INTRODUCTION TO THE ROLE OF A MERCHANDISER
KEY RESPONSIBILITIES
:
Planning product ranges with the buyer
Negotiating stock quantities, delivery timescales and dates
Manage budgets and pricing strategies and architecture
Managing and distributing stock levels
Markdown in H&M
(Pires(2025)
Setting stock promotions/prices
Handling supply/production/delivery problems
Analysing data , trends and sale history to assess the performance of the range
Trade the range to maximise profits
Aim is to get the Right Stock, at the Right Place at Right Time in the Right Quantity
(Target Jobs,2023)
PESTLE ANALYSIS -FACTORS INFLUENCING MERCHANDISERS
Political
Increased Shipping Costs “Carriers are still avoiding the Suez Canal, causing costly and lengthy freight diversions”(Freightos,2025)
Trump has raised the total tariff rate on most Chinese goods to 145% and 10% for the UK (BBC,2025)
Inflation soared in 2022 because oil and gas were in greater demand after the Covid pandemic and energy prices surged again when Russia invaded Ukraine (BBC,2024)
Economical Social
“The UK inflation rate is at 2.6% In March 2025 ( Statistica,2025) Above The Bank Of Englands aim of 2%.
“Regulated energy bills are set to rise by 6 per cent to £1,849 for a typical household while average water bills are set to climb by 26 per cent to £603.” (Financial Times,2025)
“GBP/USD will strengthen to 1.36 at the end of 2025.”(Currency News,2025)
“20% average loss in brands’ monthly profit due to inaccurate stock buying across sizes” (Business Of Fashion,2025)
Low Spending power in the UK (Business Of Fashion,2025)
“Retail and Shopping centres footfall has risen yoy however, high streets saw an overall drop of 3.6%. ” (Drapers,2025)
“New research says 77% of Brits plan to cut fashion spend in 2025 to manage the cost of living” (Just Style2025)
Technological Environmental
E-commerce sales slowed growth “-8% drop in percentage points in online fashion sales growth expected 2024 to 2026 vs pre-pandemic” (Business Of Fashion,2025)
Sales are mainly increasing online, in-store sales only increased 2.3% which is below inflation (Fibre2fashion,2025)
Microtrends fuelled by social media are rapidly increasing (Business Of Fsshion,2025).
30% of online orders get returned the biggest reason being sizing (Just Style2025)
Legal
“Due to the India and UK trade deal Meanwhile, British shoppers could see "cheaper prices and more choice” (Drapers 2025)
The Government has increased employer national insurance which companies will try and offset by lower pay awardsprice increases and hiring freezes (Financial Times,2025)
it will be a law in the EU to report on the management of excess stock in 2025 and will make it illegal to destroy unsold products in 2026" (Business Of Fashion,2025)
Meanwhile, climate change is making it harder to predict weather conditions and correlating demand harder to sell through stock” (Business Of Fashion,2025)
“Bangladesh, has experienced increased political and climate disruptions, leading to brands shifting up to 40 percent of orders in the second half of 2024” (Business Of Fashion,2025)
Near-shoring to Turkey has increased-”Advantages include increased supply chain traceability and reduced order-to-fulfilment times”(Business Of Fashion,2025)
Global Supply
Chain Issues
TOP 10 ISSUES IDENTIFIED
Cost Of living and inflation pressures
Rapidly changing trends
Increase in energy prices,oil and raw materials
Political tensionstrump tariffs
High online returns and slower ECommerce growth inefficient inventory Management Sustainability and climate pressures
Lower Bricks and Mortar retail sales
Sizing issuesclothes not fitting consumers
WHICH ISSUES HAVE THE BIGGEST IMPACT ON RETAIL
Assessed based on a score of 1-10 of how much they impact:
Right Stock
Right Time
Global Supply Chain Issues Fashion’s Inventory Issues
Rapid Changing Trends
Cost-of-Living Crisis
E-commerce Returns & Slowed Growth
Raw Material/Energy Prices
Tariffs & Trade Tensions
Decline in In-Person Retail Sales
Sustainability & Climate Pressure
Garments Not Fitting Consumers
Right Place
Right Quantity
Top three issues identified
Global Supply chain issues
Fashions inventory issues
Rapid changing trends
IssueOne-GlobalSupplychaindisruptions
Causes For Disruptions
Increased Shipping Costs “Carriers are still avoiding the Suez Canal, causing costly and lengthy freight diversions”(Freightos,2025)
Trump implementing tariffs on all products not manufactured in the US creating panic for retailers (Business Of Fashion,2025)
Independent Brands Have Been Greatly Impacted
“While luxury giants may be abl overcome another seismic shif there is a fear that smaller independent designers will no survive” (Business Of Fashion,2
Manufacturing Hubs Impacted
The most severe Tariffs have hit some of the most biggest manufacturing hubs (Drapers,2025)
SportsWear Brands Impacted
“More worrying for sportswear brands, the key footwear and clothing manufacturing hub of Vietnam faces the threat of a steep 46 percent tariff returning in July.” (Business Of Fashion,2025)
Nike announced they are increasing prices (Business Of Fashion,2025)
Secondary Suppliers
“Retailers want to cut costs with suppliers. The effects could ripple up the chain to textile makers and farmers.” (Business Of Fashion,2025)
Shipping delays for raw materials to suppliers
With the Global Supply chain Issues companies are increasingly using suppliers with close proximity to their customer base (Business Of Fashion,2025)
More fuel needed
IssueOne-GlobalSupplychaindisruptions
Increased
Freight Costs
To combat the delays more companies are using Air Freight - despite being costly
Increased Freight costs - “In 2024, we’ve seen a sharp increase in air freight costs….some lanes as much as 30%” (Drapers,2025)
Longer Sea routes require more fuel and more time increasing price (Maersk,2025)
Capacity Shortages
Capacity shortages- Available capacity was down between 15%-20% in 2024(Maersk 2025)
Shipping Delays
Reliability Issues for the retailers (Maersk ,2025)
Late Stock ,Lower Stock Levels
Increased mark downs
Making it harder for Merchandisers to launch
Less stock means less sales and therefore less profit for the business
Impact on customer and brand image
Delays ,stock outs,quality issues cause customer disatisfaction and frustration
Can decrease customer loyalty
Can cause customers to go elsewhere-to competitors (ICTTM.org 2023)
Increased
costs for retailers
Increased AVSP
Companies have lower margins generating less profit
Can lead to job cuts in the industry
Consumers already cost conscious (Business Of Fashion,2025) - could put them off more
Reducing the impacts Of Global Supply chain disruptions
Supply Chain Diversification
Nearshoring “Nearshoring is expected to become an increasingly relevant sourcing strategy “ (Business Of Fashion2025)
Shorter Lead Times-“From 150 to 170 days in Asia-Pacific to under 50 days in Turkey, with an average of 7 days in transit.” (Business Of Fashion,2025)
Zara shifted production closer to their European market, avoiding many delays making them highly resilient (SupplyChainNuggets,2025)
Gave them a competitive advantage in the pandemic their inventory levels only dropped 9%
Just over half of its clothes are made in Spain, Portugal, Morocco and Turkey (BBC2025) Makes them much more resilient to any global issues impacting supply chains
Diversification of supply chains by expanding into global markets allows retailers to create supply chain resilience (Business Of Fashion,2025)
It is costly for a business so would be implemented gradually to build resilience
However it is a “long-term investment for your supply chains future, ensuring stability, efficiency and a competitive edge in the global marketplace”.(Forbes2025)
Building back up suppliers is highly important (Drapers2025)
Near-shoring
Speed to market could be 3-5 times higher,higher net margins and lower inventory levels
Gives supply chain flexibility (Business Of Fashion,2025) Many businesses said they wanted to look for nearer suppliers at Source Fashion (Drapers2025)
Supply Chain Transparency
Transparency in the supply chain is highly important as it allows you to be identify weaknesses in the supply chain and issues much more easily and faster ( Drapers,2025)
“The events of the last two years have shown us the importance of robust supply chains and logistics.” (DHL,2025)
(Pires(2025)
Issue two- Fashions inventory issue
Excess amounts of sale stock in H&M Highcross
(Pires(2025)
Stock heavily discounted to try and sell
(BBC,2021)
The fashion industry produced between an estimated 2.5 billion and 5 billion items of excess stock in 2023, worth between $70 billion and $140 billion in sales.
Inaccurate stock purchasing across sizes is estimated to result in profit loss of up to 20 percent on average per month
Out-of-stock sizes ranks as the top complaint Therefore retailers miss opportunities to generate more revenue (Business Of Fashion,2025)
Companies such as Nike have to heavily rely on markdowns to shift the stock
It will be required in the EU to report on the management of excess stock in 2025 It will make it illegal to destroy unsold products in 2026
Nike said 44% of their assortment was affected by markdown in 2024 compared to 19% in 2022
In 2024 Lululemon had slower growth due to insufficient inventory and stocks-outs in smaller women’s sizes. (Business Of Fashion,2025)
“The risks are high: Play it too safe and miss out on sales, or overestimate demand and drag down profits with an inventory glut.“ (Business Of Fashion2025)
Ways to Managing Inventory issues
The use of AI
Data driven planning and forecasting tools help merchandisers forecast demand to inventory allocation (Business Of Fashion,2025)
Have the potential to reduce inventory from 5-15% (Business Of Fashion2025)
Has the potential to achieve 15-25% improvement on stock outs (Business Of Fashion,2025)
Increasing profitability
Helps optimally price products (Drapers2025)
Having Dynamic Open To Buy
Dynamic open to buy adjustments -Increasing the share of purchasing more in season helps control inventory levels (Business Of Fashion2025)
Strategies such as “Test and React” and “on demand” reduces overstocking (Business Of Fashion,2025)
FableticsandBlueYonder
Fabletics used Blue Yonder to integrate AI into its supply chain
Blue Yonder added demand planning allocation and replenishmentmerchandise fiscal planning and size scaling ,
Customer experience improved with more of the right sizes and right product avaliable
It improved sell through rates and reduced mark downs
Costs were reduced with less product mark downs and waste
"I believe the merchandisers and brands who thrive in the next decade will be those who master this human-AI partnership," says Asos’ Martinez Ortiz. (Drapers,2025)
Merchandisers undertook training and it meant a strong relationship between the merchandisers and tech teams (Drapers,2025)
Issue Three -Cost of living crisis impact on consumers
To deal with the increasing bills consumers reduce spending their money on fashion -New research says 77% of Brits plan to cut fashion spend in 2025 to manage the cost of living” (Just Style,2025)
“Consumers remain cautious with their spending and many are continuing to prioritise saving, travel and experiences”(Financial Times,2025)
OfficeforBudgetResponsibility OfficeforNationalStatistics Statista
AnnualinflationrateoftheConsumerPriceIndexintheUnitedKingdomfrom2019to2029 (Statista2025)
High inflation - results in price sensitivity (The State of Fashion 2025).
“UK inflation jumped sharply in the year to January, driven by rising food prices, air fares and an increase in private school fees.” BBC 2025
Less disposable income for consumers -have to cut back on non essentials such as fashion
Therefore less sales retailers are making and less revenue is being generated
This causes an increase in job cuts In the fashion industry and more retailers closing down (Drapers,2025)
Issue Three - Cost of living crisis impact on retailers
Impact On Merchandisers
Challenge for Merchandisers is to maintain value of the garment whilst making the clothes well priced for cost cautious consumers
Merchandisers have to be weary of extra costs -for example rising energy costs reduce margins , whilst balancing pricing to be optimal for cost consicous shoppers
Have to be strategic about the frequency of sales, as its often used to shift stock during slow periods but can damage brand image
Becomes more of a challenge to meet sales targets
Less products selling so higher stock levels
Industry Impacts
Impact on retailers reduced sales targets
“Primark, the international fashion retailer, has blamed cautious consumers in its core UK market as it cut its sales forecast for 2025.” (Financial Times,2025)
Increased Competition
Ultra Cheap online retailers such as Shein have greatly increased online competition during the tough economic times (Cityam,2024)
Impact on retailers -increasing number of retail stores shutting
“ 13,479 retail stores across the UK closed in 2024, an increase of 28 percent on levels from the year prior” (Fashion United,2025)
Erik,2024
Cost of living crisis - Keeping customers engaged
The importance of value
Emphasising the products value- Communicating about the products quality , durability and unique attributes will allow you to capture consumers who value longevity (Drapers,2025)
Consider launching new value orientated products and price points (Business Of Fashion ,2025)
Introduce a range of lower priced products, This allows you to create value with price during this cost of living crisis
For example - releasing a range of lower priced core basics
This will allow you to drive profit by volume
(Reiss,2025)
Loyalty programmes
Loyalty programmes increase customers loyalty longterm boost both full price and discounted sales and encourage them to make more sales
Boosting sales for the brand longterm (Drapers,2025)
Smarter promotions
Be intentional about sales/ markdown as it can train consumers to wait for sales , slashing profit margins
Use flash sales to create the fear of missing out -use sparingly
Implement targeted personalised discounts into email marketing (WGSN,2025)
Constantly having sales will reduce the impact and thrill of them
1 3
Identify Weaknesses In The Supply Chain Implement Strategies To Strengthen Supply Chain Identify Any Inventory Issues Implement Management Tools Implement New Ways To Engage Customers During Tough Economical Times
The top 3 issues that have the biggest impact on Merchandisers in retail were identified as supply chain issues, inventory issues, and the cost of living crisis. I then explained the impact of these issues on retailers . Then, I provided recommendations for implementation, including nearshoring, supply chain transparency, utilising AI to manage inventory, engaging customers through loyalty programmes, and highlighting the value of the products to customers.
4
The world is constantly changing and impacting retail - a good Merchandiser will be flexible , adaptable to change with strong problem solving skills
THANK YOU FOR LISTENING
Issue PestleFactors ImpactOnRetail
Global Supply Chain Issues
Increased Shipping Costs “Carriers are still avoiding the Suez Canal, causing costly and lengthy freight diversions”(Freightos,2025)
Cost Of living and inflation pressures
“The UK inflation rate is at 2.6% In March
2025 ( Statistica,2025) Above The Bank Of Englands aim of 2%.
“New research says 77% of Brits plan to cut fashion spend in 2025 to manage the cost of living” (Just Style2025)
Less appetite to spend-“To capture customers’ share of wallet brands will need to prove their value” (Business Of Fashion,2025)
Increase In freight costs increases costs for the business impacting AVSP and costs for the business meaing higher selling prices for consumers
Disruptions to the stock delivery date impacting sales and profit
Lead time up to 30% more (Business Of Fashion,2025)
Delays can cause key trends to be missed
Can lead to markdown,not meeting margins
Stock could arrive slow and possibly in wrong quantities impacting sales,not meeting sale targets
Puts pressure on merchandisers to set low prices which reduces margins
Consumers will be spending less money, harming retailers making less profit
Retailers will have increased competition from brands such as Temu and Shein
Retails will have to create value to prove to the customer its worth purchasing
Will mean more markdowns due to sales not shifting stock
Could lead to cutting jobs for the retailer if sales arent being met
Lower sell through rates
Issue PestleFactors ImpactOnRetail
High online returns and slower E-Commerce growth
E-commerce sales slowed growth “-8% drop in percentage points in online fashion sales growth expected 2024 to 2026 vs pre-pandemic” (Business Of Fashion2025)
30% of online orders get returned the biggest reason being sizing (Just Style,2025)
Harder to predict inventory forecast
Impacts net profit
Decreases margins
Less sales meaning less profit
More increased competition with cheaper fast fashion brands operating only online with no less overhead costs
Slower growth will have to markdown more to attract customers impacting margins
Rapidly Changing Trends
Microtrends fuelled by social media are rapidly increasing (Business Of Fashion2025).
Can make it hard for retailers to compete with rapid producing fast fashion companies such as Shein
Can cause missed opportunities for sales if trends are missed
Can make it hard to get stock in fast enough might miss key period for trend which can lead to mark downs and profit loss
Can increase likelyhood of excess inventory
Issue PestleFactors ImpactOnRetail
Increase in energy prices,oil and raw materials
“Regulated energy bills are set to rise by 6 per cent to £1,849 for a typical household while average water bills are set to climb by 26 per cent to £603.”
(Financial Times,2025)
Freightos air index states, recently rates to Europe have increased by more than 20%, now nearly $3.90 per kilogram (Freightos,2025)
Energy prices surged again when Russia invaded Ukraine (BBC2025)
Political Tensions
-
Trump Tariffs
Trump has raised the total tariff rate on most Chinese goods to 145% and 10% for the UK (BBC2025)
Garments costs more to produce which raises AVSP and reduces profit margins
Higher bills for consumers means less disposable income so less spending power for consumers
Higher Freights means more costs which reduce margins
Tighter OTB
Fast fashion companies Shein and Temu are raising Adverts in the UK (Business Of Fashion,2025) pressure on a lower AVSP for retailers
Retailers especially in the US have to rethink pricing strategies with the increase in tariffs
Merchandisers may have to rethink supply bases which have taken years to build which can be costly and impact logistics
Increase in costs for businesses which could mean having to cut down on employees
Increase in costs for businesses could mean higher AVSP and lower profit margins , higher prices could put consumers off `Ties
Issue PestleFactors ImpactOnRetail
Inefficient Inventory Management Sustainability and Climate Pressures
“20% average loss in brands’ monthly profit due to inaccurate stock buying across sizes” (Business Of Fashion,2025)
Huge profit loss for the business Poor size ratio missing sale opportunities
Excess stock means high markdowns lowering margins
Unsatisfied customers-lost out on potential sales
Could reflect Merchandiser not knowing their customer well enough
Meanwhile, climate change is making it harder to predict weather conditions and correlating demand harder to sell through stock” (Business Of Fashion,2025)
It will be a law in the EU to report on the management of excess stock in 2025 and will make it illegal to destroy unsold products in 2026" (Business Of Fashion,2025)
Climate change can cause a rapid change in what consumers are buying ,which can reduces the amount of sales meaning profit lost due to having to mark it down
Retailers need to be extremely cautious in what stock and how much they are buying to oblige to the sustainability laws
Issue PestleFactors ImpactOnRetail
Sales are mainly increasing online, in-store sales only increased 2.3% which is below inflation (Fibre2fashion,2025)
Lower In Store
Retail Sales
“Retail and Shopping centres footfall has risen yoy however high streets saw an overall drop of 3.6%.”(Drapers,2025)
Sizing Issues-
Clothes Not Fitting Consumers
30% of online orders get returned the biggest reason being sizing (Just Style,2025)
Less sales so more stores shutting down Missed sales targets
More jobs cut as retailers shut down or reduce capacity
Stores will have to increase sale promotions to increase footfall
More sales will mean slashed profit margins meaning less revenue
Significantly impacts profit as it reduces margin
Less customer loyalty as they will be disappointed by ill fitting garment which means less repeat orders
Some stock is not resell-able contributing to lost of stock and waste
Operational costs to process the return
Poor fit can lead to having to mark down the stock to shift it reducing selling price and profit margin
Political
Increased Shipping Costs “Carriers are still avoiding the Suez Canal causing costly and lengthy freight diversions”(Freightos2025)
Inflation soared in 2022 because oil and gas were in greater demand after the Covid pandemic and energy prices surged again when Russia invaded Ukraine (BBC2024)
Trump has raised the total tariff rate on most Chinese goods to 145% and 10% for the UK (BBC2025)
“In 2024 weve seen a sharp increase in air freight costs
… some lanes as much as 30%” (Drapers2025)
Economical Social
“The UK inflation rate is at 2.6% In March 2025 ( Statistica2025) Above The Bank Of Englands aim of 2%
High inflation - results in price sensitivity (The State of Fashion 2025)
“Regulated energy bills are set to rise by 6 per cent to £1849 for a typical household while average water bills are set to climb by 26 per cent to £603” (Financial Times2025)
“New research says 77% of Brits plan to cut fashion spend in 2025 to manage the cost of living” (Just Style2025)
It “is still forecasting that GBP/USD will strengthen to 1.36 at the end of 2025”(Currency News,2025)
“20% average loss in brands monthly profit due to inaccurate stock buying across sizes” (Business Of Fashion2025)
Bank Of England has cut interest rates to 4 25%
Low Spending power in the UK “Recovery across the continent will be mixed; sluggish growth is still expected in key economies such as Germany and the UK” (Business Of Fashion2025)
“Macroeconomic pressures and rising prices have driven fashion shoppers to adopt cost- conscious behaviours” (Business Of Fashion2025)
Less appetite to spend-“To capture customers share of wallet, brands will need to prove their value” (Business Of Fashion2025)
“Retail and Shopping centres footfall has risen yoy owever high streets saw an overall drop of 36% This could be reflective of the ongoing shifts in shopper habits amid cost-of-living pressures” (Drapers2025)
Technological Environmental
E-commerce sales decline “-8% drop in percentage points in online fashion sales growth expected 2024 to 2026 vs pre-pandemic” (Business Of Fashion2025)
Sales are mainly increasing online in-store sales only increased 2 3% which is below inflation (Fibre2fashion2025)
Microtrends fuelled by social media are rapidly increasing #fashion on TikTok has increased 2 5x in the past three years (Business Of Fsshion2025).
30% of online orders get returned the biggest reason being sizing (Just Style2025)
“Compliance with the European Commissions corporate sustainability reporting directive (CSRD) has now been delayed to 2028” Drapers 2025
The Government has increased employer national insurance which companies will try and offset by lower pay awardsprice increases and hiring freezes (Financial Times,2025)
“63% share of fashion brands that need to accelerate emission reduction efforts to reach 2030 targets” (Business Of Fashion,2025) “The Ecodesign for Sustainable Products Regulation will require brands in the EU to report on the management of excess stock in 2025 and will make it illegal to destroy unsold products in 2026" (Business Of Fashion,2025)
“Bangladesh despite being a favoured sourcing ocation in recent years has experienced increased po itical and climate disruptions leading to brands shifting up to 40 percent of orders in the second half of 2024” (Business Of Fashion2025)
“Due to the India and UK trade deal Meanwhile British shoppers could see "cheaper prices and more choice" on products including clothes and footwear the government said” Drapers 2025
Near-shoringtoTurkeyhasincreased-”Advantagesincludeincreased supplychaintraceability andreducedorder-to-fulfilmenttimes”(BusinessOfFashion,2025)
Meanwhile climate change is making it harder to predict weather conditions and correlating demand harder to sell through stock” (Business Of Fashion2025)
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