There has been a significant change in retail trading over the years. Modernization, systematization, and consolidation are the catch phrases and keys to understanding retail. The present age is that of rocket science retailing which is an act of blending the traditional forecasting systems with the prowess of information technology. It fuses data and instinct with computer models to create a high-tech forecasting system supported by a flexi supply chain. The need is to evaluate not what the retailer sold but what it could not sell and what it could have sold had the inventory been available. Merchandise decisions have become more complex and the penalties for errors even steeper. To reduce the fallouts and to increase the customer satisfaction, merchandise planning has become all the more important. A new set of software tools and sophisticated techniques have emerged, which promise to revolutionize the entire merchandising chain, from buying to stocking to pricing. The latest techniques used for efficient inventory management are Vendor Managed Inventory (VMI), forecasting techniques, inventory classification, Computer Assisted Ordering (CAO), Distribution Centers, and Direct Store Delivery (DSD). This paper focuses on the importance of merchandise planning in the era of malls and hypermarkets trying to manage Stock Keeping Units (SKUs) from a few thousands to a few lakhs.

At present, retailing is not only about selling at the shop, but also about surveying the market, offering choice and experience to consumers, competitive prices, and retaining consumers as well. In the present scenario, the retailer does not exist in the brick and mortar form alone. He or she can do it by using the telephone, direct mails, tele-shopping networks, e-mails, the Internet, or absolutely impersonally by using vending machines.

Thus, different kinds of strategies are employed in retail trading to satisfy the needs of manufacturer and consumer. There has been a significant change in retail trading over the years. Modernization, systematization, and consolidation are the catch phrases and keys to understanding retail in the next decade. The localized nature of the industry is also changing as retailers face lower growth rates and threatened profitability in the home markets. New geographies help them to sustain top line growth, in addition to enabling global sourcing and encashing on global advantages of getting the best product at optimum prices.

Retailing is and has always been an exacting business. Retailers, particularly those who operate large chains, have to predict the desires of potential customers, buy and allocate complex set of merchandise, set the right prices, and offer the right promotions for every individual item. Controlling merchandise as well as store operations is a major challenge. Consumers are demanding greater variety in products, and their preferences are becoming harder to predict. The advent of cutting edge technologies and improved distribution system have been of immense help in simplifying this crucial task.

Management Research Journal, Merchandise Planning, Retail Trading, Vendor Managed Inventory, VMI, Direct Store Delivery, Inventory Management, product Life Cycles, Communication Systems, Decision Making Process, Sales Management, Category Management, Supply Chain management, Retail Management.