KEVIN: What is most important is to see how each SKU does on its own merit, but it is good to have home accents, jewelry, accessories, bath and both, food, music, cards & stationary, kids clothing and toys, books, etc. You do not it much more broad than that and you should pay attention to how departments do overall when you do item evaluation but don’t get stuck on the departments. Most of our shops are too small to really think about “departments” but it definitely helps in categorizing items and creating open to buy (OTB) based on holes you need to fill. It can also help control your buying in departments where you don’t need to be doing buying and keeping your SKU count under control.
(2) “Open to buy”?
(3) Accessories are ALWAYS best sellers!
KEVIN: How much you have to spend on a monthly basis which is determined by your current inventory valuation minus your needed inventory valuation for the following 3 months of sales (assuming 4 turns).
KEVIN: When you say accessories, do you mean bags/purses? scarves? jewelry? what else?
(6) How do you determine what you need for the following three months if you don’t have any history to go on? We’re finally coming up on our first anniversary but even so this summer won’ be anything like our start-up summer.
(7) We lump all the above in one group — but jewelry & scarves are the largest portion of that
(8) we defined accessories as purses, scarves, headbands, etc but kept jewelry separate.
(9) My prior inventory only allowed 6 categories, and I’ve never broken it down again.
(10) If you don’t have history that is hard but use your previous 3 months and anticipate as best you can what the next three months will be like based on other retailers sales curves or sales curves from your chamber or other local biz orgs.
(11) We’ve got jewelry on its own, bags and scarves are subcategories of accessories, and then everything else (headbands, hats & gloves, belts, etc) just falls under the main “accessories” heading.
(12) I’ve been adjusting our categories now that we’ve got several months of business under our belts. I started with broad categories (home dec, accessories) and then broke out anything that represented a very large portion of the category into its own subcategory. Hence the bags & scarves in accessories, and baskets and pillows as two of seven subcategories within home dec.
(13) Love the idea of getting stats from local biz orgs & chamber. As someone said recently, folks outside of the FT sector aren’t as inclined to share this kind of intel, but there might be some aggregate data available.
KEVIN: you don’t need their actual numbers, just their sales curves. Local biz orgs should have that data too from the retail sector just make sure you are comparing apples to apples.
(15) I’ve even broken Jewelry into subcategories (Necklaces/bracelets/earrings/rings/other). (One funny caution – when we first got our POS system and were printing labels, our POS would ‘truncate’ our categories, so many of our labels came out printed ‘Jew’! We manually fixed it but it lead to some interesting conversations).