ABSTRACT
Achieving success in the retail industry requires having the right product in the right place at right time, happy customers, and collaboration with key supply chain partners. The factors apply to retail chains and physical and online stores of any size. Trading partner collaboration with retailers will be aided by an understanding of how the retailer makes decisions. The two companies are on opposite ends of retail value–service spectrum. Discounter caters to value-seeking consumers in search of low prices. High-End customers are service seeking and attracted to style and luxury. Discounter has a significantly higher cost of goods sold (COGS) relative to sales and far lower gross margins, 21" versus 67" for High-End. Retailer Discounter specializes in this product category. A merchandise budget will provide planning rules, often in software, to ensure that category meets profitability goals from GMROI targets or Direct Product Profie (DPP). Most retailers use electronic data interchange (EDI) computer language to interact with supply chain partners.
