Latest / Exploring Fashion Futures With Dr.HB / Merchandiser: The Heart of the Fashion Business I Dr. HB Fashion Futures Podcast Episode 13
Transcript
- dr hb 5a done by mehr: Hi, welcome to my podcast, Exploring Fashion Futures with Doctor H B. I created this podcast about a month ago to bridge the gap between the fashion industry professionals and the fashion students in college My name is Dr. Jung Ha-Brookshire I'm a professor and the department chair of textile and apparel management at University of Missouri. Over the last 20 years of my academic career as well as 10 years as a sourcing manager, I have learned so much about this industry as well as through my alumni and friends in the industry. And they share so many valuable experiences and lessons. And there isn't any good way to transfer those knowledges and wisdom to the college students directly. So this here we go this is the podcast. today we're gonna talk about the role of director of merchandising for whether it's a major big companies or medium sized company, a fashion company. Because we talk about this merchandising a lot and each company's, you know, they have their merchandising roles. slightly differently. it could be sometimes a little confusing. We talked about the definition of merchandising, which was, you know, planning, presenting and developing product assortments and product types, and then presenting that new product assortments to whoever stakeholders that they have. We talked about it at the episode a couple weeks ago when I was talking with Zoe who was who is a visual merchandiser. So how merchandisers are different than visual merchandiser? We talked about that. Zoe talks about how she her visual merchandising roles fit within this whole mega fashion systems. Meantime fashion merchandising. So merchandiser for typical fashion company companies, they do more than just visual merchandising. They really select what kind of products for, how many shorts and pants and sweaters and dresses I'm gonna have in this season for these particular buyers or for that kind of particular, retail environment. at the same time, our very first guest who was Molly She it was basically a sales. So as a salesperson representing the brand with the title of accounting executive, she mentioned how she works with merchandisers in her company. So we all kind of know about what designers do, what pattern makers do, because the titles are pretty intuitive as to what they do every day. Salesperson, obviously, they're selling. What do they sell? That's different, right? So are they selling to Another company, B2B setting, that's where wholesale sales comes in. Or are you selling directly to consumers at the retail sales setting that makes the retail sales? So, but merchandisers can be a little different depending on you know how each company is organized. today we're going to talk about what director of merchandiser or merchandising does so that we be better prepared. Prepare for next week's guest, Rachel Ripley. And she has had this director of merchandising position for several years. And she will talk about how she became the director of merchandisers and in her mind, how merchandisers are different than sales or designers or a production or sourcing person. So, in preparation for that episode, today, we're gonna talk deep dive into director of merchandising. So let's think about process first. So let's say we need to get ready for selling new collection of our brands for next year's Mother's Day, So whether I'm a retailer or typically at a brand side of it. So I have the brand, let's say Calvin Klein brand. And we wanna get this Mother's Day collections ready, right? So then somebody has to come up with what's gonna be the market theme and what's gonna be hot, what's gonna be popular in May of next year. So whether that person, you know, some companies or are organized based on power of designer. So if designers' names are so powerful or Designer is the brand, like for example, Donna Karen's case. You know, Donna Karen was the brand. Like she actually did design and sell and merchandise and everything. some brands or companies are very designer driven. Some other companies are company driven. It's more of a company as a as a whole, like for example, anthropology. Nobody knows who the actual designer name. We can find out who the designers are, but anthropology as a company didn't, you know, start with or centered on a person's name, right? regardless how each company is set up, whether it's you know designer-driven company or merchandiser-driven company, what that means is Merchandiser will tell the design team and saying, We believe next year's Mother's Day collection should be like this. This should be our stories, how our brands should talk about their stories. These are the color schemes. These are the assortment plan, meaning we're gonna have shirts and shorts and dresses and you know, whatever product categories are. We're gonna have this many. So design teams. Please design to this vision and assortment, right? Whether the vision was, you know, pastel, flower like, happiness, green, potpourri, right? if the merchandisers give that task to the design teams, then that design team will, okay, our brand's target customers are looking like this. They're They like this type of silhouette, that type of fabrics, because you already know about your brands, right? So then they actually design to that merchandiser's request to relay that vision of the trend as well as to meet all that product categories that merchandiser is planning, right? You know, how many t-shirts, short sleeves and long sleeve blouses and you know, one piece dress and pants suits. Send one that right. So merchandisers, meantime, they go back to last year's sales. What have we sold in Mother's Day week last year? They will study about like this style, this color was good, and these categories were good. And shorts didn't work because the weather was not good, or whatever that reason is, those shorts aren't good not good. So we're gonna drop this year. So The merchandiser decides the category and then tell designer we're gonna have a four pair of, suits and we're gonna have six different tops, four different pants and six different one piece dress. So if they give that assignment to design team and design team will design to that request. So that's that's that. Or the other s case is like designer is the brand. So I will design what next year's May Mother's Day collection would look like. designer comes up with all this design, and merchandiser then will go back in last year's sales. Hey, this type of design was good. That type of design may not be that good. So maybe we wanna drop it or produce very little amount, not as large amount like the other style. So merchandiser will merchandise to that design because that designer is the brand, right? But either way, in the example that I just told you, the merchandiser, what do they do? They do a lot of sales analysis. What happened last year, last three years, what happened in this store and that store, what sold, what didn't sell, what what sold out so quickly in the season. So we had we had lost the opportunity to sell more. Maybe we should have made more of this one piece dresses than compared to short sleeve tops, right? Things like that. So they have to look at the sales and data and analytical part of the business. Also, you have to look at what what was a good markdown. you sold them a lot, but everything got sold at a discounted rate so that you didn't really gain a lot of profit. Then what's the point of doing all of that, right? So what style sold the most at the full price, meaning without any discount, so that we made the most margin. What should we push more? When will be a good time to start? When do we replenish those products because they're selling well? So that kind of business and finance side of it. So total number of sales, total number of markdown, total dollars of gross margin, the selling season, markdown strategies, things like that. merchandisers are worried about. At the same time though, they also need to know about the products So if you only look at the Excel all day long and numbers all day long, you don't really know why this number is going up and down or last week it was really hot. This week is zero, what's going on? you don't know that stories behind the numbers if you don't know the products. The products also as a merchandiser of a big brand, you should have those eyes, like, are we representing our brands through these styles and silhouettes and colors and stories? merchandisers do have a big say in design, design team and what kind of design we should focus on, at least the silhouettes, whether it's gonna be prints or, you know, solid or or patterns or things like that. So merchandisers are truly in between basically the sales. So they don't really sell them because they really organize the collection by assortment planning it, by making plans for sales and making plans to earn margin. merchandisers are typically in between salesperson who's really like, you know, they're not really into what should be designed and made. But their job is really, I know what we're gonna designing and making. So I need to find a way to sell. So that's the account executive And then merchandisers there. And then they're also working with design team as to what to design and how to design so that our target customers will be resonating with This design that we're gonna have next year, right? merchandisers are in between the product and business. While merchandiser really has an idea, an opportunity to dictate or determine what to design and make so that sales can sell. And so it's really in between you really have to use both right and left side of your brain and both creative and analytic skills. So that's typical director of merchandiser or assistant merchandiser, associate merchandiser. Any merchandising title will work in between product and sale. Let's talk with Rachel next week to learn about what she really does every day and how. how she became the director of merchandiser where she is today, so that you you all have an opportunity to vision yourself. I really like the idea of doing both, both creative and analytical work. So how can I get there? So that will be a, you know, everybody has a different path, obviously, but we can learn from Rachel's pathway to see what kind of skills and knowledge she had to collect on the way to get there, right? merchandisers are the actually the most unique roles that fashion industry has that other industry typically don't have. If you think about it, hospitality management or advertising or PRs world. There aren't many industry that has merchandisers. Because merchandisers are you really unique to fashion industry because the fashion we have so many SKUs you know, like even if it's a one black t-shirt, you have size two, size four, size six, size eight, size ten, twelve. I mean, one style might have, you might even have ten different SKUs because of different sizes. But then this black shirt. might have ten different colors, then ten by ten, it's already hundred SKUs right? Just one style. Then you might have ten different silhouettes. So the styles, that's gonna make easily it goes up to the ten thousand SKUs So the merchandising role is very unique in the fashion industry and it's a very I would say, I don't wanna say AI proof, but but it's very hard for others to quickly learn, meaning it takes a lot of years and knowledge and efforts and experiences for you to be the truly director of merchandising. So I can't wait to learn more from Rachel next week. So I hope all of you will join us. Having said that, I also want us to discuss about licensing business. Because, you know, unless you only make the design or products that you have your own copyright, you will probably use somebody else's intellectual copyright to make your clothing and umbrella and and so forth. Let's think about this again. let's think about Disney Mickey Mouse t shirts, okay? Or Spider-Man's or whatever the Disney movie. When the Spider Man just comes around, you will see all kinds of different Spider-Man characters on all kinds of different product category from sleepwears to children's wear to resort wear the adult clothing to also umbrella sometimes to shoes to sometimes wallets sometimes I don't know notebooks and stickers and pens and pencils and they might all have this Spider-Man copyrighted product. in this whole marketplace, right? So does Disney really produce all those shoes and clothing and pajamas and pencils and umbrellas and watches? No, they don't. Instead, they control the copyright, which is the character of Spider-Man and the story of the Spider Man, the movie. They control that intellectual property and then they give a license To another company for them to be able to make whatever product that they're proposing. Like for example, okay, Company A, you get to make all the umbrellas in North America. So you are my only umbrella making company using Spider-Man character. And so let's have a contract. And this way nobody else, if somebody else ever makes it, we have we have an intellectual property law. So we can go after you're the only supplier. Same thing. Company B, you are the only supplier who can make Spider-Man sleepwears for children's category. Not the adult category, but children's category only. Like pajamas only or whatever it is. So that they have an exclusive right to use Spider-Man character to make whatever product that they want to make and sell, right? So now. In return then, why would Disney have that kind of contract with all kinds of companies? I mean, don't forget, they the I mean Disney itself may have a hundred, five hundred different licensees. What what that means is the the company who uses these their intellectual property rights to make all kinds of different products, So they have 400, 500 different licensees and Disney is a licensor. So then that those contract, the licensing agreement will tell you what you can do or can't do. And then in return, you have to pay me certain percentage of your sales as my royalty. So for example, you company A. by you using my Spiderman character and you earned you generated 10 million dollar worth of sales in North America by selling umbrella, then give me 10 for those, 13 for that, 30 for that, whatever that percentage you negotiate between licensor and licensees. So obviously when the brand has a really powerful like a brand power, those percentage goes higher. I mean, you know, everybody wants the character because I know I can sell as soon as I have it. So there are people are willing to pay more to have that exclusive right, right? but the brand name is it's good enough but not so strong, then the percentage will go lower either way and all those kind of royalty rates are actually kind of, you know, trade secrets. 'Cause If ev everybody knows it, then they're gonna try to get it, right? So it's kind of secret, it's only contract based, it's company by company, depending on the brand power. So you have this licensing agreement. with that agreement, then the company A will design umbrella or, you know, whatever product they had an agreement on and use that to sell to let's say Macy's wanna have a Spider Man umbrella. the only option is to go to Company A to place an order and make and then buy so that Macy's can sell Does it make sense? So they don't really Macy's really doesn't go to Disney to say I I want a like Disney umbrella. They don't buy from Disney. They're buying from Company A, who is Disney's licensee for that umbrella, right? Rachel will tell you she, you know, her company has licensing agreements with this type of brands or or brand identity or entity. So it's kind of really fun to learn about their brands and then use their logos and identity to make this type of products to sell to the whole customers and consumer group. that's really also a very interesting thing that we can learn from. I look forward to really learn from her and not only learning about her journey, how to become the director of merchandising today, but also, you know, how did she even know that's what I wanted, right? Like I know a lot of you because I'm in college campus every day, students just it's just too many sometimes opportunity. I don't know where to go. I don't even know where to start because There's just so many way, so many opportunity at the same time I'm not sure what to pick. Rachel's you know, I've known her for a long time and I've always admired her tenacity and commitment and work ethic. So let's learn from her next week and I can't wait to learn from her before I finish our episode today I wanted to talk about There was a question from last week's episode about I think it was from Chill Cozy journal. And for someone stuck between styling and visual merchandising, what's the clearest sign visual merchandising is the better fit? So I think this cozy No, chill, cozy journal. she left this question after the episode of Zoe Bednar, who's visual merchandiser for luxury watch company. And after she listened to her she or he listened to the episode and you know what what kind of skill set you should have if you want to be a visual merchandiser. And so she left that comment. So how do I know if the VM is the right route for me instead of styling, right? Zoe specifically said styling is for you're styling for one person, that one person, one client that may have a different taste and vision and character. And then you might have 10 different clients and all 10 are different. So that means every time you style them, 10, you know, whether it's a one client or 10 clients, you have to completely immerse, be immersed in That one person's world. You really need to understand that person's world, the psychology, the confidence, what they like, what they don't like, so that you can recommend the best style. What what might look good on you or or client number three doesn't matter. This client number one has to like that. So really more about one-on-one psychology. one-on-one relationship, truly, truly understanding who this person, your client is, so that you can have the best support for them. But the visual merchandiser, you don't do that for one person. You do that to your brand. For your brand. You visually merchandise all these products for your brand. Each company, each your brand has their own mission, the reason to exist, the the the who they are. And so you really merchandise them, visually merchandise them to reflect that company, the brand's identity, not for one or two or three or four people. And then those your client may change every other day or every other month. So that means you have to completely change your psychology or your attitude and everything else and it's it's gonna take some time to get to know each of them so you can truly represent that your client's styling while visual merchandise you do it for your company's vision, company's identity, company's mission, and company's target consumer. So it's it's a lot different. if you like one on one relationship, one person like you're you're very good at making friends. You're very good at understanding the other person's world. so that you can help your clients styling, that will be better for you. But if you are more in more visually creative but less into building relationship in one on one, then corporate visual merchandising will be better for you. So I hope this helps you and I look forward to continue to getting more questions from you and getting the comments from you. So I'll see you next week and and and again drop me your questions again and I'll get back to you shortly. So until then, thank you. Bye bye.