, Assortment, buying & merchandising
By Ken Zschocke
Lesson 1
Two types of goods
commodity goods: goods that are needed for life, high share of visitors based, price
comparison, one-time use, no real innovation, standardized goods, no brand value
Specialty: goods that are more special, everything that is not needed to survive.
Long tail: new products entering the market, expiry date, declining demand.
Commodity: Standard, high-volume goods
Internet increases competition -> decreasing margins
Long-tail: Innovative products, smaller volume
Fewer competition -> higher margins
Assortment: many long tail goods > few commodity goods
Merchandising :“Merchandising is any practice which contributes to the sale of products to
a retail consumer. At a retail in-store level, merchandising refers to the variety of products
available for sale and the display of those products in such a way that it stimulates interest
and entices customers to make a purchase.”
Merchandising in ecommerce: An eCommerce retailers “store” is their website–often called a
“webstore”. They face the same challenge: arrange the store in ways that optimize product
sales. But, in a digital store, the merchant’s tools for doing so are different.
What is category management
• `The process of managing a retail business with the objective of maximizing the sales
and profit of a category.`
• Facilitates problem solving
• Centralized responsibility
• Maximized profit (strategic BU’s)
• Deliver consumer value
• Regarded as potential substitutes by Consumer
• IT is a key enabler -> Big Data
• Helps tailoring the product acc. consumer needs
• Offers aimed to provide satisfaction
• Can lead to re-evaluation of Business Processes
4
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