing.
All three departments have different ways to source merchandise, manage inventory, market the clothing, and maintain partnerships with others in the supply chain. However, they have common pitfalls in their merchandising plans that harm the businesses. Let’s understand them to have maximum sales and profitability.
5 Common Pitfalls in Merchandising Planning Pitfalls in merchandise planning across Retail, Manufacturing, and Buying Offices
#1. Incorrect predictions
A significant factor that causes loss in business is inaccurate analysis of a market and trends to predict future consumer demands. Poor forecasting will lead to understocking or overstocking the inventory. The clothing industry is highly influenced by the season, fashion cycles, and trends; hence, forecasting becomes vital.
For fashion retailers, overstocking might result in dead capital, articles that can’t be sold anymore and loss of profits, while understocking leads to missed sales opportunities.
Manufacturers are also highly dependent on prediction. If not done correctly, there may be interruptions and delays in the production process, excess raw materials, and unsellable products. Similarly, if buying offices source excess clothing or pieces that aren’t in demand, they will also have extra clothing in their inventory.
#2. Poor coordination
A lack of communication between all these players is a common issue in the fashion industry. Miscommunication usually results in delayed product delivery, wrong specifications, and products not meeting the customers’ standards.
For example, when a buying office misinterpreted a retailer’s order, it caused the manufacturer to produce unsellable articles resulting in dead stock.
#3. Failure to keep up with market trends
In the apparel industry, fashion brands and retailers must keep up with customer demands and rapid fashion trend shifts to avoid losing their consumer base and potential sales.
As fast fashion continues to grow, retailers must carefully order the number of clothing units. Otherwise, sellers are left with extra clothing pieces as trends quickly die out.
In the same way, if manufacturers and buying offices don’t manage to produce and supply in time, they are also left with extra merchandise that is now out of trend. To avoid this challenge of leftover merchandise, all three departments must invest in various clothing items. They might also opt for timeless pieces to stay relevant in the market.
#4. Inefficient Inventory Management
Not stocking enough or stocking more than required is a common mistake by retailers, manufacturers, and buying offices. This, either way, causes financial losses.
For example, a retailer miscalculated a viral fashion article that they would need and ordered a smaller amount. The manufacturer and buying offices had extra stock once the trend went out of date, and retailers lost potential sales, leading to losses.
#5. Complicated assortment
Having a wide variety is a positive thing to do regarding clothing as it becomes inclusive. But at times, this might not be as big of a boon as it seems. A wide variety that isn’t well coordinated might confuse the customers.
Retailers will also find a poor inventory turnover if this happens. Manufacturers trying to produce a massive variety of products might result in delayed production, and buying offices will find managing their inventory hard.
| Pitfall | Retail | Manufacturing | Buying Offices |
| Inaccurate Demand Forecasting | This leads to overstocking or stockouts, impacting sales and margins. | Disrupts production schedules, resulting in excess or insufficient products. | Misaligned purchase orders, causing overstock or shortages in retail. |
| Poor Communication and Coordination | Results in incorrect or delayed product deliveries. | Produces incorrect items or misses critical deadlines. | Leads to a misalignment between product requirements and market demand. |
| Failure to Respond to Fashion Cycles and Trends | Risks overstocking outdated styles or missing out on trends. | Produces irrelevant or unsellable items if trends are misjudged. | Over-purchasing outdated trends or underestimating emerging styles. |
| Inefficient Inventory Management | Overstock or stockouts lead to markdowns or missed sales. | Excess raw materials or delays due to poor stock control. | Supply chain disruptions due to mismanagement of product flow. |
| Sustainability and Ethical Sourcing Issues | Fails to meet consumer expectations, damaging brand reputation. | Non-compliance with ethical standards can result in reputational harm. | Sourcing from unethical suppliers may erode consumer trust. |
| Overcomplicated Product Assortment | Confuses customers and complicates inventory management. | Adds complexity to production and increases costs. | Results in supply chain inefficiencies and overcomplicated assortments. |
Conclusion
We hope this list of 5 Common Pitfalls in Merchandising Planning gave you a good starting point for you to build something that stand the test of times. If you are looking to start a clothing brand, we recommend that you read our guide – how to start a clothing brand.
If you have already started a fashion brand and you are looking for suppliers, do read our guide on how to find clothing manufacturers and do not forget to download our checklists. If you want to get in touch with us, please connect with us here.
We also have a separate section – Commonly asked questions about the most expensive clothing brands, it is worth checking out.
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