Traditionally in retail, merchandising refers to the selection of products a retailer has available for sale and how those products are displayed in-store. And with retailers aspiring to cater to the modern customer, merchandise hierarchy is an essential element in any modern enterprise retail management software.
Every retail organisation, regardless of its size, has a merchandise hierarchy for all the goods. A merchandise hierarchy is a reporting structure under which sales and inventories of products are tracked and managed. Essentially, categorisation of products is the primary function of the enterprise retail solution’s merchandise hierarchy. As common misconceptions go, it is NOT intended to describe a product or classify organisational, production or design elements.
And with retailers eying Cloud applications for management solutions, merchandise hierarchy is one of the services that can be powered to give even more freedom and agility for the store.
A retail merchandise hierarchy can have flexible or multiple levels, with the highest level providing an overall enterprise view. Then, subsequent hierarchies narrow down the family or class of the product. It provides a common language and consistent codes at each hierarchical level, and ensures that the retailer’s merchandise resides systematically in one place and is grouped based on similar form, format and purpose. And when that place is the Cloud, it lends agility and savings for the retailer.
With an effective, Cloud-based automated merchandise hierarchy in an Enterprise Class Retail management solution, users can:
- Define multiple merchandise hierarchies in the system, and have it ‘trickle’ down to all the stores automatically
- Attach more than one merchandise hierarchy to individual products
- Top-down reporting at all merchandise hierarchy levels; thereby saving man-hours and leading to effective resource management
- Hierarchical classification of products allows customisation of reports and evaluation, to address specific needs of retail businesses or the overall enterprise.
By incorporating automated merchandise hierarchy, a retailer benefits through better visibility and performance, understanding of customer demands, and more effective merchandise and sales planning. The main advantage of merchandise hierarchy is that it lend to well-calibrated sales forecasting. With careful planning and analytics, retailers can get to know which are fast-moving consumer goods, and avert ‘stock-outs’. Conversely, it also allows the retailer to know which are slow-moving goods, and reduce inventory to save time, space and money. With the top-down reporting, it becomes even easier for the retailer to get actionable insights.
Also, merchandise hierarchy, along with data insights, can reveal which item sells with what, so that the items can be ‘bundled’ to give greater value to the customers, while increasing the basket size for the retailer. In the end, it’s a win-win situation for both the customer and the retailer.
A retailer with well-structured merchandise classification has a complete view of products across multiple levels and is able to drill down and analyse data in a variety of ways suitable to their specific business requirements. And with Cloud agility, a retailer is not bound by any infrastructural hindrance of traditional IT set-ups as it lends a unified view of merchandise operations.
The benefits are also reflected in better integration with supply chain partners, and improved coordination between retail planning and production, which in turn leads to a reduction in production costs and inventory requirements.
With Merchandise Hierarchy, a retailer gets:
- Deep insights into historical merchandise performance
- Forecasted projection of future merchandise performance
- With flexible or multiple merchandise hierarchy, a retailer can take advantage of seasonal sales, trends, festivals and the like.
Merchandise Hierarchy enables retailers to boost sales, increase margins and reduce inventory costs by improving performance and efficiency of their allocation, store-replenishment planning, and buying functions. iVend Retail on Cloud helps its clients achieve success through its integrated suite for merchandising hierarchy, assortment, store planning, and replenishment applications.
iVend’s integrated merchandise management also provides retailers with accurate information from purchase to payment. iVend Retail on Cloud from CitiXsys Inc, accomplishes everything that a flexible merchandise hierarchy system requires it to do and, as a true multichannel-ready Cloud application suite, addresses all retail touch-points such as front-end POS operations, inventory, merchandise hierarchy, customer loyalty, data and analytics, eCommerce/ mCommerce, and reports, in one suite of applications.