What actually is Merchandise Planning?Oct 13, 2020
We get asked this question a lot, and it's a tough one to answer! Just like the role itself, there are many layers, so here goes...
The main purpose of the Planning function is to:
"Maximise sales and profit through optimising inventory"
Merchandise Planning at its core is about understanding, interpreting and shaping a company’s data into something meaningful; “something” which lifts off a page and informs critical decision making for both the present and the future, within a #retail environment.
A common misconception though is that Merchandise Planning is a rigid, one size fits all discipline. The numbers “do not lie”, and yes, Planning is a predominantly numbers focused role. But numbers and data alone are meaningless, sometimes even misleading, if not understood in the correct context. Merchandising Planning is about overlaying the context on the numbers and interpreting the meaning, which is why we always describe it as being an art AND a science.
Of course there are principles and formulas to follow - the science - but the answers are certainly never black or white. This is why Merchandise Planning can seem quite daunting to new comers - having a paint by numbers approach is very appealing … if x then y. But that's just not the reality in a dynamic retail environment where things are constantly changing, and the best Merchandise Planners are those that are really comfortable operating in that grey area somewhere in the middle.
The 'art' of Planning lies in balancing the objective with the subjective, the past with the present and future, and being able to articulate the story behind the numbers.
It's an exciting, impactful and influential role that provides retailers with functionality that can’t be found elsewhere. Ultimately, the Planner supports in expressing the business strategy through a financial plan that is based on where the business has been, and where it wants to go, aligning business strategies and KPIs with macro financial indicators, assisting with healthy cashflow. It’s about having a really strategic understanding of what you are trying to do, who your customer is and your point of difference.