Merch-Flow’s MFP module simplifies budget planning for retail businesses on a category basis. Offering precision and flexibility at every stage of financial planning, this module enables more effective management of income and expenses. Additionally, the MFP features the capability to plan category budgets on a global scale, making it an ideal solution for international operations.
Historically a merchandise financial plan is about:
However, in today’s retail landscape, developing a merchandise financial plan in spreadsheets can take weeks and sometimes even longer when a minor change needs to be updated and reflected in multiple places. Without access to accurate, up-to-date information teams are exposed to falling into the trap of either having an overflowing inventory and the associated costs of overbuying or running out of bestseller stock. Both of which can amount to merchandise planning that misses financial targets.
Teams drowning in data and spreadsheet chaos lack the time and visibility to do the analysis necessary to build merchandise finance plans that accurately reflect where and what to invest in while aligning the merchandising strategies to the sales or financial goals. That is why alignment across teams and data is critical. As a first step seed last year’s sales into this year’s forecast and adjust the new targets. Enable top-down, middle-out, bottom-up planning so there is business alignment at the executive level, with merchandisers and planners able to cascade the agreed targets into plans with a much finer level of detail.
A robust merchandise financial plan developed with the help of a retail planning solution, enables merchandisers to work at very granular levels of analytics to ensure products are allocated correctly to eliminate overproduction, gain optimal levels of stock and accurately replenish stores.
Even with a solution to guide decision making, it is complicated to predict future demand accurately for the next season, especially on items that are completely new with no historical data to help inform decision-making. This is where an open-to-buy budget comes in, an OTB plan means merchandisers can effectively control inventory through an powerful allocation and replenishment strategy. Buying little and often to stay cashflow positive and not have money tied up into inventory that may not sell.
The pre-season and in-season targets are intrinsically linked, not only are they important for facilitating businesses to meet customer demand, so that customers are able to buy the products they want, but it also means inventory is more fluid and flexible and stock levels are always at optimal levels.
Today, customers expect to find the products they want in multiple places – in store, on-line or click and collect. A solid omnichannel merchandising strategy is essential for keeping inventory at ideal levels across locations, store clusters and channels.
Developing a merchandise strategy enables top-down financial plans and bottom-up channel plans, gaining overview to keep inventory levels within the constraints of the merchandise plan no matter what the product or where it is sold.
