Inventory management should be a non issue with new planning software, demand for vendor transparency and sales history veracity.

Implications: -          As written in the title of this commentary, assortment planning and merchandise management should no longer be an issue. With the expediency of the new planning software, a strong strategic relationship with each vendor and a merchandising team that keeps good history it is not the “blind” challenge posed 10 -20 years ago.

Analysis:  -          Not to insult the retailer, but it is only weak management and individual merchants that should be stuck with overages resulting in abnormal high rates of markdowns. If the merchant opts for the correct assortment, the product development team negotiates a solid price (the definition of their core competencies) and the input of this into a planning software program, a reliable algorithm should result directing the quantity, the allocation, the timing even the prepacks that should hit the stores. Along with markdown optimization software which will aide in determining when markdowns should be implemented to maximize margins the merchandising job has changed complexion since the mid nineties. -         


The importance has shifted into developing strong relationships with key vendors making them “business partners” instead of the old cat and mouse game of over selling and blind price negotiation. JIT needs to be a focus along with the agility and the management and buying of the raw material and hardware that go into the item. -         


GMM’s & DMM’s need to be focused on developing realistic sales and margin goals and not be forced into a number that is un achievable. They also need to be more involved with the design, product development and planning silos to ensure everyone is on the same page. Their presence in the factories and with the vendors is more important than ever before. It is a buyers market, if you will, and retailers need to take advantage of this. -         


The piles of cashmere left over in the department stores were inexcusable this past January. The only excuse for this would be that the assortment’s I.M.U. was high enough to make these items profitable through a 100% sell through. -         


For sure the merchant is going to get the assortment a bit wrong but the days of huge mistakes are over. A string of these colossal over bought situations will surely and eventually spell the end to either the merchant in charge or the store in question.