Put Merchandise Financial Planning First
Merchandise financial planning should be the epicenter of your retail planning process. Retailers that drive internal decisions and processes around financial targets perform better and achieve more profitable growth.
Driving planning based on financial targets requires a workflow-driven and well-defined process including approvals and reconciliations. Targets should include sales revenue units, margin, promotional spend, markdown spend, open-to-buy and stock projections. Combined with the end-to-end process, these metrics guide all departments as they drill down into more detailed planning and then execute to those plans.
As an example, if during the retail planning process, a planner identifies a trend in a specific category, it can be incorporated into the financial plan. This trend could be missed in the merchandise assortment planning process if there isn’t one overarching financial plan driving the process. Having one version of the truth, as opposed to many disparate plans, guides all the planning processes for better decision making to ensure margins and sales targets are met.