Key Functions In Merchandising - Essay Example

Table of Contents 1.Introduction 2 2.Key Functions In Merchandising and Their Relation with Paul Smith 3 Cross-Selling 3 Discount Offers 4 Gift Certificates 4 3.Assessment of Key Merchandising Function in Relation to Paul Smith 5 Cross-Selling 5 Discount Offers 5 Gift Certificates 6 4.Explanation and Analysis of Retail Outlets of Paul Smith 7 5.Critical Path Management 11 6. Analysis of Paul Smith 12 Trading Environment 12 Visual Merchandising Techniques 12 Visual Challenges 13 7. Conclusion 14 8. References 15 9. Bibliography 18 1. Introduction Merchandising, in a broader sense, is an instrument through which business activities are performed with the aim of drawing the customers in the target market through various offerings for stimulating them to purchase the products. Merchandising and customer service are two important determinants of retail selling. Merchandising entails aspects such as fixtures, store layout and display. In order to develop the interior of a retail store certain merchandising initiatives can be incorporated by an organisation like window displays, décor as well as colour, product grouping and shelf displays among others. Proper merchandising can lead to selling of quality products by the employees to the customers along with facilitating them to deliver better customer service (Jackson & Shaw, 2000). Poor merchandising on the part of an organisation can make it quite tough for the sales staff in a retail store to sell products to the customers, which would effect on the productivity and the profitability of the stores by a greater extent. By incorporating well-prepared merchandising initiatives, it is possible to convert potential consumers into real consumers of a company. The process of merchandising provides a competitive advantage to a company which can further be significant in ensuring its success or failure as retail business outlets in a sector such as fashion based designer products (Queensland Government, n.d.). Fashion merchandising entails an amalgamation of different procedures which a fresh fashion product is required to go through to be accessible in sufficient quantities to the customer after it is prepared by the designer. Fashion merchandising encompasses various pertinent aspects such as target market and price. A key constituent of fashion merchandising is observed to be selling (Frings, 2002). The paper aims to discuss the various concepts of merchandising especially fashion merchandising by considering Paul Smith, a United Kingdom based fashion brand into concern. 2. Key Functions In Merchandising and Their Relation with Paul Smith Key functions of merchandising consist of three variables which include cross- selling, discount offers and gift certificates (Fiore & Tang, 2006). The functions of merchandising are enumerated below: Cross-Selling The process of cross selling evolves when customers purchase one of the two products of a company. Through the process it is also possible to recognize the customers’ who are purchasing a single product out of the two products which also results in reduction of total campaigning costs, enhancement in response rates along with facilitating to provide concentrated efforts to increase sales. The consequences of cross selling campaigns include the identification of similarities in a range of products and recognising or estimating the previous as well as future trends of selling (MicroStrategy Inc., 2013). Discount Offers Offering discounts is also one of the merchandising strategies to attract shoppers to arrive at the stores, which includes providing quality products at a relatively discounted rate. Discount offers are generally not only provided to customers in order to increase sales but also most importantly to sell the less demanded products in the market. Promotion through discount offers can be subjugated through online basis and advertising along with through extensive marketing. Moreover, the strategy of discount offers is also applied to retain customers who are likely to shift from one product to other (Fiore & Tang, 2006). Gift Certificates A gift card or certificate is one of the important merchandising functions which can be utilised by the marketers and applied by the customers for purchasing products in the retail outlets. These cards are generally provided to customers to enhance their loyalty towards a particular company’s offerings. In order to enhance purchase of a particular product or a group of products, companies generally make use of this strategy especially at the time of certain festivals or occasions (State of New Jersey, 2013). 3. Assessment of Key Merchandising Function in Relation to Paul Smith Cross-Selling The process of cross selling with regard to Paul Smith is categorised and handled through marketing through emails, using campaigning strategy and reporting. The process is properly handled with development and application of certain strategies like customer segmentation which also enables to undertake various functions such as upselling, purchase on a repeated basis and cross selling through online and direct online channels. Through cross selling, the stores of Paul Smith carry out different activities for properly handling the process such as retention and growth of customers across the world both through offline and online, on the basis of data analysis and lifecycle of customers. The products are supplied to the online customers through Customer Relationship Management (CRM) system and delivered to them on time and in an affordable price (Paul Smith, n.d.). Discount Offers The products offered to the customers i.e. mainly males from the stores of Paul Smith include coats, suits, jackets, boots, shoes and woollen goods among others at a much discounted rates. For females, different products such as handbags, jackets, dresses, boots, shoes and jewelleries among others are provided at a much discounted rate (Paul Smith, 2012). Gift Certificates The stores of Paul Smith offer the customers two types of gift vouchers such as E-Vouchers and Paul Smith Gift Card. The products are supplied to the customers through online basis. The delivery of products is provided by quick service through online at a price ranging from 20 to 500 Pounds. The products are cashed only at the stores of Paul Smith, in case of gift cards of Paul Smith. The products are delivered to the customers within 1to 5 days within the rates ranging from 20 to 250 Pounds (Paul Smith, 2012). 4. Explanation and Analysis of Retail Outlets of Paul Smith Retail outlets of Paul Smith are located in different areas of the United Kingdom, North America, Middle East and Asia. In the region of the UK, the stores of Paul Smith are located at London and in the areas of Notting Hill as well as Covent Garden among others. In those areas different stores provide various products for its customers such as Paul Smith Royal Arcade is famous for men’s accessories and shoes. All kinds of men’s wear and accessories exclusively are found in these locations. In stores of Paul Smith Brook Street as well as in Paul Smith Sloane Avenue, different accessories of women such as jewellery, bags and shoes are found (Paul Smith, 2013). In the region of Europe, particularly in Belgium, the store of Paul Smith named Paul Smith Antwerp, provides products for both males and females. Thus, it can be ascertained that the strategy of product allocation of Paul Smith vary according to the number of stores available i.e. in the regions such as in Europe where there are generally one or two stores available, there the products are generally offered for both males and females from a single location. However, in the UK, product allocation vary due to availability of a number stores, which enables the company to offer exclusive male or female oriented products from certain stores. Contextually, in France, there are stores comprising mainly female collections of clothing, shoes as well as accessories (Paul Smith, 2013). Image of Paul Smith’s Royal Arcade Store Source: (Paul Smith, 2013) In Holland, the retail outlet i.e. Paul Smith Amsterdam provides products exclusively for both females and males customers offering quality products at an affordable price (Paul Smith, 2013). In the United States which is a part of North America, there are also stores available of Paul Smith where both female and male customers are provided with clothing and other accessories at an affordable price which assists to maintain the growth of the stores of Paul Smith. Even in Canada, there is a store of Paul Smith providing different products for both males and females along with other available accessories (Paul Smith, 2013). In the continent of Asia Pacific, there are stores in places in Australia, China, Hong Kong and India among others where different products such as clothing for both males and females are available with other added accessories meeting the demands of the customers and supplying quality products at a reasonable price (Paul Smith, 2013). In the continents such as Africa and in the region of Middle East, various stores are located in places such as Bahrain, Kuwait and Lebanon among others. Moreover, in South Africa, outlets such as Paul Smith Johannesburg and Cape Town provide men’s and women’s wear along with offering a colourful interior which certainly have all the ingredients to have the shoppers engrossed while purchasing quality products at affordable prices (Paul Smith, 2013). Paul Smith’s Cape Town Store’s Image Source: (Paul Smith, 2013) The stores of Paul Smith provide different categories of garments products such as coats, jeans, jackets, shirts in formals as well as casuals, Polo shirts, Knitwear, Swimwear, T-Shirts, underwear and waistcoat among others exclusively for male customers (Paul Smith, 2012). The stores provide different variety of garment outfits such as dresses, jeans, jackets, tops, coats and outwear, shorts and trousers among others exclusively for female customers (Paul Smith, 2012). Apart from garment categories provided to both males and females, the stores of Paul Smith also offer various dress materials for male and female kids. The garments categories for male kids include Zebra and Blue Moon face T-shirts for kids within the age limit of 2-6 years, at a pricing of around 39 Pounds. Similar types of T-Shirts are provided to kids within the age group of 7-10 years, at a price of around 42 Pounds. The parents can also purchase these garment products for their kids through online basis (Paul Smith, 2012). The stores of Paul Smith also offer different variety of products such as T-shirts and cardigans among others for different age groups i.e. from 2-6 years and 7-10 years at different range of prices. In this context, it can be stated that the products can be purchased also on an online basis (Paul Smith, 2012). 5. Critical Path Management Critical Path Management Chart The stages depicted in the critical management path go through various phases such as designing of products and conceptualization. In the second stage, the products are manufactured. In the third stage, the focus of the company is to target a market to sell the produced products. In the fourth stage, a marketing strategy is implemented. In the fifth stage, the products are promoted through campaigning, through online methods as well as through processes like cross-selling, discount offers, gift certificates and then finally they are offered to the customers. 6. Analysis of Paul Smith The fashion retailer Paul Smith can be analysed based on certain pertinent aspects which include trading environment, it’s employed visual merchandising techniques as well as visual challenges faced by it. Trading Environment The trading environment of Paul Smith can be categorised in relation to the product selling activities. In can be observed that generally the trading activities of the company obey the Contracts (Rights of Third Parties) Act 1999 in the business transaction. The provision of the agreement between the company and the other relevant parties is formed through partnership, agency, franchisor-franchisee and joint venture relationships among others. While purchasing of products takes place through online basis, if any discrepancy occurs related to products purchasing through email then its is governed under the jurisdiction of English laws. The contents included in the site i.e. graphics, logos, designs and photos among others are the properties of Paul Smith Ltd. and has its affiliation and licenses and is secured through UK and international copyrights and intellectual property laws (Paul Smith, 2012). Visual Merchandising Techniques Visual merchandising is a process through which Paul Smith provides displays in the interior of shops and stores. The main aim of visual merchandising is to enhance sales of the stores. Paul Smith provides sessions for displaying data of sales and services to the employees in the store. It also provides training to the employees regarding services and sales of products to its customers efficiently and effectively. Individuals are also recruited by the management in the retail outlets of Paul Smith having experiences working in the retail industry. The displays in the stores are altered on a regular basis and it comprises certain themes which can be connected with the collections provided on a seasonal basis, fashion trends as well as during promotion of dress materials (World Skills International, 2010). Windows display is one of the techniques used by Paul Smith for visual merchandising. It can be noted that with window displays, it can also be taken into consideration that visual humour is also a way to surpass the barriers of both budget and language and also to provide an efficient way to enhance sales for merchandisers such as Paul Smith (Pop Creative Collective Pty Ltd., 2012). Visual Challenges It can be stated that one of the main visual challenges that can be identified for Paul Smith is the glare or light reflection which at times affects the window display strategy employed in a store as it stops the viewers for observing the display provided on the store to attract the customers to visit the store and purchase according to their convenience (Bhalla & Anuraag, 2010). 7. Conclusion From the entire observation, it can be comprehended that merchandising is a process which aims at drawing the target customer of a company by incorporating different strategies such as discount offers, gift certificates and cross-selling among others. Properly coordinated visual and fashion merchandising enables companies such as Paul Smith to create awareness about their offerings, draw attention of a large number of its target customers along with facilitating it increase its sales and productivity. It is observed that Paul Smith has been able to establish its position in the fashion retail segment by creating a successful amalgamation of its strategies i.e. employing merchandising initiatives and providing quality product offerings. Different retail stores of the company have provided significant concentration on strategies such as window display and interior décor of the stores as a part of merchandising strategy. These aspects have facilitated to create a distinct perception of Paul Smith among the consumers which has certainly enabled the company to increase its sales significantly, thus fulfilling the key aim of merchandising. 8. References Bhalla, S. & Anuraag, S., 2010. Visual Merchandising. Tata McGraw-Hill Education. Fiore, F. F. & Tang, L., 2006. Launching Your Yahoo! Business. Que Publishing. Frings, G. S., 2002. Fashion From Concept to Consumer. Pearson Education India. Jackson, T. & Shaw, D., 2000. Mastering Fashion Buying and Merchandising Management. Palgrave Macmillan. MicroStrategy Inc., 2013. Customer Relationship Management. Customer Cross-Sell Analysis. [Online] Available at: http://www.microstrategy.com/Download/files/Solutions/byDepartment/CRM/Customer_Cross-Sell.pdf [Accessed January 10, 2013]. Paul Smith, No Date. Information Pack for Applicants for the Post of CRM/ ECRM Marketing Executive. Email Marketing, Campaign Management and Reporting. [Online] Available at: http://static.paulsmith.co.uk/files/crm-ecrm-marketing-executive-6064-6065-6066-1181.pdf [Accessed January 10, 2013]. Paul Smith, 2012. Shop Online. Sale. [Online] Available at: http://www.paulsmith.co.uk/uk-en/shop/sale/sale-for-her?p=2 [Accessed January 10, 2013]. Paul Smith, 2012. Shop Online. Gift Vouchers. [Online] Available at: http://www.paulsmith.co.uk/uk-en/shop/gift-vouchers [Accessed January 10, 2013]. Paul Smith, 2013. Shop Locator. Shops in Belgium. [Online] Available at: http://www.paulsmith.co.uk/uk-en/shop-locator/be/all [Accessed January 10, 2013]. Paul Smith, 2013. Shop Locator. Shops in United Kingdom Mainland. [Online] Available at: http://www.paulsmith.co.uk/uk-en/shop-locator/gb/all [Accessed January 10, 2012]. Paul Smith, 2012. Shop Online. Men’s Shop Clothing. [Online] Available at: http://www.paulsmith.co.uk/uk-en/shop/ [Accessed January 10, 2013]. Paul Smith, 2012. Collections. Junior – Boys. [Online] Available at: http://www.paulsmith.co.uk/uk-en/shop/junior/boys [Accessed January 10, 2013). Paul Smith, 2012. Collections. Junior – Girls. [Online] Available at: http://www.paulsmith.co.uk/uk-en/shop/junior/girls [Accessed January 10, 2013]. Paul Smith, 2012. Terms and Conditions. General. [Online] Available at: http://www.paulsmith.co.uk/information/terms-and-conditions,310,PAR.html [Accessed January 10, 2013]. Paul Smith, 2013. Paul Smith Royal Arcade (Men's Shoe and Accessories). Shop Locator. [Online] Available at: http://www.paulsmith.co.uk/uk-en/shop-location/paul-smith-royal-arcade-mens-shoe-and-accessories [Accessed January 10, 2013]. Paul Smith, 2013. Paul Smith Cape Town. Shop Locator. [Online] Available at: http://www.paulsmith.co.uk/uk-en/shop-location/paul-smith-cape-town [Accessed January 10, 2013]. Pop Creative Collective Pty Ltd., 2012. Visual Merchandising. Window Displays. [Online] Available at: http://kewjunction.com.au/VM_Booklet2012.pdf [Accessed January 10, 2013]. Queensland Government, No Date. Merchandising. What is Merchandising?. [Online] Available at: http://www.ajml.com.au/downloads/resource-centre/references/marketing/Merchandising.pdf [Accessed January 10, 2013]. State of New Jersey, 2013. Gift Cards and Gift Certificates. New Jersey’s Gift Card Act. [Online] Available at: http://www.njconsumeraffairs.gov/brief/giftcards.pdf [Accessed January 10, 2013]. World Skills International, 2010. Visual Merchandising. Description of Skill. [Online] Available at: http://www.worldskills.li/fileadmin/dateien/berufe2011/D1_EN_v3.3_Schaufensterdekoration.pdf [Accessed January 10, 2013]. 9. Bibliography Rosenau, J. A. & Wilson, D. L., 2006. Apparel Merchandising: The Line Starts Here. Fairchild Books. Slack, N. & et. al., 2009. Operations Management: AND MyOMLab. Financial Times/ Prentice Hall. Read More