Handloom Merchandizing Manual
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This is a merchandizing manual designed by Dastkar Andhra, collating its marketing experiences with information gathered from similar organisations engaged in production and marketing of handloom and handicrafts. The understanding of how organizations and entrepreneurs are merchandizing from decentralized traditional production base for urban markets informs this manual. Our main aim is to work with APCO, the government run marketing retail chain and share our methodology for improving their performance and increase their customer base.
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Merriam Webster dictionary describes merchandizing as “ Sales promotion as a comprehensive function including market research, development of new products, co-ordination of manufacture and marketing, and effective advertising and selling. One can conclude that merchandizing is about stock, sales, display and promotion.”
These are some of the functions which are important for effective merchandizing. Production through marketing lens Stock & Inventory Procurement & Replenishment Product planning Linking production and market Design – Colour & Variety
One other definition commonly known is “ Merchandizing is the planning and promotion of sales by presenting a product to the right market at the proper time, by carrying out organised, skillful advertising, using attractive displays, etc.
Marketing through production lens Quality control Visual display and ambience Promotion and information Customer feedback Customer satisfaction Market information analysis – quantitative and qualitative
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Production through marketing lens
Inventory / Stock Inventory is the most important part of a retail shop. The quality and quantity of inventory can make or break a business. Inventory control is very crucial for any business so that there is rotation of capital. Inventory levels should be in proportion to sales. In retail, 3 to 5 months sale value is an ideal inventory value. The difference between the purchase value of the inventory and sale value of the inventory is the margin the store earns. Inventory management through tracking purchase and sales is important for the store. Inventory quality in terms of design and colour should be evaluated every week to be able to take prompt action. Product-wise inventory check is more desirable as this will bring notice to the gaps in the inventory.
Inventory
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Inventory
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Procurement & Replenishment Product procurement should always take customer feedback into consideration. Customer feedback would reflect in customer’s comments and product sales. Systems for including the feedback could be easily maintained in a form which is easy for the staff to manage. For example, a book could be maintained by a staff member with customer’s request for a particular product or a complaint about non-availability of a certain product. The information in the book could be collated when procurement takes place. Being rigorous and meticulous in information collection and using it for procurement planning would reap benefits and ensure more satisfied customers.
Replenishment is important to keep the stock quality and quantity according to the plan. Procurement should be planned ahead but replenishment should be done whenever the stock quantity goes down or a certain category stock levels come down. Basic variety of stock in an APCO shop would be towels, lungies, handkerchiefs, bedsheets and a basic range of saris, and this would bring a certain amount of sales and repeat visits by customers all through the year. Replenishment of this variety is crucial for customer satisfaction. At times, production procurement can get delayed due to the nature of decentralized nature of production. During these times, the staff should be intelligent in alternative procurement and display existing stock innovatively.
Procurement planning should be done according to the season and product planning should be done at least 6 months prior to the season. This will ensure the procurement of the right designs and colour and there is less risk of not getting the stock in the required variety and at the scheduled time. The stock planning should be strictly done according to the demand of the season. For example, festive season demands certain colours and varieties and summer season demands different colours and textures. Although the general basic stock would be in the store throughout the year, it is important to procure season specific stocks in right quantities to make sure the sales are optimized.
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Product Planning In a store, there are basic products and speciality products. It’s important to break the stock into these two product categories. Planning should be made looking at the previous year sales. Analysis of each category would give an idea of which product
Procurement
category sells well in a given season and this helps in making a trend projection, which can be replicated the next year. New products should be planned according to the season or during occasions where there would be maximum footfalls. Continuous availability of the basic stock is very important.
Market Information AnalysisQualitative & Quantitative
Replenishment
Speciality stock should be ordered according to the season and market tested before making them available in the store regularly.
Merchandizing Cycle
Planning something new is very important to keep the interest of the customers. ‘New’ need not be an entire new product, it could be new colour range, collection of varieties according to
Design
a theme which highlights the existing product range, etc.
Customer Satisfaction
Visual Display & Ambience
Basic Products
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Speciality Products
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Linking production and market
Design – colour & variety Design is the most difficult function to decode in a store. It is an intangible concept. In common understanding, colour and surface pattern like motifs on top of the fabric constitute design. It is difficult to understand the exact reasons a customer likes or does not like a particular colour and variety. But understanding the choices made by the customer about colour and variety are crucial for sales. Procurement planning should incorporate customer’s taste and choice in terms of colour, variety and price points. Colour is the first thing, which attracts the customer and motivates her to look for more varieties. Surface pattern and other details also will influence the decision. For each different kind of product, colourway options are crucial for the customer to buy more. If the colours are wrong, it will definitely result in stock pile up. The colours should be divided into two sets, classic / popular and the other seasonal / festive / special. One should make decisions about colours according to these categories to reduce risk of disproportionate stocking. New colours and designs should be tested out and initial risk should be estimated and the planning should be done accordingly. One can say that a product is successful / accepted by the customer only after completion of three cycles of sales.
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Marketing through production lens
Quality Control After design, good quality is the most crucial element, which will make the customer come back to the store repeatedly. It is important that customer’s trust in us remains intact. Quality parameters for hand process are very different and unfortunately, most customers are disconnected with hand processes. This makes them compare handloom to powerloom and mill products and demand the same quality in handloom. This is a negotiation, which needs to be done with every customer. It is important to decide the quality parameters in production and make sure the products purchased are adhering to those parameters. Then communicating these parameters and what the store is able to commit to the customer becomes crucial. This will make the customers align with the quality parameters which the handloom brand is committing to. Quality issues and problems should be immediately communicated to the relevant department and efforts have to be made to take immediate action and avoid repeating the mistakes.
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Visual Display & Ambience Display and store ambience are two crucial activities in retail business. These are energy consuming and need to be looked at on a daily basis. Merchandize display helps the customer to visualize the product. It will also let the customer know the range of products available in the store. For a regular customer, when the display is new, she would be tempted to make new purchases. In a store, it is important to display as many varieties as possible.
Display also includes the stacking of the products in the shelves. Customer should get an idea of the variety and colourways available in each variety at a glance. It also helps the salesperson to do a quick and efficient servicing, if the products are stacked well in their respective piles. Visual display should also reflect the stock variety or any other special range available in the store at that point in time. Drawing customer’s attention to the product in a way she can relate to is something to be kept in mind while displaying the products. Ambience of the store should be soothing and uncluttered. Extra stock should not be left piled near the shelves. There should be no dust on the shelves and the stock should be clean at all times.
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Promotion & Information Promotion of handloom product and process is important to build loyalty and a following among the customers. The advantage any hand process today has is that there is memory and association of the product for lot of people through product identities and cultural memories. We need to reinforce them by giving information about each product. The staff should know information about each product and should be able to make the customer curious to know more about the product. This will automatically increase value of the product in the mind of the customer. Most often, ignorance tends to make the customer judge the product and price point. This has to be addressed by active engagement with the customer and giving information at the right moment to increase the appreciation of the customer. Promotional activities to promote new range of products has to be actively done. One tends to think that it costs a lot to do promotional activities and wait for huge budgets to do it. While big budgets allow one kind of promotional activities, the staff should try small activities in the store to attract and satisfy customers. These activities would also let people know of the new products and possible usages of the products in different contexts. Some of the activities of promotion are: a. Small posters giving information about the handloom products. b. Stacking of handloom products according to geographical areas. c. Window display of handloom products in a way which appeals to customers’ tastes. d. Communication of offers and events to customers on a regular basis. 18
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Customer Feedback
Customer Satisfaction – Staff Motivation
Any feedback given by the customer should be taken seriously.
One of the most used phrase in retail is “Customer is the king”.
To know the response, reaction and demands of the
It is important to make a customer happy so that the
customers with regard to both product and service will help
business flourishes. One tends to think that satisfying the
in improving performance. This will directly result in better sales.
customer means giving what she wants. It is important
Systems for collecting market feedback are important to be able to incorporate it into the next cycle of procurement. It is advisable to separate the feedback in terms of activities and functions. Then the staff will be able to understand and address issues appropriately.
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to note that the customer is willing to listen and understand and would like to be shown different options. For example, an informed explanation as to why something is not available would also satisfy a customer. Staff motivation directly affects customer satisfaction.
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Market information analysis – quantitative and qualitative Analysing market information both quantitatively and qualitatively will help in merchandizing well. Quantitative analysis is important to keep the stock levels in control and also procure and replenish in right quantities. Qualitative analysis is important to understand customer preferences in terms of colour, size of design and proportion of motifs. The analysis also helps us in being objective in product procurement. Every individual tends to have certain preferences and these will come into play while choosing colours and designs for the store. These however have to be lways crosschecked with customer’s preferences and sales. It is also important to note that a person should be exclusively dedicated for looking at broader trends by collating internal feedback and external responses of the customers. Linking this information to production is important for feeding the information back into production and sales.
Š Dastkar Andhra, 95A Parklane, Secunderabad 500003 22
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