To be successful in today’s highly competitive retail environment, students must know more than mathematical formulas found in a textbook, or marketing and retailing principles discussed in a business class, or merchandising concepts explained in a textile or design class. Merchandising and retailing concepts as well as math skills required to make good financial decisions must be presented in an integrated framework so that students can see how merchandising theory and mathematical formulas are applied to solve real world retailing problems.

Adrienne Fehr, Jessica Schwab, Muhammad Ali; Manager, Sak's Fifth Avenue at Triangle Towne Center, and Kendall Smith

Based upon industry recommendations and the above integrated framework, the Retail Buying and Merchandising Management class in the Textile and Apparel, and Technology and Management Department was designed to provide a comprehensive introduction to the financial management of merchandising fashion goods. Thus students learn both the merchandising knowledge and mathematical skills needed to succeed in the fields of retailing and merchandising throughout the textile supply chain.

The class format was structured to involve the student in hands-on experiences through applying both business principles (marketing and management theory), as observed in an actual retail environment, and retailing and mathematical concepts found in textbooks, trade journals, and Internet searches. The class was built upon incremental steps that included mini-projects to provide background information and/or application of materials and culminated in the calculation of a Six-Month Merchandise Plan and Budget for a partnering retailer in the Raleigh area.

The incremental steps entailed four phases. In the beginning phase, the first activity involved research to provide background on “The Current State of Retailing.” Students explored the textile supply chain (e.g., value-added components and the impact of technology); the various channels of distribution; retail store types by strategy mix and new retail formats; consumer buying and purchasing patterns and the external factors impacting those patterns; and current terminology. Next, students were instructed to contact a retailer of interest who would cooperate with a student team by providing three informational interviews during the semester. In the classroom portion, students begin to study the relationships between the retail pricing elements of retail price, markup, and cost of goods.

By the beginning of the second phase, the student teams had selected specific retailers and had conducted their first informational interviews. Utilizing business and other library resources, they also had begun researching the company. This research consisted of investigating the company mission statement and philosophy of company management, the corporate culture, and the organizational structure and other elements of the company, including such topics as image, retail/vendor matrix, merchandise mix, product offerings, price ranges and pricing strategies, marketing techniques and promotional mix. During this second phase, classroom instruction centered upon the strategic planning process and identifying and calculating components of both the skeletal and expanded P & L Statement. With student teams providing examples from actual retailers the relationships between all retail concepts and mathematical calculations were pinpointed and discussed. This phase ended with a student panel presentation (oral, PowerPoint, and visual) where the students shared research findings from their selected retail establishments.

During the third phase, students conducted the second informational interview with the retailer in order to examine the retailer’s strategic plan. Research in this stage included conducting a “Market Segment Analysis” to identify the store’s target consumer segment(s) in order (1) to pinpoint the demographic, psychographic, and lifestyle characteristics of these market segments; and (2) to determine the product design attributes and marketing techniques to reach the segment(s). Additionally, students conducted a “Trading-Area Analysis,” including the specific site selections, a “Store Image Analysis” and a “Competitive Product Analysis” to use as a basis for calculating the Six-Month Merchandise Budget. Simultaneously, classroom lectures, discussions, problem-solving sessions, and mathematical computations centered on the “Planning Stage” of the Buying-Selling Cycle. “Estimating and Budgeting” for planned sales, planned stock levels and planned markdowns were major topics explained in relation to “Evaluating, Anticipating, and Forecasting” trends to meet the needs and demands of the target consumer.

The fourth and final phase concluded with a third informational interview with retail store management to research the merchandising statistics of the selected retail organization. Based upon these statistics, an environmental scan and the previous information found from the examination of the retailer’s strategic plan, the students created and calculated a Six-Month Merchandise Plan with Budget. Step-by–step instructions were provided for calculating the budget. The impact of vendor relations, (including terms, dating, and shipping) on the plan and budget were addressed in class lectures. Students presented their findings, merchandise plan, and budgets in a formal presentation with written (research paper and handout), oral, and visual (PowerPoint and concept boards) documentation.

Not only did students glean how to integrate merchandising and retail concepts with mathematical calculations to solve real world retail problems, but they also were exposed to professionalism in the business world. They learned the mechanics of conducting informational interviews, constructing PowerPoint presentations in coordination with other visual props, creating handouts, and networking.

College of Textiles
P.O. Box 8301
Raleigh, NC 27695-8301
Telephone: (919) 515-6646
FAX: (919) 515-3733
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Last Site Revision:
February 2, 2006