PROJECTS UNDERTAKEN
1. Study of processes involved in Category Management for Pepperfry
Category management is a retailing and purchasing concept in which the range of products purchased by a business organization or sold by a retailer is broken down into discrete groups of similar or related products; these groups are known as product categories (examples of grocery categories might be: tinned fish, washing detergent, toothpastes). It is a systematic, disciplined approach to managing a product category as a strategic business unit. The phrase "category management"
was coined by Brian F. Harris.
The industry standard model for category management in retail is the 8-step process, or 8-step cycle developed by the Partnering Group. The eight steps are shown in the diagram on the right; they are :
1. Define the category (i.e. what products are included/excluded) 2. Define the role of the category within the retailer
3. Assess the current performance
4. Set objectives and targets for the category 5. Devise an overall Strategy
6. Devise specific tactics 7. Implementation
8. The eighth step is one of review which takes us back to step 1
The 8-step process, whilst being very comprehensive and thorough has been criticized for being rather too unwieldy and time-consuming in today's fast-moving sales environment; in one survey only 9% of supplier companies stated they used the full 8-step process. The current industry trend is for supplier companies to use the standard process as a basis to develop their own more streamlined processes, tailored to their own particular products.
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Market research Company Nielsen has a similar process based on only 5 steps:
reviewing the category, targeting consumers, planning merchandising, implementing strategy, evaluating results.
Following are the processes involved in Category Management:
Vendor Sourcing and Management
Vendor management is a discipline that enables organizations to control costs, drive service excellence and mitigate risks to gain increased value from their vendors throughout the deal life cycle. Pepperfry Sourcing team approaches brands like Me n Moms, Pebbleyard, Godrej, etc. Interested vendors/ Brands themselves can directly approach the organisation online through the website (pepperfry.com). Business Models are explained to the vendor and margins are set. Usually agreed upon margin is 45%.
Vendor Registration
Pepperfry operates on a ―Managed Marketplace‖ model, which is an ideal platform for small and medium business artisans and merchants, who wish to sell their merchandize to millions of discerning customers. Currently, the website has over a 1000 merchant partners, who can showcase their design skills, craftsmanship and service orientation to customers across India and the world. For many merchants, it has become the primary source of their income.
It is one of the few company in the Home and furniture vertical in India to ship products overseas. Customers from 12 countries (USA, Russia, Greece, and France etc.) have bought stuff for their homes on Pepperfry.
Pepperfry enables Merchants from across the country to sell their items on the site after agreeing on commercial terms. Pepperfry manages the entire process for the merchant. This includes pre-sale merchant listings, enabling photo-shoots, packaging to post-sale shipping and providing customer service of the ordered items.
This approach helps introduce the benefits of two even those merchants who might not be Internet savvy and therefore ensures that a wide variety of products can be made available to on-line customers. Pepperfry trains suppliers to make knock-down, foldable products, similar to IKEA furnishings. The company also provides carpenters to assemble the items once delivered.
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Catalogue business the assortment is limited by paper, printing, and postage cost – another form of space. And, inventory investment. These traditional limits on assortments don‘t exist in the same way online. In fact, it‘s fairly easy to put an image online and begin to sell the product.Assortment planning from a customer selection standpoint is more crucial for the
―specialty‖ retailer. But, basic merchandising, where the retailer focuses or limits their assortment on behalf of the customer (and the brand) often isn‘t a priority. The poor shopper has to scroll down pages and pages of styles if they choose to spend the time. Inventory investment and cash flow, is another reason to limit the assortment – too much. And, customer satisfaction can be lost by carrying too many styles if one can‘t keep the sizes/colours in stock for the customer – too little. ―Sku rationalization‖
or ―culling‖ is the ―science‖ of assortment reduction. The ―art‖ of developing your assortment is crucial also. Brand positioning among other things must be considered.
This is not ―as‖ true for ―commodity‖ websites. But, ―commodity‖ websites still have some shoppers entering via the home page versus the product pages. (There is a Google Analytics report which shows this flow and ―drop offs‖ very well.) And, most companies still need to manage inventory investment and cash flow along with stock outs and the customer experience.
Six factors are taken into account in planning the size and content of assortment:
1. Brand strategy 2. Business model 3. Current market trends 4. Sales and margin history
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5. Channel(s) of distribution requirements
6. Organization‘s financial plans (sales, margin, and inventory)
It is crucial to see what has sold well both last season and the same season last year for your organization. In addition to sales, final margin must also be considered including all discounting! As always, if something sold well but the margins were very low it‘s not worth repeating in the same way. Taking a look at the categories and styles that have sold well in the past is often the starting point for assortment planning but I have certainly seen too much weight given to this activity. Even in a traditional business model newness is important! When looking at this history it is good to begin selecting items that can be ―carryover‖ items prior to developing or buying ―new styles‖.
Categorising and Listing
Products are segregated according to categories as follows: Furniture, Home Décor, Furnishings, Lamps & Lighting, Kitchen & Dining, Appliances, Bath, Housekeeping and Pet Supplies.
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Further Furniture is divided into Sofas, Seating, Beds, Bedrooms, Dining, Cases &
Cabinets, Tables, Bar Furniture, Kids Furniture and Collections.
Listing is made in includes product name,images with different perspectives, Retail price, Our Price, You Pay price, Coupon percentage, available product quantity, Serviceable pin code, item description and Set option.
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Imaging
However impressive the rest of your e-commerce business is, if you‘ve not paid any attention to the visual aspect of your site then your sales are guaranteed to suffer.
Just as a high street shop with badly thought out displays and no visual promotions is likely to lose custom, so an online retail site with clumsy or unattractive page displays will deter users. Following are ways of effective measures taken for proper imaging for the website.
1. Manage different brands
Pepperfry sell products for a number of different brands. We know that organising the display of multiple brands can be a headache – which is why we‘ve developed our brand adjacency technology to give retailers a helping hand. This clever functionality can help you keep products from one brand together, whilst separating brands that you think are best kept apart. This allows customers to find what they are looking for quickly and easily, and prevents your site from looking disorganised and unappealing.
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2. Sequence products effectively
Carefully sequenced products can benefit both the user and the retailer. Our balance factor technology allows you to organise your site‘s product display in line with specially selected site metrics. Grouping products together with other similar items will keep your customers satisfied, and has the added bonus that you, the retailer, can target consumers more efficiently.
3. Customise your homepage
The homepage is often the customer‘s first point of call, and as such can be key to whether or not a sale is made.
4. Implement promotional banners
High street shops use promotional banners to entice customers and get them excited by a particular brand or offer. E-commerce sites can also use promotional banners to their advantage. Therefore Pepperfry implement banners that are triggered by user behaviour, focussing, for example, on product category. This ensures that customers are exposed to relevant deals for them, increasing chances of conversion.
Pricing
Vendors provide with their manufacturing cost for the product to the category
Associate in pepperfry. To that VAT of 12.5% is added after which agreed upon profit
margin is added which is usually 45%. Maintaining higher spread, Coupons are applied to the ―You Pay‖ amount.
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Product upload
Listings are made for all products and uploaded in bulk through Bridge. Bridge is software used for online assistance to Pepperfry. Once SKUs for all the products are generated, images are uploaded for every indivisual SKU. Images should be from different perspectives and with dimensions mentioned.
Stock Update and Couponing
Post product upload and SKU generation. Stocks are added which are provided by the vendor to Pepperfry team. Stock upload is very important without which items won‘t go live on website.
Inventory management is the process of ordering, storing and utilization of the raw materials needed during manufacturing and the process of monitoring and controlling the final product that is ready for sale. This inventory is one of the company‘s major assets and represents an investment that will not reap returns until the goods are finally sold. For this reason, inventory management is a serious concern for any
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business, whether it is small scale or large or whether it is an online store or a bricks-and-mortar setup.
Since there is a significant investment in the inventory itself as well as in storage, tracking and insurance of it, mismanaged inventories can cause substantial financial concerns and problems for the business. The ideal inventory management system should create a plan that ensures that there is neither an inventory surplus not a shortage. Companies can use several methods for inventory management such as just-in-time where the items are received as needed for production or materials requirement planning, which bases inventory orders directly on forecasts of sales in a particular period.
Quality Assurance
Merchandising in retail is like candy on Halloween; it‘s hard to think of one without the other. In the current state of retail, and especially online retail, merchandising is the cherry on top that converts shoppers into buyers.
With the seemingly endless numbers of competitors out there, an up-to-date merchandising strategy is a must to convert and gain new customers. The vast majority (97%) of website visits don‘t end in a purchase, which can be a major drag
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for online retailers. There‘s a huge opportunity, though, as August 2014 saw an 11%
increase in sales, compared to August 2013. It‘s just a matter of attracting the right consumers and getting them to complete their purchases. This is where merchandising comes in to save the day.
Merchandising can come in many different forms, from inventory to pricing, and beyond—but the end goal is always the same: to drive conversions. It can be tricky to keep up with all the different ways online retailers can optimize their stores through the magic of merchandising, so here is a list of the top five tips to help retailers of all sizes.
1. Get mobile optimized
Almost half (40%) of consumers don‘t feel comfortable shopping online and it doubles to 80% when we‘re talking about shopping on mobile. This may look dismal, but it means that your web store not only needs to be mobile friendly, but also wow shoppers on whichever screen they prefer.
2. The clearer, the better
Shoppers don‘t want to be confused. Do you know what happens when they‘re confused? Yep, you guessed it, they vanish. Luckily, there are many things you can do to cut down on those pesky abandoned carts. Here are a few:
Add interactive tools that aid customer purchase decisions. This can help retailers see up to a 40% boost in conversions. This is especially important for ecommerce because you can‘t be there like a salesperson can in a brick and mortar store. Add a live chat feature to support shoppers and get them closer to checkout.
Improve your search function. Did you know that 11%-15% of consumers start shopping by searching for a specific product in search bars? This number is on the rise, so it‘s prime time to take advantage of this. Shoe retailer, FootSmart, made a small change by adjusting search results to include top items sold and saw an impressive 82% increase in conversions.
Provide shipping policies and estimations as early as possible in the checkout process. Offering free shipping is a great way to increase average order value because 93% of shoppers take actions to qualify for free shipping.
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3. Keep it short and sweet
The fewer steps to purchase, the better. When retailers ask for too much information or otherwise complicate the process, shoppers drop out of the sales funnel. To help this, you should decrease the number of steps it takes to complete a purchase and provide a status bar up top to show that it won‘t take them long to checkout. You also want to provide clear, descriptive, and to-the-point product descriptions to resolve any confusion.
4. Be data driven
Analytics can help retailers make better merchandising decisions. More than half of retail leaders (63%) already do it—so if you want to keep up and get ahead, you should, too. Data is your friend because it can teach you what works and what doesn‘t. Walmart is a great example of a retailer that used data to its advantage.
After crunching the numbers, Walmart learned that diapers and beer sales were highly correlated. So you know what stores did? They put these two aisles side by side and saw a sales increase for beer. Cheers to that!
5. Keep your enemies closer
You already know that competition is fierce in online retail, but what can you do about it? The first step is to know exactly what‘s going on in your competitive landscape at all times. How are your competitors pricing? What do they have in stock? When do they run out of products that you carry? Tracking competitors and their inventories can clear this up once and for all. Then retailers can fill in the gaps in their inventory and effectively become a more successful competitor. The more you know, the better your sales can be.