The past few weeks have seen a great many changes, and some real ups and downs, from the excitement of appearing in the Sunday Times Top 100 Companies, to significant changes in senior management and a rollercoaster of emotion, a trip to Turkey to see some existing suppliers and some potential new ones, a few days in New York looking for SS16 inspiration, whilst my team scattered far and wide, scouring London, Copenhagen, Paris, and Antwerp for the latest ideas which we can incorporate into our product development for the new season. We have followed up with a trip to Scotland this week, to present High Summer ranges to our area managers, receiving positive responses all round, so hopefully this will herald the beginning of a very successful spring and summer season.
One thing that has become very apparent over the last few weeks, is how little awareness there is around the business of what the buying, merchandising and design teams actually do, and how professional they are in their approach. Being part of a buying team for a high street retailer demands 100% commitment; we work exceptionally long hours, regularly spend long periods of time away from our families, often working over weekends, sleeping on planes, spending time in factories in temperatures of 40 degrees plus, in some of the most deprived countries in the world. It is exhausting, carries with it a great deal of responsibility, not just for the delivery of product to our stores, but also for the sales and profit when it arrives, along with the welfare of all those involved in its production; not so much a job, as such, but more a “calling” – from which we rarely switch off; in order to do this job effectively, you have to have an absolute passion for it and be prepared to fully immerse yourself in the ups and downs that come with it.
A few years back, whilst I was teaching at the Retail Academy, I found myself in a similar situation with many of my students – they all had a keen interest in fashion, and loved the idea of working in a buying department, but had very little understanding of what the day to day would involve. I was asked many, many times about what it was really like to be a buyer, which inspired me to start writing a book about the subject. It has become a labour of love, and several years later, is still far from finished, which is testament to the fact that my job absorbs a great deal of my time, however, it did occur to me that I should share some excerpts from it in the spirit of helping to dispel some of the myths and give greater understanding to the rest of the business of what we actually do! So, with this post I am sharing a piece about the buying life cycle – this is a potted version of a complex process, within which there are multiple opportunities for things to go wrong!
I hope you enjoy it and that it gives you a greater understanding of a small part of the buying process!
The Buying Cycle
Buying follows a cyclical pattern, with the planning and budgets based on seasonal sales history and forward projections of business growth, but the process begins with finding the inspiration for a new season’s range.
It is likely that you will be in different stages of this cycle, for a number of different seasons, at any one point in time, for example reviewing sales and trading SS2015, whilst working on production for AW2015, and doing inspirational shopping and planning for SS2016. Being a buyer really is the ultimate multi tasking challenge!
1. Inspiration for a new season’s range will come from many sources, the high street, reviewing the catwalks, trade fairs, magazines, trend forecasting agencies, and, frequently, the people around you and the places you visit. There are other, external influences, such as the environment (pushing the trend for eco inspired ranges, organic and Fair Trade products, neutrals and a natural colour palette), films and TV (the series Mad Men has spawned a huge trend for 50’s silhouettes, a new Disney film such as Frozen has the potential to create millions in retail sales if managed well!), and music/celebrity icons. The process usually begins with visits to fabric fairs, such as Premiere Vision in Paris, and, for knitwear, the yarn show, Pitti Filati in Florence, Italy, as well as seminars with the major trend forecasters, eg. WGSN, Mudpie (MPD Click), Donegar. The trade fairs consist of halls filled with stands where fabric suppliers will show their new season’s ranges to prospective buyers. The majority of high street retailers will order swatches, or fabric hangers, of the designs and fabrications they like, which are then sent on to their offices, to be incorporated into planning and development. Additionally, there will usually be areas within the fair which exhibit colour trends, fabric trends, and print design, as well as seminars by many of the major trend forecasters. Some retailers might actually place orders for fabric, or buy specific print designs at these shows, in order to gain exclusivity on particular fabrics, ensuring that no-one else on the high street can have the same print design. At this point in the cycle, buyers and designers will also be shopping the high street, both at home and abroad, for ideas – visiting everywhere relevant from high end designer, to independent boutiques, department stores, brands and mainstream retailers, as well as trawling the internet. Having accumulated all of this information, the design team will begin to create their themes/looks and colour palettes for the season – frequently this process will have started prior to any shopping trips, so that buyer and designer can shop for samples/ideas which fall in to the categories/looks that are being planned. These themes and colour palettes will then form the basis of the product design – displayed on boards, through key images and colours, which demonstrate the look and feel of the product range. Creation of these design boards is one of the most critical parts of the product development process – giving the whole team a vision of how the finished range could potentially look, incorporating the appropriate trends, and ensuring that everyone is working towards the same end. The finished trend boards will then be used to begin working with the buying and merchandising teams, who will start to allocate options and a part of the budget to each trend, look or product phase. The boards might also be used in briefing suppliers, who can then use this information to start sourcing fabrics and, in many cases, creating designs and ideas of their own to show the buyer. If a supplier has their own design team, they will also be completing this process in tandem with the retailers, so that they too can create trend boards, designs and suggestions for discussion with the buying team. The key to making these trend boards productive is customer understanding – ensuring that they direct the teams in the right way to allow them to interpret the trends, colours and styling in a way that is appropriate for a particular retailer and their customers. Some retailers employ an external agency to provide this service, or to support their own designers, but in most cases a retailers own design team are the best placed to develop this early direction, giving their individual spin on the trends which the rest of the high street will also be picking up on. This is the best way to keep own brand ranges unique and ensure the best chance of a good customer reaction.
2. Planning begins with buyer and merchandiser reviewing the previous season, looking at sales performance at every level, starting with the top line department figures, and then drilling down to sales by product category, and then each individual item, looking at the best and worst sellers and assessing which styles can be updated and “moved on”, where there needs to be “newness” and which core lines need to be maintained. The team will look at each category, deciding where they believe there is growth potential, which might be as a result of previous sales, or because a product type is particularly on trend for the coming season. The merchandiser will pull all the figures together looking at sales potential this year versus last year, and working with the head of merchandising to agree the budget/sales plan, margin targets (how much profit needs to be made), markdown budget (how much stock we might have left and how much it will cost to mark down for the mid or end of season sale). This process will continue throughout the range development process, to create a framework for the number of options (styles) the department needs for the season, as well as working together to decide on selling prices, and volumes (how much of each style to buy). Meanwhile, the buyer will also continue to work with the design team to assimilate and pull together all of the information/samples, and using the design boards created during the inspiration process, to begin working up each individual style within the range. This will be a combination of totally new style ideas, complemented with adaptations of previous bestsellers, updates on core styles and key commodity or flow lines which the retailer will endeavour to keep in stock at all times – outside of these commodity lines it is rarely a good idea to run exactly the same style two seasons running, regardless of whether it is men’s, women’s or children’s wear. The customer will get bored with seeing the same products, and eventually sales will start to fall; a good buying team will strive to constantly update and move things on to ensure that sales figures are either maintained or growing.
3. Sampling – at this point the designer will develop a design or “tech” pack for each style, incorporating all of the details required to turn their sketch/idea, into an actual garment. This too, is a critical part of the development process – the more detail that goes into this pack, the more likely it is that the sample will actually look how you envisaged it. The pack will consist of an annotated sketch (usually created on a CAD system, using one of a number of design software programs, but might also be hand drawn), detailing style, trims, buttons, zips, lining, any specific measurements (such as pocket dimensions etc). Additionally, designs for any prints or graphics will be included, specifying detail on type of print, or, if embroidery or appliqué designs, the fabrics and thread types to be used. Also included will be a size spec, created by the technologist, usually working in conjunction with the designer to ensure that garment proportions meet the expectations of the buying team. In some cases, the pack may also include swatches of fabric for quality and texture, or a bought sample to demonstrate a particular styling detail. It is also important, at this stage, to include colour swatches or Pantone colour references – Pantone colours are an industry standard that the majority of retailers and suppliers use for consistency of colour. The whole pack, for each individual style is sent to the relevant supplier for sample development. The buyer will decide which supplier or suppliers will be suitable manufacturers for each garment and packs will be sent out accordingly. The reason for sending to more than one supplier is to ascertain which source will make the best interpretation of the design pack to give the buyer the product they want, but also to get a comparison of the cost from a number of suppliers, a process called “cross costing”. Time taken to make the samples varies depending on the complexity of the product, and where it is being made, and how busy the suppliers sample room might be, but is usually around 3-4 weeks for overseas suppliers, and may be less if the sample is being developed in the UK. It is worth noting, however, that the majority of retailers are all developing product for a particular time period in store, at roughly the same time, so sample rooms tend to have peaks and troughs in sample development, and sampling can often, therefore, take longer than planned. A skilled buyer will work very closely with the design team to ensure that packs go out in good time to get samples back for the relevant meetings. Just how quickly those samples come back can frequently depend on the buyers’ relationship with the supplier, their powers of persuasion and encouragement, along with how much the supplier values that particular buyer, or retailers’ business. The buyers assistant will usually be responsible for chasing up suppliers to ensure that their samples come back in a timely manner, in order for the team to then work with the finished samples in the next stage of the process.
4. Range building – once the samples start coming back from suppliers, the buyer, designer and merchandiser will work as a team and start to range build, comparing samples and prices from the various different sources, and working out which tops go with which bottoms, and what then layers on top, to create a coherent range of outfits. There are a number of critical factors to think about when range building as follows:
Colour palette – how do all the colours go together, now that you have all of the samples back. You will not always necessarily get sampling all in the correct colours, so this might entail using a considerable amount of imagination, to visualise the overall look!
Samples – what looks good and what does not! It is often the case that a design which looked great on paper, does not look nearly so fabulous in reality. A good buyer will know when to walk away, but can also see where there is potential to further develop a style, and may want to re-sample to try and make improvements.
Customer – is each product appropriate for your target customer? Buying is not about your personal likes and dislikes, but whether, as a buyer, you have the skill to interpret your customers’ needs, and develop product which that customer will want to purchase. If you are buying women’s wear, you may well be buying product for women similar to you in age and style, but you also need to factor in their lifestyles, income and consequently their spending power, as well as their needs in terms of quality, fashionability and practicality. If, for example, you are buying children’s wear, you need to get inside the head of both mum (with younger children), but also, the children themselves, as they get older – what are their likes and dislikes?
Outfit build – which tops relate to which trousers and skirts, and are there enough of each? As a general rule, you would want 2 or 3 tops to go with every bottom, but the buyer would also need to consider how other items also worked into the outfits, eg. Knitwear, dresses, jackets and coats etc. This is complicated enough on a multi product department, where one buying team is responsible for buying the entire product range, however, in many retail businesses, clothing is bought by product type, meaning that the buyers and designers have to be expert communicators, and very effective at working as a team, to ensure that the total product range works well together.
Price architecture – what retail selling prices are you going to propose for each item and do the prices relate consistently to one another? Is your price structure in line with previous ranges, or other product that is already in store? Additionally, most retailers look to their buyers to propose a good/better/best structure within the range, ensuring that they are covering core basics(good), through to fashion must have’s(better), and key, top of the range, press worthy pieces of the season(best). As the market place becomes ever more competitive, it is also crucial that each piece demonstrates value for money versus the competition.
Store display and ranging – how will the range be displayed in store, which products go to all stores, and which are restricted to mid ranging stores, or to the best/top stores only. Again, this is a careful balancing act, with the top performing stores generally being larger and in better locations, these can cope with all product lines, from core basics to high end fashion. The skill in product ranging, is to ensure that the smaller, less successful stores still have exciting and fashionable enough product to entice the customer in, whilst minimising risk of product failure, and keeping stock levels tight, so as to also minimise spending on markdown.
Options and space – how many lines can each grade of store fit out on the sales floor? Some retailers prefer to plan to space, others are more relaxed about fitting out extra items, but essentially this is driven by the budget each team has to spend, and the volume of stock needed to service each store. The merchandiser will work with the allocations team to ensure that each store has the optimum number of options, and the right quantity of each of these options in order to maximise full price sales.
Ranking – many retailers employ a process called ranking, which basically ensures that the team rank a range of products they are planning to buy, from what they believe will be best to worst, and then de-selecting the ones that have been ranked as worst. This has two main outcomes – it frees up stock and space for OTB (open to buy), leaving money in the pot to buy additional items closer to the season, and, in theory, reducing markdown by only buying into products which will hopefully be best sellers. Of course, buying teams don’t get it right every time – there can be many factors affecting whether a product is a best or worst seller, but with all the time, effort and research which has gone into every style, the best sellers will hopefully outnumber the worst by some margin. Just be prepared to accept some abuse over the worst sellers – there will always be numerous other people who have an opinion on the product you are buying, and plenty who will think they could have done it better!
Windows and marketing – at this point in the process the buyer might also start to identify key window lines, or press and advertising lines, and will be discussing this with the merchandiser to ensure that enough volume is bought to satisfy customer demand after publication of any magazine or TV ads. This is also the point at which any promotional activity for a product or group of products should be finalised, in order to allow the buyer time to negotiate the best possible price over an increase in volume.
5. Selection and sign off – again, this process will vary from one retailer to the next, but it usually consists of a “pre-selection” or “pre-sign off” meeting which will involve the buyer, merchandiser and designer, presenting their plans to the heads of buying and merchandising for approval. The meeting usually takes the form of a presentation, with the merchandiser going through all of the financials for the phase/season, or time period, dependant upon what actually needs signing off and orders placing. The designer will present colour palettes and storyboards in order to set the scene for the product which has been developed. The buyer will then present the range, going through each item and explaining the garments, any proposed amendments or changes to each style, the outfit builds, the pricing structure, margin and with which supplier/factory they plan to place each order. The key to success in these meetings is belief in the product you are presenting, confidence in your own ability to develop a bestseller, knowledge encompassing every detail about each garment – cost and retail prices and where it will stand against the competition, product design details, which country of origin and supplier is best placed to make it, how many stores it will be sent to and why, how it will look instore against all the other product around it, what marketing material/labelling will be needed to support it, whether it is worthy of appearing in the window and so on. As a buyer presenting in these situations, you really need a confident presenting style and to know your product inside out – knowledge is power, and in order to create a powerful impression, it is essential that you are prepared for any question which might get thrown at you. There is frequently a great deal of discussion and debate around the product range and there is often a lot of work to do after this meeting, implementing any changes made by the heads of department, adjusting the financials, re-sampling and in the case of a particularly bad meeting, a complete re-work of the range. Hopefully, this will not happen too often – during my time as a buyer I found it very beneficial to manage the expectations of my head of buying by “drip feeding” information prior to the meeting, and showing samples as they come in from suppliers, so that I have a pretty good idea of what will be approved, ensuring that I went into the meeting with only the strongest range possible, and, hopefully, minimal amendments to make afterwards. Following on from this the revised and improved range will be presented to the buying and merchandising directors, for final sign off, at which point, anything or everything could, of course, be changed again!
6. Placing orders – having negotiated prices whilst all of the above is going on, and in many cases, travelled to meet key suppliers to negotiate face to face, the buyer is now in a position to confirm orders with suppliers, ensuring that they can meet the required delivery dates. This is usually done by email, and then followed up with the sending of an official “PO” (purchase order). Some retailers have highly automated systems to manage this process, and others are as straightforward as a typed order, with all the product details confirmed in writing. The most important part of the order, from the suppliers’ point of view is the quantity and size ratio for the order, ie how many of each size does the buyer require? This information will enable the supplier to accurately order the right amount of fabric, and quantities of trims, labels, buttons and other accessories. If the costing has proven to be particularly difficult, a supplier might ask for the size ratio prior to confirmation of the cost price, in order to make any price quote as accurate as possible.
7. Managing critical path – this is a major function in the role of the whole buying team, working together with the suppliers to ensure that all garments are correct to the buyers’ specifications and agreed price, and that delivery happens on time. The critical path will be covered in greater detail at a later date.
8. Fitting and sealing – each garment is fitted on the appropriate model, which could be an actual person, or on special mannequins, with standard body measurements. Once a first fit sample is approved, the supplier will make a “size set”, consisting of one of each size to be produced, which will then also be fitted and approved (sealed) before production commences.
9. Production – once the supplier has received approval, production can begin, in itself a complex pattern of processes which will be covered in more depth later.
10. Shipping – once the garments are completed, they are packed and sent to their destination, travelling by road, sea or air, dependant upon their location at source, where they are being despatched to, and how quickly the retailer needs the stock.
11. Delivery – the final stage in the process is delivery of the stock to the retailers’ warehouse or distribution centre, from where it will be despatched to stores.