50 Key Industry Knowledge for Fashion Merchandisers

In the dynamic world of fashion, success relies on a deep understanding of the industry’s intricate workings. Fashion merchandisers play a pivotal role in shaping trends, curating collections, and driving sales. To navigate this ever-evolving landscape, a firm grasp of key industry knowledge is essential.

This article delves into 50 critical concepts that every fashion merchandiser must master. From deciphering the nuances of product and merchandise differentiation to comprehending sales cycles, business models, and the art of effective planning, this compilation serves as a comprehensive guide for those seeking success in the world of fashion merchandising.

Whether you’re an aspiring professional or a seasoned expert, these insights will illuminate the path toward informed decision-making and strategic excellence in the realm of fashion retail.

1- Difference Between Product and Commodity

A product is from a production perspective; a commodity is from a business transaction and market perspective.

Products are functional-based, and commodities are demand-based. Products are tangible concepts, commodities are abstract concepts.

2- Single Item: Refers to an individual product

Any product mentioned individually can be termed a single item.

For instance, a piece of clothing sold separately is a single item, while a set of sportswear sold together is also a single item.

3- Image Merchandise

It represents a season’s theme, highlighting fashion trends. Often used for display purposes, combining fresh design, materials, and colors. It strongly suggests and advocates a lifestyle. However, it’s challenging to predict for highly fashion-sensitive consumers.

4- Best-Selling Products

Goods that performed well in the previous season, incorporating some trendy features.

Often targeted for heavy promotion.

They have a clear, easily understood wearing occasion, and high market demand.

They are expected to sell well with moderate profit and risk.

5- Evergreen Products

Consistently sell across seasons with minimal influence from trends. Usually, classic styles and categories are presented as individual items. They offer versatility, easily combined with existing wardrobes. They have stable sales growth expectations, lower margins, and moderate risk.

6- Improving Profitability

① Increase sell-through, and reduce inventory.

② Offer reasonable promotions without damaging the brand’s image or store IP.

③ Maintain excellent product quality to minimize defective items.

7- The core of a Product

The core of a product is profit.

Profit should be understood dynamically, profit + turnover rate * profit margin.

Therefore, when formulating product strategies, attention must be paid to the category and pricing.

8- Marketing Planning

Designing various marketing initiatives around the brand’s market and consumer understanding.

Includes market analysis, product analysis, marketing analysis, and more.

9- Product Planning

Specifies the structure, style, and requirements of a season’s merchandise, primarily for internal use by designers, provided by the product department based on the previous season’s performance and market trends.

10- Basis of Product Planning

Consumer groups and brands are the two main foundations for product planning.

Product planning must be based on customer understanding: purchasing power, preferences, age group, etc.

11- “5 Right Principles” of Product Planning

① Right Product: Favorite by customers, meets quality, trend, and convenience.

② Right Time: When customers expect it.

③ Right Quantity: Appropriate amount.

④ Right Place: Right display location.

⑤ Right Price: Most acceptable to customers.

12- “Left Brain and Right Brain Thinking” in Product Planning

Left-brain thinking is data-related and rational.

Right-brain thinking is creative and abstract, based on rational abstract ideas.

13- “Category Structure” in Product Planning

It generally refers to the types, numbers, and proportions of each category.

Specifies how many categories to develop, the specific categories, and how many styles each category comprises, as well as their proportions.

14- “Category Structure Strategy” in Product Planning

Determining the structure and pricing level of categories.

Should clarify the number of categories and which are the main focus.

A brand must have a flagship product or category to leave a deep impression.

15- Determining “Categories” in Product Planning:

① Trend direction.

② Consumer recognition of the brand.

③ Competitive advantage.

16- Determining Proportions of Clothing Categories:

① Based on the target consumers’ dressing habits and experiences of competitive brands.

② Based on the sales composition of clothing categories in the previous season or the same season.

17- Proportions of Styles in Product Planning

Specifies the proportion of planned product styles. Includes determining the proportion of product composition, clothing category composition, and proportion of sub-styles under a customer category.

18- Primary Responsibilities of the Product Planning Department

① Managing financial operations related to products.

② Developing sales plans centered around products.

③ Breaking down quarterly sales targets into a series of single-item product data.

④ Identifying parameters to enhance product competitiveness.

19- “Labels” in Product Planning

Divided into natural labels and product labels.

Natural labels are general perceptions and inherent attributes of products.

Product labels reflect the product’s type/category from the consumer’s perspective.

20- “Product Operation Labels”

Includes operational labels and product lifecycle labels.

21- Two Dimensions of Product Operation

One is time-related, the other is quantity-related.

22- Differences Between E-commerce and Physical Retail

The primary difference is the consumer scenario.

23- How to Subdivide Broad “Categories”

With the inclusion of e-commerce, the traditional meaning of “categories” has broadened.

Subdivisions can be flexible.

For example:

① Based on the style, e.g., pants – low waist, mid-waist, high waist…

② Based on function, e.g., hiking pants, yoga pants, jogging pants…

③ Based on the occasion, e.g., home, light sports, social, travel…

④ Based on consumer trends, e.g., UV protection clothing, pet companions…

24- Fundamental Indicators of Product Management

Purchase status (quantity and amount), sales status (quantity and amount), inventory status (store and warehouse), sell-through rate, gross margin, product structure, order, and sales deviation.

25- Critical Factors in Product Management

① Scientific and reasonable procurement plan.

② Store sales management.

③ Daily stock adjustment.

④ End-of-season clearance planning.

26- Listing Wave

Refers to the timing of launching new products in stores. Often used for sales and replenishment planning, as well as brand product development.

27- Effective New Product Launch Planning

① Understand the listing wave schedule for the new season.

② Plan according to market conditions, temperature, consumer preferences, etc.

③ Distribute new and existing items logically based on the previous season’s performance and market trends.

28- Product Lifecycle

The time a product spends in the market from launch to obsolescence.

Divided into four stages: introduction, growth, maturity, and decline.

29- Expected Sell-Through Rate Trend Across Product Lifecycle

Introduction phase (1-2 weeks, 5%-10% sell-through);

Growth phase (3-5 weeks, 15%-30% sell-through);

Maturity phase (6-9 weeks, 35%-60% sell-through);

Decline phase (10-12 weeks, 65%-80% sell-through) – these are based on general data and vary.

30- Clothing Lifecycle

A general rule of the fashion industry is that fashion devalues by 0.7% daily from its market launch date.

Specific lifecycles vary; for example, short-sleeved spring garments have a short lifecycle, wholesale for 10 days, and retail for 1 month.

Generally, spring and fall fashions have shorter lifecycles, while summer and winter fashions last longer.

Denim, formal wear, and similar items have longer lifecycles due to their relatively unchanging styles.

31- Lead Time

The time from placing an order to when goods enter the production line.

Crucial for buyers dealing with traders.

32- Sales Cycle

The period when a batch of goods is sold. Short for fashion items, long for sport and leisurewear.

Poorly matched items have shorter sales cycles, while well-matched items have longer cycles.

33- Fashion Seasons

Retail Peak: April to end of June, October to New Year.

Retail Off-Peak: 3 months after New Year, July to September.

Wholesale Peak: March to May, September to November.

Wholesale Off-Peak: 2 months after New Year, June to August, before and after the New Year.

34- SKU (Stock Keeping Unit)

The smallest inventory unit for sales. In clothing, it represents variations in size, color, and style.

35- SKC (Single Kind and Color)

Refers to a single style in a single color.

Used in garment industry management, originally from manual stocktaking, gradually replaced by SKU for modern detailed management.

36- Difference Between SKU and SKC

① Different meanings:

SKU is the smallest inventory unit, used for data management, sales analysis, etc.

SKC represents a single style in a single color, used for communication, planning, and development.

② Different recording methods:

Each SKU has a unique code.

SKC originated from manual stocktaking, indicating how many of each style and color there are.

37- Block and Style

“Block” is a clothing design, mainly referring to differences in design and fabric use.

“Style” includes design, fabric elements, and specific color representation.

38- Block and Pattern

“Block” represents the style or silhouette of a garment, initially designed by a designer.

The pattern maker then turns the block into a pattern, which becomes the “pattern” of a garment.

39- Style Quantity Requirement

The number of new styles needed for a sales period.

Typically, it starts at the beginning of the sales cycle when new items are introduced to stores.

40- Supplemental New Styles

Additional styles are required within the sales cycle based on holidays, promotional plans, or market demand.

May include a series of products tailored to a specific holiday or promotional initiative.

41- Style Proportion (%)

The percentage of styles launched in a specific sales cycle compared to the total styles for the entire season.

At the beginning of the sales cycle, new styles are relatively few as the previous season’s items are on sale.

The proportion of new styles gradually increases and decreases as the season ends.

42- Designer Brand Model

Designer brands are personalized, niche brands that position themselves for specific consumer groups and lifestyles.

They are designed by individual designers, often reflecting strong personal and experimental elements.

These brands are defined by their designer’s distinctive style.

43- Fashion Boutique Model

A single store that collects products from multiple brands under one name.

The range can include clothing, shoes, bags, jewelry, and watches, each representing various styles and design concepts.

44- SPA Business Model

SPA stands for “Specialty Retailer of Private Label Apparel.”

The company owns the brand and handles everything from product planning, design, production, and retail.

45- F2C Business Model

Goods go directly from the factory to the consumer, bypassing intermediaries.

F2C stands for “Factory to Consumer.”

46- Showroom

A space used for displaying products for sales or orders.

A critical bridge between designers and buyers.

47- Concept Store

A store specializing in selling creative design products, providing a creative shopping environment and a cultural shopping experience that leads to fashion trends.48- Flagship Store: The largest, most comprehensive, and luxurious brand store in prime locations. Usually only sells one type of product or a single brand’s products.

48- Flagship Store

The largest, most comprehensive, and most luxurious brand store in prime locations.

Usually only sells one type of product or a single brand’s products.

49- Classification of Commercial Formats

Class A malls: Generally have high rebates and guarantees.

Class B malls: Typically have low rebates and high guarantees.

Class C markets: Often based on rent.

50- Bulk Management

Identify and utilize commonalities in clothing production and operations, simplify processing models, implement flexible production processes, streamline supply and sales processes, and enhance product differences while emphasizing rational differences.

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