In the retail industry, fluency in retail terminology is not just an asset—it's a necessity. Retail terminology is the specific language, jargon, and terms used to describe various operations, strategies, roles, metrics, and aspects of the retail business. Whether you're taking your first step into the vast retail landscape or looking to refine your expertise, understanding the lexicon of the trade is critical. From "omnichannel marketing" to "SKU," each term carries weight and significance, shaping strategies, operations, and customer experiences.
This comprehensive guide to 100 crucial retail terms is your gateway to navigating the sector with confidence and insight, empowering you to thrive in roles that demand proficiency in retail's unique language. Welcome to your essential primer on the words that drive one of the economy's most dynamic industries.
100 Retail Terms To Know
Here, we will provide a list of 100 commonly used terms within the retail industry. These terms range from basic to more advanced concepts that could interest someone seeking to understand the retail space better or to professionals within the industry. Some of the fundamental terms used in retail include:
1. SKU (Stock Keeping Unit)
An SKU is a unique alphanumeric code that retailers assign to each product in their inventory to efficiently track stock levels and manage sales data. This code often consists of eight digits and varies depending on the retailer's chosen format, with each variation of a product—such as size, color, or style—having its own distinct SKU.
2. POS (Point of Sale)
The POS is the location within a retail environment where a transaction is completed and payment is processed. Modern POS systems are digital and can include hardware like cash registers, barcode scanners, and credit card readers, as well as software for managing sales, inventory, and customer relationships. These systems facilitate various payment methods, including cash, credit cards, and mobile payments.
3. Inventory
Inventory refers to the goods and materials that a business holds for the purpose of resale. It encompasses raw materials, work-in-progress, and finished goods that are considered current assets on a company's balance sheet. Effective inventory management involves tracking these items from order to sale to ensure availability and optimize storage costs.
4. Merchandising
Retail merchandising is the strategic promotion and marketing of products within a retail space to encourage sales. It involves a combination of visual display techniques, product placement, and pricing strategies to attract customers and enhance their shopping experience.
5. Retail Markup
Retail markup is the difference between the cost of a product and its selling price. It represents the percentage increase over the cost that retailers add to the price of goods in order to cover expenses and generate profit. The markup is essential for retailers to sustain operations and achieve financial success.
6. MSRP (Manufacturer's Suggested Retail Price)
MSRP is the price that manufacturers recommend retailers use when selling their products. It is intended to standardize pricing across different retail locations and help consumers compare prices. However, retailers are not obligated to adhere to MSRP and may adjust prices based on competition, market demand, or other factors.
7. Markdowns
Markdowns refer to the reduction in the original selling price of products in retail. They are generally used to clear out old or excess stock, promote sales, or respond to decreasing demand or market competition. Markdowns can be permanent, indicating a new regular price, or temporary as part of promotional sales events like Black Friday.
8. Planogram
A planogram is a visual diagram or model that indicates the placement of products in a retail store. Created to maximize sales and give an aesthetically pleasing shopping experience, planograms detail where each SKU should be located on the store shelves and displays. Retailers often use planograms to optimize shelf space usage and facilitate inventory replenishment.
9. Turnover
In retail, turnover usually refers to either inventory turnover or employee turnover. Inventory turnover is the rate at which inventory is sold or used over a given period; it measures the efficiency of a company in managing and selling its stock. Employee turnover, on the other hand, pertains to the rate at which staff leave the company, either voluntarily or involuntarily, and need to be replaced.
10. Omnichannel
Omnichannel retailing refers to a multichannel approach that provides customers with a seamless and integrated shopping experience across various channels and devices. These channels include physical stores, online marketplaces, mobile apps, social media, and more. The goal of omnichannel retailing is to create a cohesive customer journey, regardless of how or where the customer is shopping.
11. Brick-and-Mortar
Brick-and-mortar refers to traditional physical stores that customers can visit to browse and purchase goods in person. These types of stores are the opposite of online retailers and are often considered integral for offering hands-on customer experiences, immediate product availability, and local presence.
12. E-commerce/E-tailing
E-commerce, also known as electronic commerce or internet commerce, refers to buying and selling goods or services using the internet. E-tailing, or electronic retailing, is a subset of e-commerce that specifically involves retailers selling products to consumers through virtual platforms. E-commerce offers convenience, a wider selection, competitive pricing, and access to a global marketplace.
13. Loss Leader
A loss leader is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services. With this strategy, retailers attract customers with the expectation that they will buy additional, higher-margin products or return later for repeat business.
14. Cross-Merchandising
Cross-merchandising is the retail practice of displaying products from different categories together in order to drive additional sales. For example, placing peanut butter next to jelly can encourage shoppers to purchase both items. It enhances the shopping experience by creating a convenient and logical flow that can lead to impulse buys.
15. Foot Traffic
Foot traffic refers to the number of customers who enter a retail store. It is an important metric in retail because it indicates the potential for sales; higher foot traffic often leads to more opportunities for transactions. Retailers may track foot traffic to analyze patterns, assess marketing effectiveness, and make staffing decisions.
16. BOPIS (Buy Online, Pick up in Store)
BOPIS is a service that allows customers to purchase items online and then pick them up in a physical store location. This method combines the convenience of online shopping with the immediacy of in-store pickup. It can save on shipping costs and time for consumers, while also driving additional in-store traffic for retailers.
17. Wholesale
Wholesale refers to the sale of goods in large quantities, typically to be resold by retailers rather than directly to individual consumers. Wholesalers typically sell products at lower prices due to the high volume of their orders. Retail businesses rely on wholesalers for cost-effective inventory purchases, which they then mark up in price to sell to end consumers.
18. Stockout
A stockout occurs when a retailer's inventory is depleted and products are no longer available for sale to consumers. This can happen due to higher than expected demand, supply chain issues, or poor inventory management. Stockouts can result in lost sales, as customers may turn to competitors to find the items they seek, and can also damage a store's reputation for reliability.
19. Replenishment
Replenishment in retail refers to the process of restocking products or materials in the store or warehouse. Effective replenishment ensures that inventory levels are maintained at sufficient quantities to meet customer demand and avoid stockouts. It often involves a combination of inventory monitoring, demand forecasting, and timely ordering of new stock from suppliers.
20. Conversion Rate
The conversion rate in a retail context is the percentage of visitors to a store or website who make a purchase, out of the total number of visitors. This metric is crucial as it reveals the effectiveness of the retailer's marketing strategies, store design, product assortment, and price points in turning potential customers into actual buyers.
21. Customer Acquisition Cost (CAC)
Customer Acquisition Cost is the total expense that a business incurs to acquire a new customer. This includes all marketing and advertising costs spent on attracting the customer, divided by the number of customers acquired through those expenses. Retailers closely track CAC to determine the effectiveness and efficiency of their marketing initiatives and to understand the value that each customer brings to their business.
22. Lifetime Value (LTV)
Lifetime Value represents the total amount of money a customer is expected to spend with a business during their relationship. LTV helps retailers make strategic decisions about marketing spend, sales, and product development by predicting long-term profitability from customer relationships. It's calculated by looking at the average transaction value, purchase frequency, and customer lifespan.
23. Average Transaction Value (ATV)
Average Transaction Value is a retail sales metric that measures the average amount spent by customers per transaction during a specific period. It is calculated by dividing the total revenue by the number of sales transactions. Retailers analyze ATV to understand purchasing behaviors and to strategize on how to increase the value of each customer visit through up-selling or cross-selling.
24. Gross Margin
Gross Margin refers to the difference between sales revenue and the cost of goods sold (COGS), expressed as a percentage of sales revenue. It represents the proportion of money left over from revenues after accounting for the direct costs of goods sold, which can be used to pay for operating expenses and profits. A higher gross margin implies that a company retains more from each dollar of sales to cover its other costs and obligations.
25. Sell-Through Rate
The sell-through rate is a retail metric that compares the amount of inventory a retailer receives from a vendor to what is actually sold to the consumer, typically measured over a specific period of time. It is expressed as a percentage and helps retailers understand how well products are selling. A low sell-through rate indicates poor sales, while a high sell-through rate often means the product is in demand.
26. Shrinkage
Retail shrinkage is the loss of inventory due to factors such as theft, vendor fraud, damage in transit or in store, and administrative errors. Shrinkage is typically expressed as a percentage of sales and can significantly affect a retailer's bottom line. Retailers work to minimize shrinkage through various loss prevention strategies and regular inventory audits.
27. Dead Stock
Dead stock in retail refers to merchandise that has never been sold or has been in inventory for a long time, often because it is out of season or no longer in demand. Dead stock ties up capital and storage space, and can lead to additional losses if it requires clearance pricing to move. Retailers try to avoid dead stock through effective inventory management and demand forecasting.
28. Just-In-Time Inventory (JIT)
Just-In-Time Inventory is an inventory management strategy where materials and products are produced or acquired only as needed for immediate use rather than for future stockpiling. This approach reduces inventory costs by minimizing the amount of goods stored in warehouses. Retailers and manufacturers rely on precise forecasting and efficient supply chains to successfully implement JIT inventory, which can lead to reduced waste and increased efficiency.
29. Consignment
Consignment is a business arrangement where goods are left in the possession of an authorized third party to sell. Typically, the consignee agrees to pay the supplier of the goods only after the items have been sold. The consigner retains ownership until the goods are sold. This reduces risk for retailers because they do not have to invest upfront in inventory and instead pay only for what they manage to sell.
30. Dropshipping
Dropshipping is a retail fulfillment method where a store does not keep the products it sells in stock. Instead, when the store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product, which saves on inventory and warehousing costs. Dropshipping allows retailers to offer a wide range of products without significant upfront investment.
31. Private Label
Private label products are those manufactured by one company for sale under another company's brand. These are also known as store brands or own brands. Retailers might use private labels to offer exclusive products that differentiate them from competitors, typically at a lower cost compared to national brands. Private labels can lead to higher profit margins and greater control over product pricing, quality, and marketing.
32. Big Box Store
A big box store is a physically large retail establishment, part of a chain of stores, that typically sells a wide variety of merchandise, including apparel, electronics, home furnishings, and groceries. They are characterized by their large size, vast selection of products, and generally low prices due to economies of scale. Big box stores like Walmart, Target, and Best Buy are known for their expansive floor layouts and warehouse-like appearance.
33. Clearance Sale
A clearance sale is a retail strategy where goods are offered at significantly reduced prices to expedite their sale and clear out inventory. This type of sale often occurs when a store is looking to make room for new stock or is in the process of closing down. Items on clearance are priced lower than during traditional sales, and unlike promotional sales, the reduced prices of clearance items do not revert back to their original cost. The longer an item remains on clearance, the more its price may be reduced until it is eventually removed from inventory.
34. Flash Sale
A flash sale is a promotional event that offers substantial discounts or promotions for a very limited time period. These sales create a sense of urgency and are designed to drive a large volume of sales in a short timeframe. Flash sales can last anywhere from a few hours to a couple of days and are often unannounced, adding an element of surprise that encourages impulse buying. While they can be highly effective in moving excess inventory and attracting customers, they also carry the risk of eroding profit margins and attracting one-time buyers who may not return after the sale.
35. BOGO (Buy One, Get One)
BOGO stands for "buy one, get one" and is a common sales promotion where customers receive a second item for free or at a discounted price upon purchasing the first item. This strategy can encourage consumers to purchase more than they initially intended by offering perceived added value. However, it's important to note that BOGO deals may not always represent true savings, as sometimes the pricing can be adjusted to compensate for the "free" item.
36. Customer Experience (CX)
Customer experience, abbreviated as CX, encompasses all aspects of a customer's interaction with a company, from initial contact through marketing, sales, and post-purchase service. It is a strategic approach that focuses on managing and improving the way customers perceive their interactions with a brand. A positive CX is crucial for fostering customer loyalty and satisfaction, which can lead to increased brand value and repeat business.
37. Retail Apocalypse
The term "Retail Apocalypse" refers to the phenomenon where there is a significant closure of brick-and-mortar retail stores, especially in malls, due to various factors including the rise of e-commerce, changes in consumer behavior, and economic challenges. This trend has led to a shift in the retail landscape, with many retailers adapting to an increased online presence or reevaluating their physical store strategies.
38. Showrooming
Showrooming is a consumer behavior where individuals visit physical retail stores to examine a product but ultimately make their purchase online, often to take advantage of lower prices. This practice allows customers to physically interact with the merchandise before committing to a purchase.
39. Beacons
Beacons, in the context of retail, are small Bluetooth devices that transmit signals to nearby smart devices, such as smartphones, enabling retailers to send targeted messages and promotions to consumers within close proximity to a store. These devices can be strategically placed throughout a store or other locations to enhance the shopping experience by providing personalized offers and information.
40. Loyalty Program
A loyalty program is a marketing strategy designed to encourage repeat business by offering rewards, discounts, or other special incentives to customers who frequently shop with a retailer. These programs aim to build a long-term relationship between the customer and the business, often leading to increased spending and customer retention.
41. Dynamic Pricing
Dynamic pricing is a strategy where retailers adjust the prices of products in real-time based on various factors such as market demand, competitor pricing, inventory levels, and consumer behavior. This approach allows for flexible pricing that can respond quickly to changes in the market, potentially giving retailers a competitive edge.
42. Open-to-Buy
Open-to-Buy is a retail term not explicitly defined in the provided context. However, it generally refers to a budgeting and planning tool used by retailers to manage inventory purchases. It calculates the amount of new inventory that can be bought within a certain period without exceeding the planned stock levels.
43. Category Management
Category Management is a retail and purchasing concept in which the range of products purchased by a business or sold by a retailer is broken down into discrete groups of similar or related products; these groups are known as categories. It is a strategic approach aimed at optimizing the performance of each category by focusing on product assortment, pricing, promotions, shelf-space allocation, and supplier collaboration. The goal of category management is to provide better customer satisfaction and achieve business goals more effectively through a deep understanding of consumer needs within a specific category.
44. Assortment Planning
Assortment Planning refers to the process that retailers use to determine what products to offer for sale and in what quantities. This involves analyzing consumer buying patterns, sales data, and market trends to select a product mix that will meet consumer demand and maximize profits. Effective assortment planning ensures a variety of goods while balancing the risks of overstocking and understocking.
45. Basket Size
Basket Size is a term that refers to the total number of items or the quantity of merchandise a customer buys during a single shopping trip. This metric is often used to gauge consumer buying behavior, calculate average transaction values, and determine the overall effectiveness of store layouts, marketing campaigns, and product assortment strategies.
46. Impulse Buying
Impulse Buying occurs when a consumer purchases an item without prior planning or consideration. These purchases are typically driven by emotions or feelings rather than needs and can be triggered by various factors such as special promotions, strategic product placement (near the checkout area), or the appeal of the product itself. Retailers use different techniques like promotional signs and display placement to encourage impulse buying.
47. CRM (Customer Relationship Management)
CRM, or Customer Relationship Management, is a strategy for managing interactions and relationships with both current and potential customers. It involves using data analysis about customers' history with a company to improve business relationships, specifically focusing on customer retention and ultimately driving sales growth. A CRM system assists in collecting, organizing, and managing customer information, facilitating effective marketing, sales, and customer service activities.
48. UPC (Universal Product Code)
The UPC, or Universal Product Code, is a barcode symbology that is widely used worldwide for tracking trade items in stores. It consists of a 12-digit numerical code that uniquely identifies a product along with its associated barcode that can be scanned at the point of sale. Each UPC code is assigned to a single item, including its manufacturer and item-specific information, which helps in inventory management and sales tracking.
49. Consumer Touchpoint
Consumer touchpoints refer to the various stages and interactions where a customer comes into contact with a brand, product, or service. This can occur before, during, or after a purchase and includes moments of interaction through different channels such as advertising, social media, customer service, point-of-sale, and product use. The goal for retailers is to optimize these touchpoints to create a positive customer experience and streamline the path to purchase.
50. Units per transaction (UPT)
Units per Transaction, abbreviated as UPT, is a retail metric that measures the average number of items purchased in a single transaction by a customer. A higher UPT indicates that customers are buying more items per visit, which is generally seen as favorable for retailers because it suggests higher sales volumes and often increased profitability.
51. Restocking Fee
A restocking fee is a charge that some retailers apply when a customer returns a product. The fee is meant to cover the costs associated with processing the return and preparing the product for resale, such as re-inventorying, repackaging, and handling. Restocking fees are typically set as a percentage of the original sale price and are usually disclosed in the retailer's return policy.
52. Product Depth
Product depth, also known as merchandise depth or assortment depth, refers to the variety of choices available for a single product category within a store's product assortment. It reflects the range of sizes, colors, features, and models of a particular type of item a retailer offers. High product depth allows customers more options to choose from within a singular product line, which can enhance customer satisfaction and potentially increase sales.
53. Product Breadth
Product breadth, also known as product line breadth or width, is a term used to describe the number of different product lines that a company offers to its customers. For instance, Kellogg's showcases product breadth with its variety of product lines including ready-to-eat cereals, pastries and breakfast snacks, crackers and cookies, and frozen/organic/natural goods. Similarly, Nike demonstrates product breadth with its range of footwear, apparel, equipment, and accessories.
54. Storefront
A storefront refers to the facade or entryway of a retail store located on the ground floor or street level of a commercial building, often featuring one or more display windows. It is the part of the shop that faces the road and may include the door and windows for displaying merchandise. The storefront is an essential aspect of brick-and-mortar businesses, as it provides the first impression to potential customers and invites them into the store. It can also refer to the external appearance of a store in online contexts, where the website serves as the virtual storefront.
55. Franchise
A franchise is a business model where the owner (franchisor) licenses its operations, along with its products, branding, and knowledge, to another party (franchisee) in exchange for a franchise fee. This arrangement allows the franchisee to operate a business under the franchisor's established brand name for a specified number of years, often with ongoing support and assistance. Examples of successful franchises include Subway, McDonald's, and Dunkin' Donuts.
56. Sourcing
Sourcing in the context of retail and supply chain management refers to the process of identifying, evaluating, and selecting suppliers or vendors to obtain goods, services, or raw materials required for a business's operations. It is a critical function that involves activities such as conducting research, vetting suppliers, negotiating contracts, and ensuring the best value from the procurement process. ffective sourcing strategies are vital for maintaining quality, service levels, and cost-efficiency in a company's supply chain.
57. Retail Media Network
The term "Retail Media Network" is not explicitly defined within the provided context. However, based on industry knowledge, a Retail Media Network typically refers to an advertising platform that allows brands to reach consumers through digital media channels operated by retailers. These platforms leverage customer data and insights to deliver targeted advertising and promotional content across various touchpoints, including websites, mobile apps, and in-store displays.
58. Distribution Center
A Distribution Center (DC) is a specialized building designed to store and distribute products for retail or wholesale purposes. It serves as a central hub where goods are received from suppliers, sorted, stored temporarily, and then shipped out to various retail locations. Unlike traditional warehouses that mainly store products for a longer period, distribution centers focus on efficient product flow, rapid turnover, and order fulfillment to minimize the time between product arrival and shipping.
59. Vendor Managed Inventory (VMI)
Vendor Managed Inventory is a supply chain practice where the vendor (supplier) is responsible for maintaining the inventory levels of their products at the retailer's locations. The vendor monitors the stock and ensures that the retailer has an optimal level of inventory based on pre-agreed service levels and order points. VMI helps reduce inventory costs for the retailer and can enhance the supply chain efficiency by reducing stock-outs and overstock scenarios.
60. Retail Analytics
Retail Analytics encompasses a range of data analysis practices applied in the context of retailing to gain insights into customers, sales, and inventory management. Leveraging data from various sources such as point-of-sale systems, online transactions, customer feedback, and market trends, retailers can make better-informed decisions about marketing, merchandising, store layout, and other operational aspects to improve business performance and customer satisfaction.
61. Price Elasticity
Price Elasticity refers to the economic concept that gauges how the quantity demanded of a product changes in response to a change in its price. Products with high price elasticity will see a significant change in demand when the price alters, indicating that customers are sensitive to price changes for these items. Conversely, products with low price elasticity experience little change in demand when prices fluctuate, suggesting that consumers are less price-sensitive, often because there are fewer substitutes or they are necessitous goods. Understanding the price elasticity of their products allows retailers to optimize pricing strategies.
62. Anchor Store
An Anchor Store, also known as an anchor tenant, is a large retail store, such as a department store or supermarket, which serves as a pivotal draw to a shopping mall or center. Anchors are often well-known brands that drive foot traffic, enhancing the appeal of the shopping center to other potential retailers as a business location. They typically occupy the most prominent positions in the mall layout and receive favorable lease terms due to their critical role in attracting customers.
63. Pop-up Shop
A pop-up shop is a temporary retail space that serves as a short-term operation for brands, often to test new markets, introduce product lines, or generate brand awareness. These shops are strategically placed in areas with high foot traffic, such as city centers, malls, and busy streets, to maximize exposure and customer engagement. Pop-up shops have been known to significantly increase revenue, sometimes by 20-30% more than traditional stores, due in part to their lower startup costs.
64. Chargeback
A chargeback occurs when a payment made via debit or credit card is returned to the cardholder following a dispute over a transaction. This can happen for various reasons, including fraudulent charges, merchandise not received, or duplicate charges. The process involves the card issuer reviewing the dispute and, if deemed valid, reversing the transaction and retrieving the funds from the merchant to return to the cardholder. Chargebacks differ from refunds in that they are initiated by the consumer through the card issuer rather than directly by the merchant.
65. Pop-up Store
The term "pop-up store" is synonymous with a pop-up shop and refers to the same concept of a temporary retail space. These stores are set up for a limited time to capitalize on seasonal demand, trends, or to offer an experiential retail experience. Pop-up stores are versatile and can be found in various formats, from freestanding structures to spaces within existing retail environments.
66. Contactless Payment
Contactless payment is a method of payment that does not require physical contact between a payment card and a reader. Instead, transactions are completed by tapping or holding a contactless-enabled card or mobile device close to a contactless-enabled terminal. This technology, also known as "tap to pay" or "tap and go," is designed for speed and convenience, allowing for faster transactions compared to traditional methods
67. Retail Clienteling
Retail clienteling is a sales technique used by retail professionals to establish long-term relationships with key customers based on data about their preferences, behaviors, and purchases. This personalized service approach leverages customer information to provide tailored recommendations, offers, and services that enhance the shopping experience and increase loyalty. Through clienteling, retailers aim to create a memorable and individualized interaction, ensuring customers feel valued and more inclined to return.
68. Buy now, pay later (BNPL)
Buy now, pay later is a financing arrangement that allows consumers to purchase items immediately and pay for them over time without traditional credit checks. Often, these arrangements involve splitting the cost into smaller, interest-free payments, though some BNPL providers may charge fees or interest for extended payment terms. BNPL is popular in e-commerce platforms and is offered as an alternative to credit card payments, with the aim of making larger purchases more manageable for customers.
69. Fulfillment Center
A fulfillment center is a large warehouse specifically designed for fulfilling customer orders swiftly and efficiently, particularly for e-commerce. Unlike traditional warehouses, which primarily focus on storing inventory for long periods, fulfillment centers specialize in the entire order fulfillment process. This includes receiving, processing, packing, picking, and shipping items directly to customers. The emphasis is on maximizing efficiency and turnaround times to meet increasing consumer expectations for prompt delivery.
70. Geo-Fencing
Geo-fencing is a technology that creates a virtual boundary around a physical location using GPS, RFID, Wi-Fi, or cellular data. When a mobile device enters or exits the defined geofenced area, it triggers an automatic response, such as a push notification, text message, or alert to the device. In retail, geo-fencing can be used for targeting marketing campaigns, triggering promotions when potential customers are near a store, or even for gathering valuable data on consumer behavior patterns.
71. Inventory Turnover
Inventory turnover is a financial ratio that measures how many times a company's inventory is sold and replaced over a given period. It reflects the efficiency of a company in managing and selling its stock[14]. A higher inventory turnover rate can indicate robust sales or effective inventory management, whereas a lower turnover might suggest overstocking, obsolescence, or weak sales.
72. Key Performance Indicator (KPI)
A Key Performance Indicator is a quantitative measure used to evaluate the success of an organization, employee, or process in meeting objectives for performance. KPIs are typically defined according to industry standards or company-specific goals and can be tailored to reflect different levels of the organization, such as departments, teams, or individual employees. Examples of KPIs include sales revenue, customer retention rates, and inventory turnover.
73. Layaway
Layaway is a purchasing agreement in which a retailer allows a customer to pay for merchandise in installments over time, while the retailer holds the item until the final payment is made, at which point the customer can take possession. This payment model is beneficial for customers who do not want to use credit or cannot afford the full price upfront but want to secure an item at its current price or ensure its availability.
74. Mobile Commerce (M-Commerce)
Mobile commerce, or m-commerce, refers to commercial transactions conducted electronically via mobile devices. It encompasses a range of activities such as purchasing products through a mobile-optimized online store, using apps for shopping, or making payments with mobile wallets. The rise of smartphones and tablets has led to significant growth in m-commerce, changing consumer shopping habits with the convenience of being able to shop from anywhere.
75. Net Sales
Net sales are the total revenue generated from sales of goods or services, minus returns, allowances, and discounts. This figure represents the actual sales that contribute to a company's profit and is a key metric for assessing the health and performance of a business.
76. Omnichannel Fulfillment
Omnichannel fulfillment involves a comprehensive approach to order delivery where retailers use all available channels and distribution centers to fulfill customer purchases. This strategy provides a seamless and cohesive customer experience, regardless of where the sale takes place — online, via mobile, or in a physical store. Retailers offering omnichannel fulfillment aim to improve customer service by offering flexible options like buy online, pick-up in-store (BOPIS), ship-from-store, and same or next-day delivery.
77. Price Adjustment
Price Adjustment refers to the retailer's policy of refunding the difference if the price of an item drops within a certain period after purchase, typically 14 to 30 days. For instance, if a customer buys a TV for $300 and its price decreases by $100 shortly thereafter, they can request a price adjustment from the retailer and receive the $100 difference.
78. Quick Response (QR) Code
Quick Response (QR) Code is a type of two-dimensional barcode that can be easily scanned using a digital device, such as a smartphone, to quickly access stored information. Unlike traditional barcodes, QR codes can store data both horizontally and vertically, allowing them to hold a significant amount of information in a compact format.
79. Radio Frequency Identification (RFID)
Radio Frequency Identification (RFID) is a technology that uses radio waves to automatically identify and track tags attached to objects. RFID systems consist of tags and readers; the tags contain electronically stored information that can be read from up to several meters away without the need for a direct line of sight.
80. Sales Associate
Sales Associate is a role within retail environments responsible for various tasks including customer service, stocking shelves, and assisting customers with product selection. Sales associates may also operate cash registers and process payments, though this function can be specifically designated to cashiers in some retail settings.
81. Scan-Based Trading (SBT)
Scan-Based Trading (SBT) is a business model where suppliers retain ownership of inventory within retail stores until the items are scanned at the point of sale. This approach can lead to operational savings, improved sales, and reduced inventory costs for retailers, while also allowing suppliers to better manage their products and reduce the risk associated with unsold inventory.
82. Trade Area
A trade area is the geographic region from which a store, mall, or shopping center draws its customers. The extent of a trade area is determined by several factors including the location's accessibility, the presence of competing businesses, and the type of goods or services offered. It is an essential concept for retailers when conducting market analysis, selecting new sites, or devising marketing strategies to target potential customers within that specific area.
83. Upselling
Upselling is a sales technique where a seller encourages a customer to purchase more expensive items, upgrades, or other add-ons in an attempt to make a more profitable sale. This may involve pointing out additional features, greater value, or longer warranties that could benefit the customer. While it aims to increase the average transaction size, successful upselling typically provides the customer with perceived added value, not just increased cost.
84. Value-Added Service
Value-added services refer to supplementary services that enhance a product’s existing features, contribute to its value, and give a business a competitive advantage over others that do not offer the same extras. These services can include free installations, extended warranties, or customer loyalty programs. They are often used to differentiate a company from competitors and can influence customer satisfaction and retention.
85. Warehouse Club
A warehouse club, also known as a wholesale club, is a retail store that sells a wide variety of merchandise in bulk or at high volumes, typically to members who pay an annual membership fee. These clubs generally offer products at lower prices by reducing overhead costs and purchasing directly from manufacturers. Examples include Costco, Sam’s Club, and BJ's Wholesale Club.
86. Live shopping
Live shopping is an innovative fusion of traditional in-store experiences and the convenience of online purchasing, where sellers can market and customers can buy products in real-time through live video streams. This interactive form of shopping often involves hosts, such as influencers or celebrities, who showcase products on digital platforms to engage with and influence potential buyers.
87. Zoning
Zoning, in the context of retail, refers to various strategies employed to optimize the layout and organization of a store. It includes the practice of facing, which ensures products are pulled forward on shelves with labels visible, creating an appealing and accessible display for customers. Zoning also encompasses the division of sales territories into areas for efficient scheduling of sales calls, as well as strategic planning of store layouts to enhance customer experience and maximize sales success.
88. Endcap
An endcap is a marketing strategy used in retail stores, where displays are placed at the ends of aisles to attract shoppers' attention and promote products. These displays are designed to be eye-catching and can feature new products or special deals to entice customers and potentially increase sales.
89. Barcode
Barcode technology is widely utilized across various industries for its ability to encode information that can be scanned electronically, facilitating processes like inventory management and checkout efficiency. Barcodes are read using laser or image-based technology, and they play a crucial role in tracking products, shipments, and locations, among other applications.
90. Self-checkout
Self-checkout systems allow customers to independently process their purchases without the need for cashier assistance, thereby reducing wait times and increasing efficiency during peak hours. These systems have evolved since their introduction in 1986 and offer benefits such as reduced labor costs and improved customer flexibility. Retailers adopt self-service checkout systems to better compete and operate more profitably, with various types including kiosks, mobile scanners, and advanced AI-powered solutions like Amazon Go.
91. Retail technology
Retail technology encompasses a wide array of tools, software, systems, and devices that enhance the shopping experience for customers while streamlining operations for retailers. Examples include inventory management systems, customer relationship management (CRM) software, point of sale (POS) systems, e-commerce platforms, and emerging technologies such as augmented reality for virtual product trials.
92. Stylist
In the retail context, a stylist is a professional who assists customers in choosing and coordinating outfits, accessories, and even entire wardrobes. They have a strong understanding of fashion trends, body types, color theory, and personal style. Stylists are often found in clothing stores, working as personal shoppers or offering their services through e-commerce platforms, ensuring customers make purchases they feel confident about.
93. Journey Mapping
Journey mapping is a strategic process in marketing and customer experience management. It involves creating a visual representation of the customer's journey with a brand or within a store, from initial contact or awareness through various touchpoints and eventually to post-purchase interactions. These maps help businesses identify pain points, moments of truth, and opportunities to enhance the customer experience at every stage.
94. Kiosk
A kiosk in the retail sector refers to a small, stand-alone booth typically located in high-traffic areas such as shopping malls, airports, or the pathways of big department stores. Kiosks are used for a variety of purposes, including selling goods or services, providing information, or offering interactive experiences like digital product catalogs or customer service stations. They can serve as an effective space-saving solution for retail sales and promotion.
95. Loss Prevention
Loss prevention is a key component of retail management, focused on reducing theft, fraud, errors, and waste that contribute to lost profits. This includes strategies and practices such as employing security personnel, utilizing surveillance systems, training employees in anti-theft techniques, electronic article surveillance tags, and implementing strict cash-handling and inventory control procedures.
96. FIFO
"FIFO" stands for "First In, First Out," which is a method used in inventory management and accounting to manage the stock of a company. This approach dictates that the goods that are acquired first are the ones to be sold or used first. FIFO is particularly useful because it assumes that the oldest inventory items are the first to be used or sold, which often aligns with the actual physical flow of goods. This method is beneficial in minimizing waste due to perishability or obsolescence, and it helps in providing a more accurate valuation of inventory for financial reporting purposes by reflecting the chronological flow of goods.
97. Retail Theft
Retail theft, also known as shoplifting, is the act of stealing merchandise from a retail establishment without paying for it. It involves the unauthorized taking of goods with the intent of permanently depriving the retailer of the value of those goods. Retail theft contributes significantly to retail loss and affects both large and small businesses. It can come in various forms, from individuals committing petty theft to organized groups executing more elaborate schemes. To combat retail theft, businesses employ several strategies, such as surveillance cameras, security tags on merchandise, and trained loss prevention personnel.
98. Out-of-Stock
An Out-of-Stock situation occurs when a retailer or supplier has run out of inventory for a specific product and cannot fulfill customer orders or store shelf demand immediately. This scenario can lead to missed sales opportunities and a negative customer experience, as consumers may turn to competing retailers or brands to find what they need. Causes of out-of-stock conditions include forecasting errors, supply chain disruptions, increased or unexpected customer demand, and inventory mismanagement. Retailers aim to minimize these occurrences through better inventory planning and management practices.
99. Personal Shopper
A Personal Shopper is a professional service provider who assists individuals in selecting and purchasing apparel, groceries, gifts, or other goods. The role of a personal shopper is to provide expertise and advice tailored to the client’s needs, preferences, and lifestyle. They save clients time by selecting items that match their tastes and requirements and can also provide styling tips and personal attention that may not be available during a standard shopping experience. Personal shoppers can work independently or be employed by department stores, boutiques, or online shopping platforms.
100. Social Commerce
Social Commerce is a subset of electronic commerce that involves selling products direct through social media platforms. It leverages the interactive and social aspects of social networks to promote and sell products and services. Social commerce enables users to complete the purchase process—from product discovery to checkout—without leaving the social media environment. It capitalizes on the influence of social media recommendations, shares, and reviews, and often utilizes functionalities such as shoppable posts, live streaming, and in-app stores.
