Thinking beyond Tech – Setting up Merchandising Operations in retail GCCs
In my previous article, I had discussed setting up Finance & Accounting teams at the GCC. In retail, the most critical function (often called the heart of retail) is Merchandising. Setting up operations teams at the GCC to support merchants is the next logical step.
Merchandising is the function that is responsible for buying and selling the right product at the right price and selling it to the right customer at the right place, time and price. There are many things that this function needs to do right in order to drive superior customer experience and eventually gross margin and profitability. In summary, merchandising answer these 5 questions:
What to buy? (Strategy & Assortment Planning)
Where to buy from? (Vendor management)
How much to buy? (Demand planning)
Where and who to sell to? (Allocation)
How do I sell it? (Pricing & Promotions)
What are some teams that can be set up in the GCC to support Merchandising?
Vendor set up & Management
Collects data of new onboarded vendors
Manages vendor database
Periodically monitors and updates vendor data
Item set up
Sets up items in product information master
Ensures accuracy of item attributes – size, colour, price, etc.
Works with merchants and vendor partners to establish standards for data collection and accuracy
Image editing
Edits vendor provided images/images (model & product) shot at the photo studio to meet brand guidelines
Works with brand management team to maintain brand guidelines
Product copywriting
Creates product copies for all items on the website
Works closely with the merchants and marketeers to adhere to brand guidelines and language
Site merchandising
Performs site audits to determine that the right products are listed in right pages, quantity is accurate, price is right and customers are able to have a trouble free shopping experience
Reports out site metrics
Analyses customer behaviour on the website. For. e.g. what do customers search for on our website and are they finding the right products?
SEO operations
Performs keyword research and identifies optimization opportunities supporting paid and natural search
Monitor and reports site ranking and SEO performance
Inventory Allocation
Allocate inventory to stores at a product level
Work with merchants to determine exceptions to allocation recommendations
Monitor and publish allocation efficiency
Provide functional assistance to technology upgrades and custom algorithm development
Demand Planning
Monitor customer behaviour and create demand forecasts for each product line or product
Work closely with merchants and financial planners to create accurate forecasts based on key business inputs
Space planning/Planogramming/Visual Merchandising
Creates planograms at a category level to help stores with product placement and space planning
Monitors and reports KPIs related to planogram performance
Competitive Intelligence
Performs competitive intelligence studies to determine a retailer’s position vis a vis their competitors on many metrics – price, promotions, inventory, shipping, customer ratings, etc.
Works closely with pricing team to feed into the retailer’s pricing strategy
Merchandising is a very broad and a critical function within retail and the operations teams could be structured differently depending on the scale of the retailer.
What are some teams that are not on my list? Thoughts?
Global AI & Data Science Leader| Visionary Innovator & Builder of High-Performing, People-Centric Global Teams| Architect of Enterprise AI Transformation
8moReally loved the article, it provides a good overview of merchandising support functions that can be set up in a GCC. Few things (just my point of view) which might be of consideration are: Behind the Scenes of Buying: The article talks about managing vendors and planning what customers want, but some nitty-gritty of how products actually get ordered are important as well. That's where the buying operations team comes in. :- Handle the paperwork (and the digital stuff too!): They create, track, and manage all the purchase orders—basically, the official requests for products. Keep things moving: They're in constant contact with suppliers, checking on orders and making sure everything arrives on time. No one wants empty shelves! Deal with returns (the not-so-fun part): If products are damaged or don't sell, they handle getting them back to the suppliers. Help get the best deals: They crunch the numbers and give our buyers the information they need to negotiate the best possible prices with vendors. Also one more important part can be : Quality Control/Assurance Operations: Ensuring product quality through inspections, managing quality-related returns, and setting quality standards.
Senior Associate Data Scientist at Infosys
9moVinodh Ramachandran, This is an excellent article that explains the merchandise operations in simple form. The breakdown is like a flow chart, which helps to answer the questions in a step-by-step manner. While demand planning is crucial, I believe under Vendor set up and Management the Buying and Sourcing team should also be included in this list as they play a pivotal role in negotiating deals with vendors, sourcing new products, and managing vendor relationships. They're responsible for ensuring the right products are sourced at the right price and quality.
Senior Manager - Immediate Joiner |Certified Six Sigma Yellow, Green Belt |Ex- Infosys, Lowes, Tesco, Hewlett Packard
9moInteresting! Thank you for sharing
Manager - Demand Planning at Anheuser-Busch InBev (AB-In Bev)
9moThank you for sharing this, Vinodh! After being in Merchandise Operations for a decade, I can say this is a simple and effective way to explain it to anyone, even those unfamiliar with the field. Appreciate your insight!
Excellent breakdown of essential teams for merchandising support within GCCs! Managing such intricate operations effectively is crucial. Are you leveraging a platform like ServiceNow to optimize these processes? At Kumori Technologies | ServiceNow Partner, we are actively implementing ServiceNow to seamlessly integrate various functions, enhancing real-time decision-making and operational agility. Let’s connect to discuss how this could transform your merchandising strategy and elevate your operational success.