Merchandisers play a crucial role in the textile and apparel industry, acting as the vital link between buyers and manufacturing units. Their primary goal is to ensure customer satisfaction within specified timeframes. Merchandising goes beyond just arranging products; it involves strategic planning to ensure the right products are available at the right place and time, maximising sales and customer happiness. This is particularly crucial in the apparel industry, given the constantly changing consumer preferences and short fashion cycles. Without merchandisers, meeting customer demands becomes challenging due to a lack of coordination with buyers and suppliers.

In the realm of supply chain management, the integration of efficient systems is essential to meet consumer demands swiftly. In today’s era of fast fashion, the focus is shifting from traditional supply chains to value chains, where manufacturers and retailers prioritise customer satisfaction over brand loyalty. This shift has amplified the responsibilities and challenges of merchandisers across the supply chain, from suppliers to retailers. Essentially, merchandising forms the backbone of supply chain management, driving profitability and customer satisfaction through meticulous planning, procurement, inventory management, and visual presentation.

This article explores the key aspects of merchandising that influence supply chain management in the apparel sector, along with the roles and responsibilities of merchandisers in manufacturing companies.

Basic Definitions

• Merchandise: Merchandise refers to goods or products available for sale. In the context of retail and commerce, merchandise encompasses a wide range of tangible items, including clothing, accessories, home textiles, and non-textile goods. Merchandise can vary in quality, style, and price, catering to diverse consumer preferences and market segments.

• Merchant: In the apparel industry, a merchant is an individual or entity involved in buying and selling goods or merchandise to earn profit. Typically, a merchant buys and sells clothing and related products from retail stores or companies. They handle tasks such as inventory management, pricing, and product selection.

• Merchandiser: A merchandiser is a professional responsible for planning, procuring, communicating, negotiating, and managing the inventory of products, ensuring they meet customer demand while maximising sales and profit. In the apparel industry, a merchandiser acts as a liaison between buyers and manufacturers. They coordinate with various departments, including product development, design, marketing, sourcing, production, and packing, to ensure timely delivery of goods. They often work closely with the merchandising team to source and stock the right products to meet customer demand and sales targets.

• Merchandising: Merchandising is the strategic process of procuring, planning, presenting, and selling products while focusing on sales, profit margins, and customer satisfaction. It encompasses all activities related to product selection, pricing, promotion, and visual presentation, aiming to attract customers and drive purchasing decisions.

• SCM: SCM stands for supply chain management. It refers to the management of the flow of goods, services, and information from raw materials, starting from suppliers to manufacturers, retailers, and ultimately to the end consumer. In the apparel industry, SCM involves coordinating activities such as sourcing raw materials, production planning, inventory management, logistics, and distribution to ensure the timely delivery of high-quality products to customers.

Roles and Responsibilities of a Merchant in Apparel Supply Chain Management

Customer and Vendor Management: Building strong relationships with vendors and customers is paramount, as they are crucial to organisational profitability. Merchants are responsible for regular follow-ups with customers, facilitating communication between vendors and suppliers, managing relationships with both new and existing customers, and handling required documentation and samples. These daily tasks ensure smooth operations and foster trust within the supply chain.

Product Development: In the apparel industry, a merchant must have a deep understanding of products, including material types, best suppliers, pricing, and quality parameters. Merchants oversee the development of products as per customer specifications, from sourcing raw materials to the final product. They ensure quality standards are met and maintain effective communication with all departments involved, from product development to packing. Knowledge of standard operating procedures (SOPs) and import/export regulations is essential.

Production Follow-ups: Merchants manage the entire manufacturing process. After pre-production sample approval, they oversee the production timeline, shipment of samples, and buyer visits. Key responsibilities include ensuring the quality, cost, and timely delivery of the final product. Merchants must address production issues by coordinating with relevant departments and employing effective cost management and negotiation skills. Quality assurance and control are also critical, as delivering the right quality product is necessary for securing future orders.

External and Internal Collaboration: Effective collaboration boosts relationships and reduces communication gaps, which is beneficial for planning, managing work, and executing processes. Merchants facilitate internal team interactions and external communications with buyers, suppliers, inspection officers, logistics personnel, and legal departments. They play a vital role in managing communications within and outside the manufacturing firm, ensuring smooth operations and resolving conflicts.

Inventory Management: Merchants are responsible for maintaining optimal inventory levels to prevent stock shortages or overstock situations. Proper inventory management minimises the risk of lost sales due to unavailability of goods, and avoids excess inventory that ties up capital and warehouse space.

Demand Forecasting: Merchants and data analysts study market trends, consumer behaviour, buying habits, and historical sales data to forecast demand accurately. This involves predicting which styles, patterns, colours, and sizes will be in high demand during specific seasons or events. Continuous analysis of these data sets helps in understanding customer needs and demands.

Product Selection and Procurement: Merchants collaborate with designers, suppliers, and manufacturers to select and procure products that align with market trends and customer preferences. They negotiate pricing, terms, and delivery schedules to ensure the timely availability of raw materials and other products.

Price and Margin Management: Merchants develop pricing strategies to maximise profitability in a competitive market. They are knowledgeable about costing, mark-ups, and margins, allowing them to determine optimal pricing for different products and market segments. This skill is crucial for effective negotiations and profit margin optimisation.

Supply Chain Coordination: Merchants work with cross-functional teams, including designers, production managers, sales, and marketing teams, to ensure seamless coordination across the supply chain. They communicate product requirements, timelines, and expectations to all team members within manufacturing units to facilitate efficient product development, production, and delivery processes.

The Role of Technology and Data Analytics in Modern Merchandising

The adoption of technology and modern data integration methods has significantly enhanced production and merchandising practices in the apparel industry. Tools and techniques such as inventory management systems, predictive analytics, and artificial intelligence empower merchandisers to make data-informed decisions, optimise inventory, improve customer experiences, and streamline supply chain operations. The impact of these technologies is expected to grow, driving further innovation and efficiency aimed at increasing profitability.

Inventory Management Systems

Effective inventory management is fundamental in the apparel industry, ensuring optimal stock levels and the availability of the right products at the right time, place, and quality. As inventory represents a significant asset for shareholders, maintaining, optimising, and utilising stock effectively is a crucial and challenging task for merchants. Proper use of raw materials through to their conversion into finished goods is a key responsibility of merchandisers. Leveraging technology can greatly assist in this process, with tools such as real-time inventory tracking systems, automated replenishment, and inventory analysis and optimisation being particularly beneficial.

1. Real-Time Inventory Tracking: Real-time inventory tracking is a highly effective method for monitoring inventory levels. This technology is used to calculate dead stock, required inventory, and perform ABC analysis, among other functions. Modern tracking methods include advanced software featuring radio frequency identification (RFID) devices, barcodes, scanners, and centralised datasets. In the apparel industry, merchants use various technologies to monitor raw materials and samples, often employing barcodes and kanban cards. For packing and finished goods, RFID systems are commonly used. Barcodes and RFID tags allow merchandisers and production teams to precisely track inventory as it moves through the supply chain, from manufacturing to the point of sale. This real-time visibility helps prevent stockouts and overstock situations and provides a clear understanding of supply chain management. A centralised database offers a single source of transparency for inventory levels across multiple locations, facilitating better coordination and allocation throughout the entire unit.

2. Automated Replenishment: Advanced technologies like data analysis and demand forecasting, derived from past sales data and current market trends, play a significant role in automated replenishment. These systems analyse purchasing behaviour, inventory stock standards, and repeat purchase data to predict future demand and trigger automatic reordering processes. This technology helps merchandisers ensure that high-demand items are always in stock while minimising excess inventory. In manufacturing, the integration of suppliers enables automatic replenishment orders, reducing lead times and ensuring a steady supply of products throughout the manufacturing process.

3. Inventory Optimisation: Effective inventory control and optimisation are crucial for reducing manufacturing costs and lead times. The production team uses inventory tracking systems to achieve this. In the apparel industry, one of the best methods for optimising inventory is ABC Analysis. This technique categorises inventory into three classes—A, B, and C—based on their importance and turnover rates. High-priority items, classified as A, are managed rigorously to ensure constant availability. Items in classes B and C are managed with varying levels of attention based on their respective values and importance.

The integration of technology and data analytics in modern merchandising has revolutionised the apparel industry. By employing sophisticated inventory management systems, automated replenishment processes, and effective inventory optimisation techniques, merchants can enhance supply chain operations, reduce costs, and improve customer satisfaction. As these technologies continue to evolve, their impact on the apparel industry is expected to grow, driving further innovation and efficiency.

Predictive Analytics

Predictive analytics, a key component of data analysis, involves using historical datasets, statistical algorithms, and machine learning techniques to forecast future outcomes. This can include visual representations like pie charts and graphs, as well as trends, algorithms, numbers, or percentages. In the apparel industry, predictive analytics plays a crucial role in several areas:

Demand Forecasting: In retail outlets, data analysis techniques can be used to forecast demand for various trends, including seasonal trends, market trends, profit margins, and manufacturing costs. By analysing past sales data, patterns can be identified, and predictive models can forecast demand for different seasons, helping merchandisers plan their stock accordingly. Demand forecasting involves predicting future trends by analysing historical data sets. Additionally, predictive analytics of external factors, such as fashion trends, economic indicators, and consumer behaviour, provides more accurate demand forecasts for merchants.

Pricing Strategy: Dynamic pricing is an effective strategy to stay competitive in marketplaces. Various predictive models can analyse market conditions and provide competitor pricing in real-time to adjust prices dynamically, maximising revenue and profit margins. This technique also helps with markdown optimisation by predicting the optimal time and level of markdowns, allowing apparel merchandisers to clear out excess inventory without significantly impacting profitability.

Customer Insights: Personalised marketing is a powerful method for increasing customer engagement and loyalty. By analysing customer purchase history, preferences, likes, and dislikes, predictive analytics enables personalised marketing campaigns. This helps create personalised shopping experiences and optimises product assortments.

Key Competencies for Effective Merchandisers in Supply Chain Management

To ensure smooth supply chain management, merchandisers must manage various activities and continuously upskill themselves. Here are some essential skills for merchandisers:

1. Knowledge of Production Processes: Understanding different production activities is crucial since merchandisers act as the link between the buyer and the company.

2. Soft Skills: Strong negotiation and communication skills are vital, especially for companies involved in exporting goods.

3. Managing Multiple Accounts: Merchandisers must be able to handle various customer accounts simultaneously.

4. Costing Expertise: A deep understanding of costing is necessary to ensure products are priced correctly.

5. Buyer Requirements: Knowing the design and quality expectations of buyers is essential.

6. Material Review: Evaluating the materials used in garment manufacturing is part of a merchandiser’s responsibilities.

7. Collaboration with Other Departments: Working closely with design, production, and other functions within the company is necessary for seamless operations.

8. Time Management: Effective time management is essential to handle multiple orders simultaneously. This underscores the importance of logistics and inventory management.

Merchandisers must be adept at these competencies to handle on-the-spot or process-related problems effectively and ensure the overall success of the supply chain.

Role of Merchandisers in Enhancing Supply Chain Competitiveness

In the apparel industry, merchandisers play a crucial role in linking various functions that enhance supply chain competitiveness. Their functions directly influence performance criteria, which in turn determine the overall competitiveness of the supply chain. This relationship can be divided into three main sections: apparel sourcing criteria, the role of the merchandiser, and supply chain competitiveness.

Apparel Sourcing Criteria

The critical criteria for sourcing apparel, which merchandisers must consider, include:

1. Cost: Managing and minimising costs while ensuring quality and timely delivery.

2. Lead Time: Reducing the time from product design to delivery.

3. Flexibility: Ability to adapt to changes in demand and trends.

4. Quality: Ensuring high standards of product quality.

5. On-Time Delivery: Meeting deadlines for product delivery.

6. Capacity: Managing production capacity to meet demand.

7. Communication: Maintaining clear and effective communication with all stakeholders.

8. Innovation: Incorporating new ideas and technologies.

9. Trust: Building and maintaining trust with suppliers and customers.

Merchandisers play a pivotal role in linking these apparel sourcing strategies to boost supply chain performance, from material sourcing to the delivery of products to end customers.

Apparel Supply Chain Performance Criteria

Merchandisers impact the performance of the supply chain through:

1. Cost: Effective cost management ensures competitiveness.

2. Lead Time: Reducing lead time improves market responsiveness.

3. Quality: High-quality standards enhance customer satisfaction.

4. On-Time Delivery: Meeting delivery schedules boosts reliability.

5. Capacity: Adequate capacity planning meets demand fluctuations.

6. Communication: Clear communication reduces errors and inefficiencies.

7. Innovation: Innovative approaches drive improvements and competitive edge.

Supply Chain Competitiveness

The broader aspects of supply chain competitiveness influenced by the merchandiser’s role include:

1. Cost: Competitive pricing and cost-efficiency.

2. Logistics: Efficient movement of goods.

3. Flexible Supply Chain: Ability to adapt to changes in demand and market conditions.

4. Quality: Maintaining high standards across the supply chain.

5. Delivery: Ensuring timely delivery to meet market needs.

6. Product/Service Innovation: Continuous innovation to stay ahead of competitors.

7. Improved and Value-Added Services: Enhancing services to add value for customers.

8. Customer-Supplier Relationship: Building strong, reliable relationships with suppliers and customers.

A proficient merchandiser ensures cost efficiency, quality, timely delivery, and innovation, all of which contribute to a competitive supply chain. By focusing on these areas, the merchandiser not only enhances supply chain performance but also drives overall competitiveness in the market.

Conclusion

In the apparel industry, merchandisers play a pivotal role in bridging the gap between buyers and manufacturers, ensuring seamless coordination and customer satisfaction. Their responsibilities extend beyond product arrangement to encompass strategic planning, procurement, inventory management, and visual presentation. These tasks are crucial in adapting to fast fashion trends and maintaining efficient supply chain management.

Merchandisers facilitate strong vendor and customer relationships, manage product development, and oversee production processes to ensure quality and timely delivery. Their expertise in pricing, demand forecasting, and collaboration with cross-functional teams drives profitability and competitiveness in the market.

The integration of technology and data analytics has revolutionised merchandising practices, enhancing inventory management and predictive analytics. Real-time inventory tracking, automated replenishment, and inventory optimisation systems ensure that stock levels meet consumer demand without overstocking.

Effective merchandisers must possess a broad set of competencies, including production knowledge, negotiation skills, and time management. Their role directly influences supply chain performance criteria and ultimately enhances supply chain competitiveness. By focusing on these areas, merchandisers drive innovation, efficiency, and customer satisfaction, securing a competitive edge in the fast-paced apparel industry.