PROCUREMENT of products
PROCUREMENT:-
After deciding on the
product-assortment strategy, the retailer must establish merchandise sources,
policies, and practices. In the corporate headquarters of a supermarket chain,
specialist buyers (sometimes called merchandise managers) are responsible for
developing brand assortments and listening to salespersons’ presentations.
Retailers are rapidly improving their skills in demand forecasting, merchandise
selection, stock control, space allocation, and display. They use computers to
track inventory, compute economic order quantities, order goods, and analyze
dollars spent on vendors and products. Supermarket chains use scanner data to
manage their merchandise mix on a store-by-store basis. Some stores are
experimenting with radio frequency identification (RFID) systems made up of
“smart” tags—microchips attached to tiny radio antennas—and electronic readers.
The smart tags can be embedded on products or stuck on labels, and when the tag
is near a reader, it transmits a unique identifying number to its computer
database. The use of RFIDs has been steadily increasing. Coca-Cola and Gillette
use them to monitor inventory and track goods in real time as they move from
factories to supermarkets to shopping baskets.27 When retailers do study the economics
of buying and selling individual products, they typically find that a third of
their square footage is tied up in products that don’t make an economic profit
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