How to Create a Merchandising Plan for a Retail Brand

A Step-by-Step Guide to Developing a Merchandising Plan for Your Retail Brand

A merchandising plan for a Retail Brand becomes vital if you start your clothing brand or have one and want to generate better sales. In this competitive market, you can’t just stock shelves upon shelves of clothes and expect your brand to become successful. You have to keep the demands and trends in mind while going ahead with it. Now, you might wonder what a merchandising plan is and how I should create one.

Let us simplify it for you.

Suppose you are in the kitchen and want to whip up a phenomenal dish. You find your ingredients and seasoning but can’t need help finding the recipe book. Without the instructions, how will you, as a cook, figure out how to make a satisfying meal? You would need to know what ingredients to use, when, or what quantity you would require. And if you have little to no knowledge, it’s best to hope you order some food for later. Going into anything with random choices and being successful at it is improbable.

Here, the ingredients are your products, and the seasoning is you tending to customer demand and taste. Without proper planning, you won’t know business’s whens, hows, and whats. Your recipe book and the merchandising plan have become even more critical. It is the instruction on how well you are aware of the trends and of what your customers want so that you stock the right clothing pieces. Now, pricing is another thing you need to consider after you have the desired products. Doing all this will be no good if you can’t reach your required audience to generate sales, so having an efficient way of promoting your products and their placement is another chief principle to keep in mind. Once you have all this figured out and implemented into your business, you will start noticing maximized sales, better profits, and customer satisfaction.

In other words, a successful marketing plan is made when you have mindfully blended your creativity into a data-driven inventory and priced your apparel to satisfy your customers and leave an impression. This not only profits you right then but will also have the customers returning for the same experience, generating a stable consumer base and ultimately leading to long-term profits.

Now that you’ve understood a merchandising plan, let’s debrief you and create one by following a few simple steps. 

#1. Analyze your consumer base and the market. 

Knowing your customers’ tastes, wants, needs, and demands is basic. But you can take it further by recording what products in your shop were sold the most and least liked. 

Making such a record, especially using a table, will be helpful even in the long run. By doing this, you will be able to find your target customers, their age group, likes, buying habits, and their influences. You can create a profile like the one given below.

Once you have reviewed your existing consumers and ensured you have their needs in mind, you will have to analyze market trends. This method will help you secure and expand your existing sales by attracting newer people.

Ensure you have ample knowledge of the industry and how to grow. For example, if you are in fashion and notice a shift towards e-commerce, and sustainability is a new trend, then you must also thoroughly analyze your competitors who target a similar audience. While researching their products, prices, and offers, you might find gaps and do better than them. 

You will have to research the current trends, what is in demand the most, and who your competitors are. Knowing what is popular, what is going out of stock quickly, and what your competition is offering will be key to bringing in new customers. 

#2: Set merchandising goals. 

When you have analyzed what you need to stock, you will now set sales goals. Staying practical, you must set achievable goals regarding how much profit you want to generate in a specific amount of time. For this, you will also have to calculate the number of units you need to sell. At this point, you will also decide what product range you will include. Now, you must determine what items, colours, styles, designs, and sizes you offer.  

This will generate a larger audience for you. For example, you analyzed in the first step that there is a market demand for plus-sized clothing, and the talk is all about inclusivity in a brand. You might want to introduce your plus-size line and ensure it’s available in all your stores. This way, you will be targeting a crowd that wouldn’t initially give you any sales.

 With sales goals, you will also plan out your inventory turnover. Planning out what and how much you are going to stock and how many times you will have to restock the same items is crucial. Your brand generates a high turnover, which means the sales are high. However, going out of stock isn’t the best either. If your most-demand product has only ten units left but the consumers wanting it are around 30, you ultimately lose good sales. Make sure to have a well-planned inventory. How? Well, that’s the next step.

#3: Planning out your inventory 

So far, so good?

You have found out what you want to order and how much sales it will generate. Now, let’s talk about how much you need in stock. If you have already started your business and have some sales history, you must analyze those first. 

This data, combined with your knowledge from the very first step, will help you forecast the demands of your customers. Forecasting will enable you to determine how much stock you need. 

Another thing to keep in mind here is your relationship with the vendors. A professionally healthy relationship with them will ensure a smooth business relationship between you and them and help you deliver your items on time, with better pricing and access to exclusive items. 

Regarding exclusives, the seasonal stock is very profitable if made available in stores before the season arrives. Hence, stocking your clothing according to the seasonal trends is wise. 

#4 Pricing 

A big mistake that brands make while pricing is just throwing on the highest rates on any product that is high in demand. This will only generate a tiny amount of profit. It might so happen that the same thing is available at a much better price at your competitor’s store. 

Analyzing your competitors and their prices and competitively setting prices of your merchandise is the right way to go if you want to stand out to customers. But this does not mean you will lower your profit margin or almost make it null just so the consumer base stays with you. A profit margin should be calculated so you aren’t discouraging your customers. 

All this won’t mean that you will always be on your toes running your business; you will experience slow days, too. A strategized sale or promotional offer will be a great idea during such a period. These sales can also be used to clear the old inventory. 

#5: Presenting your products 

How often have you gone window shopping, entered a store, loved something, and bought it? I guess we are all guilty of falling prey to fancy displays. It’s even more bizarre that these displays are very deliberately made in such a way to entice us. 

You are going to do the very same for your brand stores. Visuals play an important role when it comes to the in-store experience. However, the display window must look impressive to lure a person into the store. 31.2% of people, according to an EUDL study, say that the display window is a critical factor in influencing a person to enter a store. Upon entering the store, a person must easily access your high-demand merchandise. 

Make sure the layout is planned to maximize customer flow and visibility. In the same study by EUDL, about 38.8% of people reported that mannequin styling increases store traffic. 60% of people find interactive displays to influence them into purchasing an item. Say you have a high-demand top; styling it with a bottom that looks great will likely encourage people to buy the whole outfit. 

About 16% say their unplanned purchases were due to in-store advertising and displays. This might seem like a small number to you initially, but getting every sale matters as it brings you closer to your target. 

If you also have an online presence, the interface of your site must stand out. Your store will leave an impression, while online shopping is difficult to achieve as most businesses have moved online. But however difficult it may be, having a user-friendly, attractive storefront is extremely profitable. Online customers do not limit you to an area but allow you to expand into different places worldwide.

Make sure that the image quality of your digital store is optimized. The model and product descriptions must be detailed in such cases, as they benefit a customer. A person who is doubtful while buying online is likely to read these and get a better understanding of what things they are purchasing. These small things will help you generate much more profit than you realize. 

#6 Marketing and promotion 

Today, when such a large percentage of our population is online, it is better to promote your brand online. Marketing strategies must be well sought out. Frankly, one should use every chance to promote their brand. But planning those too is important. Placement of your merchandise, talking about it, etc., could only get you so far. Having a team that handles your social media and engages with the audience is one of the strategies many brands use right now. 

So, create an online presence and plan how your brand will appear in front of your consumers. Giving customers a sense of belonging adds a personal touch, which leaves them with an impression. Another strategy is to send out PR to influencers with a significant online presence or other businesses. This is called cross-promotion and helps you reach a much wider audience. 

Apart from this, as we discussed earlier, in-store advertising will help bring in extra customers. Here, when I say in-store promotions, I’m talking about in-store events, loyalty membership cards, offers, limited editions, etc., to keep your customers engaged and bring in more clout. 

#7: Continuous Improvement and Oversight 

One thing we’ve all noticed is that big brands ignore feedback from customers. We are not going to make that mistake. You already have an excellent team reviewing your media relations; hold meetings with them and ask them about your customers’ feedback. Read all the feedback if you handle media alone or on your site. Monitoring your product review is as important as analyzing your sales and best-selling products. You can always check out Cassey Ho’s blogs on YouTube. She does post shorts and handles criticism well. This has undoubtedly played a significant role in her success. And for your brand, too, you should be taking the review and improving your merchandising. 

After this, you should also analyze what’s selling and what’s not to determine what you want to restock and what products should be discontinued. You might also figure out what products you want to promote and what kind you can put on a clearance sale to start afresh. You will also see that the merchandise that isn’t trending or in season generates fewer sales; putting these discounts at the right time will be wise. Throughout your journey, you must apply different strategies to adapt to trends and stay current with the market and customer preferences. 

#8: Review and Optimize 

Remember we set goals for your business? You don’t just have to put and forget about them, either. From time to time, you will have to go back and check it. A short analysis of whether you are meeting your sales goals and inventory turnover will help you find areas for improvement. This way, you can make adjustments in time. Looking for KPIs (key performance indicators)  such as gross margin return on investments, sales per square foot, etc., will help you pinpoint areas of improvement and optimize. Another plus point will be that you will find out about your strengths and weaknesses through this method and get to work on them. 

Optimizing here means once you have figured out what’s working for you and what is not. You start making adjustments. Maybe you found out you can send out better PR, invest more in advertisements at some outlets, change your price points to cater to your consumer base, and so much more. Implementing these changes, testing and experimenting with your fabrics and other products, and receiving continuous feedback will surely lead your brand to success. 

By now, you must have realized this isn’t a static process; you must keep working on your merchandising plan and evolve it with your brand. If religiously followed, these eight steps will surely lead you to sustained success with your retail brand, meet all your targets, and build customer loyalty.

Conclusion

We hope this list of Top 10 Children Clothing Brands in UK 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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• Why Retail Merchandising plans focus on consumer trends
• Compare merchandising planning across retail brands vs. manufacturers vs. buying office

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