Is now the best time ever to be a merchandiser?
Published: 22 Aug 2017
The role of the merchandiser is growing in scope and importance as retailers face up to changing consumer demands.
Today’s consumer is spoilt for choice. If they cannot get what they want, when they want it from one retailer, they can simply move on to the next. Retailers, meanwhile, are grappling with operating across multiple channels and markets, as well as the issues around seasonality, and a constant cycle of discounting and promotions.
Against this backdrop, the role of the merchandiser is becoming ever more complex – and crucial – to business performance.
“It’s the most exciting time to be a merchandiser,” says Erica Vilkauls, chief operating officer at Thomas Pink, who boasts more than 30 years of experience in retail, including senior merchandising roles at John Lewis and LK Bennett. She points out that merchandisers used to be focused on tight stock control, managing risk and managing stock. Today, they use a wealth of data to help drive the planning and trading process.
That data can include anything from reports on previous weeks’ and cumulative trading, customer feedback, reviews and social media posts, online customer behaviour such as abandoned baskets, and in-store digital technology.
“Today we have the richest data we’ve ever had,” says Vilkauls, pointing to RFID (radio-frequency identification) tagging coupled with interactive screens and mirrors to reveal where the customer is in store, what products they pick up and put down, which ones made it to the fitting rooms and which were eventually purchased.
“We can see where customers move from and to, and which parts of the store attract customers and which don’t,” she says. “There is so much the merchandiser of today needs to be able to analyse and sift through to get to the heart of what all this data is telling them.”
Teams still have “lessons learned” meetings to look back at previous seasons, but now, with more data available, the planning process can be more forward-looking.
John Cossey, head of merchandising at Jigsaw, invites people from the marketing, visual merchandising, online, concessions and international teams, to pull the entire experience together: “Then we come out with a top-line one-page document to see what worked, which is key for building ranges,” he explains.
The company has recently also moved to a single view of stock, which will allow it to fulfil online orders from stores. Cossey believes this will be a game changer, increasing sell-through by as much as 10% and changing the way Jigsaw allocates stock.
Now there is more visibility, you can learn from the mistakes and pass those learnings across the business
John Cossey, head of merchandising at Jigsaw
These shifts in the industry have prompted the London College of Fashion to examine the role of the merchandiser in today’s retail businesses. It has held two focus groups so far, inviting a mix of junior and senior merchandisers.
James Clark, a lecturer in buying and merchandising for a number of the college’s courses, is spearheading the research. He agrees that the job is expanding in scope: “We are finding the merchandiser role is becoming much wider with both strategic and operational functions, while the buyer is increasingly focused on brand vision – almost merging into the designer role.
“Historically [merchandising] was more about stock management and flow of stock but now it is more of an analyst role, and it is very fluid. The merchandiser still uses spreadsheets, but is also looking at multiple ranges over multiple locations often in two hemispheres, pulled by the consumer. The role is becoming more holistic, so merchandisers need a 3D view of the business.”
He adds: “There is lots of big data but merchandisers have to be able to make sense of that to balance stock management with a sense of excitement for the customer.”
Clark believes the traditional relationship between the buying and merchandising functions within businesses is becoming less important, as particularly junior merchandisers spend more time interacting with other areas of the business, such as marketing or ecommerce.
Seasonality is really impacting the merchandising function
Nilesh Karia, group merchandising director at The Dune Group
Nilesh Karia, group merchandising director at The Dune Group, agrees that merchandisers are increasingly working with other departments. However, he points out discounting on the high street and unpredictable weather patterns in the UK mean it is still important to foster a strong relationship between the buying and merchandising teams.
“Seasonality is really impacting the merchandising function but it is also a big issue for the business as a whole,” he says, explaining that he often has to decide whether to carry more stock in case there is another mild autumn or cool summer.
This is echoed by Cossey: “Traditionally Jigsaw always had two seasons, and now we’re looking at monthly drops. Seasons are becoming less and less relevant, especially with the weather as it has been – it’s all about ‘buy now, wear now’.”
Managing ranges according to much tighter drop times is harder, admits Vilkauls, but she says the data is available to achieve it. Making sure the right stock is in the right place at the right time would help many high street retailers reduce their reliance on discounting, she adds.
Karia believes merchandising will always require the traditional skills of good business acumen and a way with numbers and data, but says there is room to be creative. “For example, there are different ways of making money in terms of markdown and promotion,” he says.
But for Cossey, this is not the main focus of the role: “There is a degree of creativity but you are ultimately looking at where the sales are missed. Pace is key – the customer wants more and more newness, so it is about being clever with the buyers and buying to almost sell out.
“Now there is more visibility, you can learn from the mistakes and pass those learnings across the business.”
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What does it take to be a merchandiser today?
Erica Vilkauls, chief operating officer at Thomas Pink
Aren’t we all tired of going to stores in July and August and being faced with winter coats and jumpers? Planning by seasonality had made things clear for the merchandiser in terms of intake dates and managing the supply chain. Customers have spoken and retailers now have to listen, or risk their businesses. As a customer I want to purchase a product today that I can wear today. Managing ranges according to much tighter drop times is harder – but we now have the data we need to achieve this, and achieve it we have to. This may also help manage discounting and should reduce it. If retailers work harder at the “right time” part of the age-old merchandising adage “right stock, right time right place”, there will be less stock to mark down. Some retailers have trained their customers to wait for all the mid-season Sales and flash Sale events and no individual merchandiser can stop that as that’s a board decision, but the merchandiser’s skillset will be required to deliver a “sell at full price” vision.
James Clark, lecturer in buying and merchandising for a number of courses at London College of Fashion
We are undertaking some significant research into the roles of the buyer and merchandiser and from our initial findings, we think the roles in their traditional sense are no longer relevant. We have held two focus groups so far with both senior and more junior employees and found there is some disparity between what the senior heads of departments and directors think the merchandise function is and what the more junior roles actually do. Having experienced the function in the way it used to be run, the more senior people tend to still think of the role as quite siloed and working alongside buying, whereas in reality today the merchandiser may have closer contact with other departments, such as marketing. In a pureplay etailer, the merchandiser may look to marketing and SEO to push products, rather than the buyer. These changes are due to that structural shift in the way customers interact with brands – the customer is proactive and all retailers can do is catch up.
John Cossey, head of merchandising at Jigsaw
I think the game changers will be single view of stock and more complex reporting in terms of business channels. We are moving away from two seasons a year to more regular drops. People want to buy now to wear now, with a nod to the seasons. International business brings other pressures – if you’re selling in Australia, you need a different mindset. Around 60%-70% of our range is for global launch. Having a market like Australia, which is behind, helps, as we know what trades well. We often find, if an email or a story works here, we can push it for Australia later. We are now working more with other departments than we’ve ever been – online gets a lot of focus. Now there is more visibility, you can learn from the mistakes and pass the learning across buying and design.
Mary Anderson-Ford, managing director of merchandising recruitment specialist Aqua Retail
It is an interesting time for merchandising. If you look at one product type – shirts, for example – you might have four people looking after that from a macro level, as well as international, ecommerce and branch function. With retailers looking to streamline and plan more efficiencies, there is a danger they might look to reduce headcounts within some of those areas. But that would remove a lot of the specialist knowledge that is crucial right now. Branch merchandisers would know, for example, that you are not likely to sell a lot of red in Portsmouth because of the football connections, while international merchandisers would know that in Holland turquoise is associated with bin men. You can’t have a generalist approach. The buying function is arguably becoming more specialist and focused as a sort of “guardian of the brand’s handwriting”, while the role of the merchandiser has grown – it used to be more operational, but now will have to take into account things like returns, logistics and distribution.
Merchandising: The key facts
20%-30% growth in the merchandising workforce is needed by 2020 to meet demand
83% of retailers surveyed said merchandising skills will need to evolve over the next five to 10 years
17% said the skills required for merchandising will be entirely different from the present
*Source: OC&C and Fashion Retail Academy research