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Career Path

How to get ahead in merchandising

by Ben O'Rourke

Merchandising
Danny Cheung
Divisional manager
Li & Fung (Trading) Ltd

Murphy's Law states, "If anything can go wrong, it will" - and there is no occupational area more receptive to this rule than merchandising. Merchandisers, at least those based in Hong Kong, are required to oversee every stage of production, from research and development of the original concept to ensuring the product arrives at a retail outlet in Boise, Idaho, in time for Christmas.

The supply chain can be long and complicated, the opportunities for mistakes at each link are great and the consequences of a tiny error can be devastating. The merchandiser's main job is thus to ensure these mistakes do not happen but, if they do, to initiate an effective Plan B to minimise fallout.

If you think this may not be as difficult as it sounds, perhaps you should talk to Danny Cheung, who is responsible for the second largest toy store in the US and manages the supply chains for around 1,000 different products at any one time. No calculator is needed to determine that the probability of an error occurring along the line somewhere, right now, is extremely high.

Diversity

A good merchandiser must be aggressive, detailed and customer-service orientated, with excellent negotiation, technical, organisational and problem-solving skills, says Mr Cheung. In essence, a merchandiser needs to listen and understand the client's needs.


"It's a little like managing a restaurant - creating a menu, taking orders, preparing food and serving a dish to the customer's specific taste"

For example, he explains, "Cultural differences can cause problems. Quite often, the factory in China will not understand why American consumers would need the product they are making. In this case, we need to translate the customer's ideas. It's a little like managing a restaurant - creating a menu, taking orders, preparing and cooking food and serving a dish to the customer's specific taste."

A fashion graduate with 17 years' experience in the merchandising and retail business, Mr Cheung worked as a merchandiser at The Franklin Mint until 1988, when he joined Matrix (Holding). He remained there until 1994, by which time he had reached the position of general merchandising manager.

After moving to Disney, Mr Cheung was instrumental in shifting the company's buying from United States-controlled companies to Asian sources. He was then transferred to start up a new division, where he is still based. Currently the largest division in terms of sales at Li & Fung, its net worth jumped to US$130 million in just a couple of years.

The passion

Ironically, in a career that requires a wealth of factory knowledge, merchandisers possess neither tools nor machinery of their own and, theoretically, do not even need an office. Their value lies in their knowledge and their ability to make things happen as swiftly, easily and cost-effectively as possible. However, "the biggest challenge," says Mr Cheung "is justifying our role to the customer. We spend an enormous amount of energy on proving our value.

"With the excelling of technology, we are thinking how to "internetwork" the supply chains. We have successfully connected with the supply chain partners to automate lots of processes and share information throughout the production milestones. In the new era, humans should transform into higher value roles making quality decisions."

Very few courses cater to the aspiring merchandiser. "A strong academic background is not strictly required to enter the industry, it's more a case of how well you can perform," he explains. Indeed, those who perform well may find themselves moving on up very quickly.

Besides the day-to-day challenges of proving yourself and managing the supply chain, there is the thrill of working on the frontier of consumer technology. "Some people feel [this] is a trendy job," says Mr Cheung. "We're working on products 12-18 months before they arrive in the shops, so you could say we are leading the world."

China Opportunities

Although opportunities in China exist, Hong Kong is still the number one toy and consumer goods hub in the world, and as such, this is the place to be for those wanting to get into merchandising. However, travel to China (and other parts of Asia), where productions reside, is generally a necessity.

For most companies, Hong Kong is where the concept, research, product design, engineering, packaging design, sales, etc are all done but manufacturing takes place in China. Some large US retailers such as Wal-Mart are shifting production across the border and setting up localised mainland offices. At present, this is not enough to warrant a mass exodus of Hong Kong talent northwards.


 

Taken from Career Times 17 October 2003, p. 40

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