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An alphabetical glossary of retail and business terms, plus their definitions. In business and retail, there is a lot of jargon, or normal everyday words, but with different meanings.
Business and retail enthusiasts from all walks of life have become more interested in the meanings of these words.
An anchor store is a large, prominent retail store that serves as a primary draw for customers to a shopping mall or center. It often has a long-term lease and provides steady revenue for the mall due to its ability to attract a significant number of shoppers.
Average Transaction Value (ATV)
ATV is the average amount spent by customers in a single transaction at a business. It is calculated by dividing the total sales over a period by the number of transactions during that same period. A higher ATV indicates that customers are purchasing more expensive items or a larger quantity of products per sale.
AOV is an e-commerce metric that measures the average dollar amount spent each time a customer places an order on a website or application. It is calculated by dividing the total revenue by the number of orders.
Aging inventory refers to items that have been in stock for an extended period without being sold. This can indicate slow-moving or obsolete products that may consume valuable resources or warehouse space. Businesses analyze aging inventory to manage stock levels effectively and prevent excess inventory accumulation.
Audit
An audit is a systematic examination and evaluation of an organization’s financial statements, processes, or compliance with regulations to ensure accuracy, integrity, and adherence to standards and laws. Audits can be conducted internally by employees or externally by independent auditors and are essential for maintaining transparency and trust among stakeholders.
Assortment Planning
Assortment planning in retail involves selecting which products and variations to carry and sell during a specific season. It focuses on breadth (number of product types) and depth (variety within each type) to meet customer demand and maximize profits.
Allocation
Allocation in retail refers to distributing, tracking, and managing inventory across various locations or sales channels to meet customer demand efficiently. It ensures optimal logistics operations, cost management, and timely delivery.
Ad Impression
An ad impression is the number of times an advertisement is displayed to users, regardless of whether it is clicked. It measures the reach of an ad campaign.
Ad Spend
Ad spend is the total amount of money invested in advertising campaigns across different channels, such as social media, TV, and print media. It helps businesses promote their products or services and calculate ROI.
Affiliate Marketing
Affiliate marketing involves promoting another company’s products or services and earning a commission for each sale made through the affiliate’s referral link. It’s a performance-based marketing strategy that leverages word-of-mouth recommendations.
After-Sales Service
After-sales service includes ongoing support provided to customers after purchasing a product or service. It encompasses resolving complaints, offering technical support, and providing maintenance to enhance customer satisfaction and loyalty.
Abandoned Cart
An abandoned cart occurs when a potential customer adds items to their online shopping cart but does not complete the purchase. This results in lost sales and affects revenue.
At-the-Market Offering (ATM)
An ATM offering allows companies to raise capital by selling shares directly into the market at prevailing prices. It provides flexibility and can be executed over time to meet funding needs.
B2B (Business-to-Business)
E-commerce transactions are conducted between businesses.
B2C (Business-to-Consumer)
E-commerce transactions are conducted between a business and individual consumers.
Backward Integration
Backward integration is a strategic move by a retail company to acquire control over its suppliers or to internalize supplier functions within the company itself. This approach allows retailers to streamline their supply chain, reduce costs, and gain more control over the production process. An example of backward integration in retail is when a clothing store starts producing its fabric or a supermarket begins farming its produce.
Balance Sheet
A balance sheet is a financial statement that provides a snapshot of a retail company’s financial health at a specific time. It lists the company’s assets (what it owns), liabilities (what it owes), and shareholders’ equity (the difference between assets and liabilities). Retailers use balance sheets to track performance, assess financial standing, and make informed decisions about asset management and future investments.
Bar code
Bar codes are machine-readable representations of data that encode product information into bars and alphanumeric characters. In retail, bar codes are scanned using barcode readers or scanners to quickly and accurately capture product details such as price, size, and stock levels. This technology enhances the point of sale efficiency, simplifies inventory management, and reduces pricing and stock control errors.
A backorder occurs when a retail product is out of stock but still in high demand, leading customers to place orders that cannot be immediately fulfilled. The retailer promises to deliver the product once it becomes available again. Backorders can indicate strong demand for a product but may also reflect challenges in inventory management. Retailers must communicate effectively with customers regarding expected wait times and fulfillment of back-ordered items.
Beauty Store
A beauty store, or a cosmetics store or beauty supply store, is a specialty retail business that sells beauty-related products such as cosmetics, hair-care items, skincare products, and beauty tools. Beauty stores range from large chains offering a glamorous shopping experience to smaller, independent retailers focusing on niche markets. They cater to consumers seeking personal grooming and beauty enhancement products.
Big Box Retailer
A big box retailer is a large retail establishment, typically part of a chain, that offers a wide variety of merchandise across multiple categories. These stores are characterized by their expansive floor space, a vast selection of products, and often lower prices due to economies of scale. Big box retailers are designed to serve as one-stop shops for consumers, providing everything from groceries to electronics under one roof.
A brick-and-mortar business is a traditional retail store that operates from a physical location where customers can visit in person. This model contrasts with e-commerce, which involves online-only sales. Brick-and-mortar stores allow customers to browse products, interact with sales representatives, and make purchases on-site. Examples include local shops, department stores, and supermarkets.
Brick and Click
The bricks-and-clicks business model combines both physical retail locations and online stores. This hybrid approach allows businesses to leverage the strengths of both channels, offering customers the convenience of online shopping and the tangible experience of visiting a store. Major retailers like Target and Walmart exemplify this model by maintaining physical stores and online platforms.
BOPIS (Buy Online, Pick Up In-Store)
BOPIS is an omnichannel retail strategy where customers purchase items online and pick them up at a physical store. This method enhances convenience for shoppers, reduces shipping costs, and drives foot traffic to brick-and-mortar locations. BOPIS orders are often fulfilled faster than traditional online orders since the products are already available in-store.
Bounce Rate
In digital analytics, the bounce rate measures the percentage of visitors who leave a website after viewing only one page without taking any further action. A high bounce rate indicates that users are not engaging with the site, which could suggest issues with content relevance or user experience. Reducing bounce rates is crucial for improving site engagement and conversion rates.
Boutique
A boutique is a small retail store specializing in fashionable clothing and accessories. Unlike larger retail stores, boutiques offer a curated selection of unique, high-quality items often sourced in limited quantities. Boutiques focus on personalized customer service and exclusive merchandise, making them distinct from mass-market retailers.
Brand equity refers to the value a brand adds to a product beyond its functional benefits. It encompasses brand recognition, awareness, and customer experience. Positive brand equity allows companies to charge premium prices and fosters customer loyalty, directly impacting sales volume and profit margins.
Breadth
In retail, breadth refers to the variety of product categories a store offers. For instance, a smoke shop might sell cigars, pipes, and humidors. Breadth is essential for meeting diverse customer needs and staying competitive. A broad product assortment can attract a wider customer base and cater to various preferences.
Broken Sizes
Broken sizes refer to the incomplete range of sizes available for a particular product, often due to high sales of certain sizes. If popular sizes are consistently out of stock, this situation can lead to stock imbalances and missed sales opportunities.
Bulk
Bulk refers to purchasing large product quantities, typically at a discounted rate, by businesses or resellers. These businesses often have to meet minimum order quantities set by the supplier to buy in bulk to reduce the per-unit costs of items. Bulk buying is expected in wholesale and warehouse clubs, where consumers benefit from lower prices for larger quantities.
Bundle Pricing
Bundle pricing is a strategy where multiple products are sold together at a lower price than if purchased separately. This approach can increase sales volume, move inventory faster, and provide added value to customers. Bundling is commonly used in promotions and special offers.
Card Terminal
A card terminal, also known as a point-of-sale (POS) terminal or credit card reader, is a device that enables merchants to process electronic transactions involving debit and credit cards. By reading the chip or magnetic stripe on a card, the terminal connects to payment networks to authorize and complete the transaction, providing both buyer and seller a receipt.
Carrying Cost
Carrying cost, or holding cost, encompasses all expenses related to storing unsold inventory. This includes warehousing costs, insurance, depreciation, and opportunity costs. Efficient inventory management aims to minimize carrying costs while ensuring sufficient stock is available to meet demand.
Cannibalization
In retail, cannibalization occurs when a new product or store location reduces sales of existing products or locations owned by the same company. While introducing new offerings can drive growth, retailers must balance innovation with the risk of eating into their market share.
A category killer is a large retail chain store that dominates a specific product category, often rendering smaller competitors obsolete. Examples include big-box stores like Best Buy in electronics or Toys “R” Us in toys. Their extensive product range, competitive pricing, and significant market presence make them industry leaders within their categories.
Cashwrap
The cashwrap, or checkout counter, is the area within a retail store where customers complete their purchases and make payments. It typically includes POS systems, cash drawers, and receipt printers and often features impulse-buy items strategically placed to capture last-minute sales.
Cash and Carry Wholesaler
A cash-and-carry wholesaler operates a warehouse-style retail environment where businesses can purchase goods in bulk. These wholesalers offer discounted prices for direct, immediate payment and self-service shopping, which helps lower operational costs. Examples include Costco and Sam’s Club.
Category Management
Category management is a retail strategy focused on managing a group of products as a singular business unit to optimize sales and profitability. This approach ensures that the product assortment aligns with consumer needs, enhances the shopping experience, and improves overall category performance.
Chain Store
A chain store is one of multiple retail outlets under the same brand and corporate structure, offering standardized merchandise across locations. Chain stores benefit from economies of scale, consistent branding, and centralized management. Examples include Walmart, Starbucks, and Target.
Chargeback
A chargeback is a transaction reversal initiated by the cardholder’s issuing bank, usually due to disputes over fraudulent activity, product quality, or service issues. Chargebacks are essential consumer protections but can be costly for retailers, who may face lost revenue and additional fees.
Click and Collect
Click and collect is a shopping service where customers buy products online and pick them up at a physical store. This method combines the convenience of online shopping with the immediacy of in-store pick-up, reducing shipping costs and often expediting the fulfillment process.
Clearance Sale
A clearance sale is a promotional event where retailers sell off excess inventory at significantly reduced prices to free up space for new stock. Clearance sales help mitigate carrying costs and recover capital invested in unsold goods. They are often seasonal or occur during store renovations or closures.
Clienteling
Clienteling is a personalized sales technique retail associates use to enhance customer loyalty and sales. By leveraging data from previous purchases, preferences, and interactions, sales associates can tailor their approach, providing customized recommendations and exceptional service. This fosters deeper relationships between the brand and its customers, ultimately driving repeat business.
Cloud POS
A Cloud Point of Sale (POS) system is an advanced POS solution that operates online on cloud servers rather than local software. This allows for real-time data synchronization across multiple devices and locations, enabling retailers to remotely manage inventory, sales, and customer information. It enhances operational efficiency, reduces IT costs, and provides scalability for growing businesses.
Cost-of-Goods Sold (COGS)
Cost of Goods Sold (COGS) represents the direct costs associated with producing or purchasing a retailer’s products during a specific period. It includes expenses like raw materials, manufacturing labor, and shipping costs. Calculating COGS is essential for determining gross profit and overall financial performance.
Comps
Comps, short for comparable store sales, are a metric used to evaluate the performance of retail stores that have been open for more than a year. This measure helps retailers assess the health of their established locations by comparing current sales to the same period in previous years. Positive comps indicate growth, while negative comps may signal potential issues.
In retail, consignment involves selling goods on behalf of another party, typically a vendor or manufacturer, without taking ownership of the inventory. Retailers pay the consignor only after the items are sold, reducing the financial risk and upfront costs. This arrangement benefits both parties by widening market reach and expediting product sales.
Convenience Store
A convenience store is a small retail business that offers a limited variety of everyday items, such as groceries, snacks, beverages, and personal care products. These stores prioritize accessibility and quick service, often operating long hours and being located in easily accessible areas like gas stations or urban centers.
Consumers
Consumers are individuals who purchase goods or services for personal use rather than for resale or business purposes. Understanding consumer behavior, preferences, and needs is crucial for retailers aiming to develop effective marketing strategies and attract and retain their target audience.
Conversion
In the retail context, conversion refers to the process of turning potential customers into actual buyers. The conversion rate is a key performance indicator measuring the percentage of visitors or leads who complete a desired action, such as purchasing. Higher conversion rates reflect successful sales strategies and effective customer engagement.
Cross Selling
Cross-selling involves recommending complementary or related products to customers during the purchase process. This strategy aims to enhance the shopping experience and increase the average transaction value by offering additional items that meet customers’ needs or interests. For example, suggesting a bottle of wine when a customer buys a cheese platter.
Customer Lifetime Value (CLV) is a metric that estimates the total revenue a retailer can expect to generate from a single customer throughout their entire relationship with the brand. CLV provides insights into the long-term profitability of customer relationships, helping businesses make informed decisions about marketing investments, customer retention strategies, and personalized experiences.
Data Mining
Data mining in the retail industry involves using computers and automation to search large sets of data for patterns and trends. This process helps businesses gain valuable insights into customer behavior, enabling them to develop more effective marketing strategies, increase sales, and decrease costs. For example, by analyzing customer age, gender, and preferences, retailers can tailor personalized loyalty campaigns.
Days Sales in Inventory (DSI)
Days Sales in Inventory (DSI) is a metric that measures the average number of days it takes for a company to sell off its inventory. It is calculated by dividing the ending inventory by the cost of goods sold and multiplying by 365. A high DSI indicates inefficiency in managing inventory, while a low DSI suggests efficient inventory turnover. For instance, a retailer with a DSI of 30 days sells its entire inventory every month.
Dead Stock
Dead stock refers to unsold merchandise or inventory that has not been sold or used within a certain period. This can include seasonal items like holiday decorations or outdated electronics. Dead stock complicates inventory management, increases carrying costs, and occupies valuable warehouse space. Retailers often use strategies like bundling or clearance sales to mitigate dead stock.
Delivery Time
Delivery time in the retail industry is the period between placing an order and delivering it to the customer. It is crucial for managing supply chains and inventory, as it determines how far in advance orders need to be placed to ensure timely delivery. Efficient delivery times enhance customer satisfaction and optimize inventory levels.
Demand Forecasting
Demand forecasting involves predicting future customer demand for products based on historical data, market trends, and other factors. Accurate demand forecasting helps retailers manage inventory levels, reduce stockouts, and optimize supply chain operations. For example, a clothing retailer might use past sales data to forecast demand for winter coats.
Department Store
A department store is a large retail establishment offering various goods organized into different departments, such as clothing, electronics, and home goods. These stores provide a one-stop shopping experience and often feature additional services like cafes and beauty salons. Examples include Macy’s and Nordstrom.
Depth
In retail, depth refers to the assortment of products offered within a particular category. Greater depth means a wider variety of options for a single product type, such as multiple brands and styles of jeans. Depth allows retailers to cater to diverse customer preferences and increase sales within specific categories.
Direct Marketing
Direct marketing involves promoting products or services directly to customers through various channels like email, mail, or phone calls. This approach allows retailers to target specific customer segments with personalized messages, increasing the likelihood of conversion. Examples include catalog mailings and email newsletters.
Direct-to-Consumer (DTC)
Direct-to-Consumer refers to brands that sell their products directly to customers without intermediaries like wholesalers or retailers. This model allows companies to control their brand experience, gather customer data, and improve profit margins. Examples include Warby Parker and Dollar Shave Club.
Discount
A discount is a reduction in the regular price of a product or service, often used to attract customers and boost sales. Discounts can be seasonal, promotional, or clearance-based. For example, Black Friday sales offer significant discounts to encourage high-volume purchases.
Digital Shelf
The digital shelf refers to the online representation of products available for purchase. It includes product images, descriptions, reviews, and pricing information. Effective digital shelf management ensures that products are easily discoverable and appealing to online shoppers, enhancing the overall e-commerce experience.
Display
In retail, a display is a visual presentation of products designed to attract customer attention and encourage purchases. Displays can be window setups, end caps, or special promotional areas within a store. Effective displays highlight key products and create an engaging shopping environment.
Distribution Channel
A distribution channel is how products move from the manufacturer to the end consumer. Channels can include wholesalers, retailers, and direct sales. Efficient distribution channels ensure timely product availability and optimize supply chain operations.
Dollar Store
A dollar store is a retail outlet that sells a variety of products at low prices, typically around one dollar. These stores offer affordable options for everyday items, attracting budget-conscious consumers. Examples include Dollar Tree and Dollar General.
Doorbuster
A doorbuster is a deeply discounted product offered for a limited time to attract customers to a store, often during major sales events like Black Friday. Doorbusters create urgency and drive foot traffic, leading to increased overall sales.
Drop-off Location
A drop-off location is where customers can return or pick up products. These locations provide convenience for online shoppers who prefer not to wait for home delivery. Examples include Amazon Locker and UPS Access Point.
Dropshipping
Dropshipping is a retail fulfillment method where the retailer does not keep products in stock but transfers customer orders to a third-party supplier, who then ships the products directly. This model reduces inventory costs and allows retailers to offer various products.
Dual Distribution
Dual distribution involves companies using two or more channels to reach the same target market. For example, a brand might sell products through its online store and third-party retailers. This strategy maximizes market reach and sales opportunities.
Dynamic Pricing
Dynamic pricing is a strategy in which retailers adjust product prices based on real-time supply and demand, competitor pricing, and other market factors. This approach allows retailers to maximize revenue and remain competitive. For example, e-commerce platforms like Amazon use dynamic pricing to optimize sales.
Demographics
Demographics refer to statistical data about the population and particular groups, such as age, gender, income level, and education. In retail, understanding demographics helps businesses tailor their marketing strategies and product offerings to meet the needs of specific customer segments. For instance, a retailer targeting young adults might focus on trendy, affordable fashion items.
Eco-friendly Fashion
Eco-friendly fashion promotes sustainable practices throughout clothing manufacturing, prioritizing methods that reduce environmental impact. This includes using organic or recycled materials, minimizing waste, and conserving water and energy—brands advocating for eco-friendly fashion aim to create stylish and environmentally responsible garments.
Eco-friendly Materials
Eco-friendly materials have a lower environmental footprint, often derived from renewable resources. Examples include organic cotton, bamboo, hemp, and recycled fabrics. These materials are produced to minimize pollution and conserve resources, contributing to more sustainable fashion and retail industries.
E-commerce
E-commerce involves buying and selling goods or services online. It includes retail giants like Amazon and niche markets like Etsy. E-commerce provides consumers the convenience of shopping from anywhere, offering a vast range of products and efficient delivery services.
Editorials
Editorials in retail refer to curated content showcasing products in a storytelling context. Often found in magazines and online publications, editorials highlight trends, styling tips, and brand stories, helping to attract and inform consumers while boosting brand image.
E-fulfillment
E-fulfillment is the process of managing and delivering online orders. It involves inventory management, order processing, packaging, and shipping. Effective e-fulfillment ensures quick, accurate deliveries and enhances customer satisfaction, which is crucial for success in e-commerce.
Email Blast
An email blast is a marketing technique where a single promotional email is sent to an subscriber list of recipients simultaneously. It’s used to announce sales, new products, or special events. While effective, balancing frequency is crucial to avoid overwhelming customers or being marked as spam.
Embroidery
Embroidery involves decorating fabric with needle and thread or yarn to create designs. In retail, embroidered products add a touch of craftsmanship and personalization, often seen in high-end fashion, team uniforms, and customized apparel.
Employee Discount
An employee discount is a benefit where staff members can purchase store products at reduced prices. This perk helps build employee loyalty, increases product knowledge, and encourages staff to promote the brand outside of work.
Ending Inventory
Ending inventory is the value of goods available for sale at the end of an accounting period. It’s critical for calculating cost of goods sold (COGS) and assessing financial health. Properly managing ending inventory helps retailers maintain profitability and optimize stock levels.
Endcap
An endcap is a display in retail stores at the end of an aisle. These prime spots promote featured products, seasonal items, or special offers, catching shoppers’ attention and driving impulse purchases.
Ethical Fashion
Ethical fashion refers to clothing production prioritizes fair labor practices, good working conditions, and sustainable sourcing. It aims to support workers’ rights and minimize harmful environmental impacts, promoting social responsibility.
Ethical Sourcing
Ethical sourcing involves obtaining materials and products responsibly and ensuring that suppliers adhere to fair labor practices, environmental sustainability, and humane treatment standards. Retailers adopting ethical sourcing often promote transparency and social responsibility within their supply chains.
Everyday Low Price (EDLP)
Everyday Low Price is a pricing strategy in which products are consistently priced low, avoiding frequent sales or discounts. Retailers like Walmart use this model to provide value to customers, simplify purchasing decisions, and build trust.
Event Marketing
Event marketing involves creating and promoting events to engage customers and generate interest in products or brands. Examples include product launches, in-store demonstrations, or pop-up shops. Effective event marketing can enhance brand experience and drive sales.
Exclusive Collection
Exclusive collections are limited-edition lines of products available only through specific retailers or for a limited period. These collections create urgency and desirability among customers, often generating significant media buzz and higher sales volumes.
Excess Inventory
Excess inventory, also known as overstock, refers to unsold goods that exceed consumer demand. Holding excess inventory ties up capital and storage space, prompting retailers to offer discounts, clearance sales, or donate surplus items.
Experience Store
Experience stores focus on providing immersive and interactive shopping experiences beyond just selling products. Features may include hands-on demos, personalized services, and lifestyle elements to enhance customer engagement and brand loyalty.
External Theft
External theft is the theft of retail merchandise by customers or other individuals outside the company. This includes shoplifting, organized retail crime, and fraud. Implementing security measures like surveillance systems and security tags is essential to mitigate losses.
Electronic Shelf Label (ESL)
Electronic shelf labels (ESLs) are digital price tags placed on retail shelves. They display real-time pricing and product information, which are updated wirelessly. ESLs improve pricing accuracy, enable dynamic pricing strategies, and save labor costs.
E-tailer
An e-tailer, or electronic retailer, sells products exclusively online. E-tailers offer a wide range of goods, often at competitive prices due to their lower overhead compared to brick-and-mortar stores. Examples include Amazon, Zappos, and Warby Parker.
Fast fashion is a retail business model that focuses on rapidly replicating recent catwalk trends and high-fashion designs, mass-producing them at a low cost, and bringing them to retail stores quickly while demand is at its highest. This method leverages trend replication and low-quality materials like synthetic fabrics to produce inexpensive styles. The fast fashion industry relies on a highly responsive supply chain to support a constantly changing product assortment.
Fashion Pyramid
The fashion pyramid is a market segmentation tool that categorizes fashion brands based on price, quality, and creativity. At the top of the pyramid are haute couture and supreme luxury brands known for their high-quality fabrics and exclusive customer service. Below them are ready-to-wear or aspirational luxury garments, followed by diffusion lines, bridge brands, and mass-market products at the base. Each level targets different consumer segments and offers unique characteristics.
Fashion seasons dictate the timing of when collections are delivered to stores and subsequently go on sale. The primary seasons are spring/summer and fall/winter. Spring/summer collections typically arrive between January and March, with sales peaking from mid-June to mid-July. Fall/winter collections are delivered from July to September, with sales extending through the winter months. These seasonal cycles influence retail strategies and inventory management.
Fashion Week
Fashion Week is a significant event in the fashion industry where designers, brands, and fashion houses showcase their latest collections in runway shows. These events, held biannually in major fashion capitals, influence upcoming fashion trends and provide a platform for designers to introduce new products to buyers and the media. Fashion weeks generate substantial economic benefits for local economies through increased revenue for hotels, restaurants, and retail establishments.
Financial Statements
Financial statements are essential in retail financial management, providing insights into a company’s financial health. Key financial reports include the Profit & Loss (P&L) statement, which tracks revenue, costs, and net profit over a specific period. These statements help retailers make informed decisions about budgeting, inventory planning, pricing strategies, and overall financial performance.
Fixture
Fixtures in retail stores are used to display products effectively. They come in various shapes and sizes, including shelves, racks, and mannequins, and play a crucial role in visual merchandising. Well-designed fixtures enhance the store’s appearance, make products more visually appealing, and guide customers through the layout, ultimately boosting sales.
Floor Plan
A floor plan is a bird’ s-eye diagram of a retail space that illustrates the design and layout of the property. It includes structural details like walls, windows, doors, and fixtures. A practical floor plan helps visualize customer flow, optimize space usage, and create a welcoming shopping environment, leading to increased sales and improved customer experience.
Footfall
Footfall refers to the number of people entering a retail store within a given period. It is a critical metric for assessing store performance, understanding customer behavior, and planning marketing strategies. High footfall indicates strong customer interest and can lead to increased sales opportunities.
Forecasting
Forecasting in retail involves predicting future sales, inventory needs, and market trends based on historical data and market analysis. Accurate forecasting helps retailers manage stock levels, plan promotions, and make informed business decisions to meet customer demand and maximize profitability.
Forward Integration
Forward integration is a business strategy where a company expands its operations to include control over its distribution channels. For example, a manufacturer might open its retail stores to sell products directly to consumers, thereby increasing control over the supply chain and improving profit margins.
Forward Stock Cover
Forward stock cover refers to the retailer’s inventory to meet future demand. It is calculated based on sales forecasts and helps ensure enough stock to satisfy customer needs without overstocking, which can tie up capital and increase storage costs.
Franchise
A franchise is a business model where a franchisor grants a franchisee the right to operate a business using the franchisor’s brand, products, and operational methods. This arrangement allows the franchisee to benefit from an established brand and business system while the franchisor expands its market presence.
Franchisee
A franchisee is an individual or entity that purchases the rights to operate a franchise business. The franchisee pays fees and royalties to the franchisor in exchange for using the brand name, receiving training, and accessing the franchisor’s business systems and support.
Franchisor
A franchisor is a company that owns the overall rights and trademarks of the business and grants licenses to franchisees to operate under its brand. The franchisor provides franchisees support, training, and resources to ensure consistency and success across all franchise locations.
Free Cash Flow
Free cash flow is the cash a business generates after accounting for capital expenditures. It is an essential indicator of a company’s financial health and ability to generate money to fund operations, pay dividends, reduce debt, or invest in growth opportunities.
Freight Cost
Freight cost refers to the expenses incurred in transporting goods from one location to another. In retail, managing freight costs is crucial for maintaining profitability, especially when dealing with international shipping and logistics.
Fulfillment Center
A fulfillment center is a warehouse facility where products are stored, processed, and shipped to customers. Efficient fulfillment centers are essential for timely order processing, inventory management, and customer satisfaction in retail operations.
Fulfillment Optimization
Fulfillment optimization involves improving the efficiency and effectiveness of order processing, inventory management, and shipping operations. Retailers can reduce costs, speed up delivery times, and enhance customer satisfaction by optimizing fulfillment processes.
Full Price Strategy
A full-price strategy is a pricing approach where products are sold at regular prices without discounts or markdowns. Luxury brands often use this strategy to maintain an image of exclusivity and high value. It relies on strong brand equity and customer loyalty.
FIFO (First In, First Out)
FIFO, or First In, First Out, is an inventory management method where the oldest stock (first in) is sold first (first out). This approach helps prevent inventory obsolescence, ensures product freshness, and aligns with accounting practices for cost of goods sold.
Grocery Store
A grocery store, commonly called a supermarket in the United States, is a retail establishment that sells food and household supplies. These stores provide a wide range of products, including fresh produce, dairy, meat, packaged foods, and various household items, allowing customers to purchase all their daily necessities in one place.
Gross Sales
Gross sales represent the total value of all sales transactions made by a business over a specific period without accounting for any deductions such as returns, allowances, or discounts. This metric is crucial for assessing a company’s ability to generate income and is often used in the retail industry to gauge overall sales performance.
Gross Profit
Gross profit is calculated by subtracting the cost of goods sold (COGS) from total revenue. It indicates a business’s financial health by showing how much money remains after covering the direct costs associated with producing goods. The formula for gross profit is Gross Profit = Revenue—COGS.
Gross Merchandise Value (GMV)
Gross Merchandise Value measures the total value of goods sold through an e-commerce platform or marketplace over a specified period. GMV is calculated before deducting any fees, expenses, or returns, making it a useful metric for assessing an online business’s growth and sales volume.
Gift Card
Gift cards are prepaid cards issued by retailers that can be used as an alternative to cash for purchases. They provide immediate income for the retailer at the time of sale and encourage customer loyalty by driving traffic to the store. Gift cards can be physical or digital and are often used to boost sales and reduce fraud.
Gondola
In retail, a gondola is a freestanding fixture used to display merchandise. Typically consisting of a flat base and a vertical component with shelves or hooks, gondolas maximize retail space and enhance product visibility. They are commonly found in supermarkets and other retail environments to create aisles and organize products efficiently.
Goodwill
Goodwill is an intangible asset that arises when one company acquires another for a price higher than the fair market value of its net identifiable assets. It reflects the value of a business’s brand, customer relationships, and employee expertise. Goodwill is calculated by subtracting the fair market value of net identifiable assets from the purchase price of the acquired business.
Greenwashing
Greenwashing refers to the practice of companies misleading consumers about the environmental benefits of a product or service. This deceptive marketing tactic aims to portray a company as more environmentally friendly than it is, often to capitalize on the growing demand for sustainable products.
Handheld Scanner
A handheld scanner is a portable electronic device that scans physical documents and converts them into digital formats. These scanners are essential for retail, logistics, and industry inventory management, pricing, and checkouts. They consist of reading and decoding units, often integrated into one device, allowing for quick and accurate data collection.
Handheld Terminal
Handheld terminals are wireless devices with an operating system (Android/Windows), memory, screen, keyboard, and barcode scanning capabilities. Commonly used in container terminals and retail, they facilitate data transfer and extended operational periods due to their built-in batteries. These devices are crucial for real-time data collection and management.
Hardlines
In retail, “hardlines” refer to durable, non-consumable goods characterized by their longer lifespans and tangible nature. Examples include appliances, automotive parts, sporting goods, electronics, and toys. These items are typically hard to the touch and are distinguished from soft goods like clothing and linens.
Hanger Appeal
Hanger appeal refers to the attractiveness of a garment when displayed on a hanger, making it appealing enough for immediate purchase without trying it on. This concept is crucial in retail as it can significantly impact sales by enticing customers through visual appeal alone.
Headstock
The headstock is a component found at the end of stringed musical instruments, such as guitars and violins. It houses the tuning pegs or mechanisms that hold the strings in place. In lathes, the headstock holds and rotates the workpiece, containing the main spindle, gears, and often the motor that drives the spindle.
High Street
High Street is a term commonly used in the UK and Commonwealth countries to denote the primary business street in a town or city where the most important shops and businesses are located. It is the focal point for retail and commercial activities and is often synonymous with the retail sector itself.
High-Low Merchandising Strategy
The high-low merchandising strategy involves setting product prices above the market average initially and then offering significant discounts or clearance sales later. This approach helps turn slow-moving inventory and increase store traffic by attracting customers with promotional offers.
High/Low Pricing
High/low pricing is a strategy in which products are introduced at a high price point and later sold at a lower price during promotions or clearance sales. This method helps sell slow-moving merchandise, increase store traffic, and generate additional sales on other items.
High-Ticket Item
High-ticket items are premium, high-cost products or services, such as luxury cars, jewelry, or expensive technological equipment. These items usually require a consultative sales approach due to their high price points, which generally start around $1,000. Selling high-ticket items can significantly boost revenue and profit margins, although it often involves longer sales cycles and more objections.
Hidden Price Increase
A hidden price increase refers to raising prices in a way that is not immediately obvious to consumers. This can include adding hidden charges or fees, such as bank overdraft fees, surcharges from telecommunication providers, processing fees, and installation fees.
Holiday Markdowns
Holiday markdowns are price reductions implemented for seasonal items if they do not sell out by a predetermined time. These markdowns help clear out inventory to make room for new merchandise and are often used to boost sales during holiday seasons.
Holding Power
In retail, holding power signifies a product’s or brand’s capacity to consistently attract and retain consumer interest, ensuring longevity and relevance in the market. It gauges a product’s ability to maintain sales and a brand’s enduring appeal and loyalty.
Holdout Test
A holdout test is a type of A/B testing where a portion of the audience is purposely excluded from receiving a marketing message. This control group helps determine the campaign’s effectiveness by comparing their behavior to those who received the message.
Host Merchant
A host merchant is a payment processing company that provides merchants credit card and electronic payment processing services. It offers various services, including payment processing, POS systems, and business cash advances.
Hotspot Analysis
Hotspot analysis is a spatial analysis technique used to identify statistically significant clusters of high values (hot spots) and low values (cold spots) within a dataset. This method is often used in mapping and geographic information systems (GIS) to analyze spatial phenomena.
Hybrid Retailing
Hybrid retailing combines traditional physical retailing with eCommerce, offering consumers a seamless shopping experience across multiple channels. This model allows customers to shop online and pick up in-store, or vice versa, providing greater convenience and flexibility.
Hybrid Store
A hybrid store is a retail concept that merges online and offline shopping experiences. It serves as a product showroom, distribution hub, customer service center, and entertainment venue, aiming to provide a comprehensive and engaging shopping experience.
Home Delivery
Home delivery is a service where purchased goods are delivered directly to the customer’s home. This option has become increasingly popular, especially during the pandemic, as it offers convenience for customers who prefer not to visit physical stores.
Horizontal Integration
Horizontal integration involves a business’s acquisition, merger, or expansion to increase its market share within its existing industry. This strategy helps companies grow by consolidating competitors and expanding their reach in the market.
Hurdle Rate
The hurdle rate is the minimum rate of return on an investment that a manager or investor expects to achieve. It is used to evaluate the profitability of potential investments and ensure that they meet the required threshold for financial viability.
An independent retailer is a business owned and operated by an individual or a small group, separate from large franchise chains and corporate structures. These retailers have autonomy in their operations and can cater uniquely to their local communities.
Inbound Logistics
Inbound logistics involves the processes related to receiving and storing incoming goods from suppliers to the warehouse. This includes transportation, storage, and handling of raw materials and inventory, ensuring timely and efficient flow into the business.
Incentive Program
An incentive program is a strategic initiative designed to motivate employees, customers, or partners to achieve predefined goals. Common incentives include bonuses, discounts, loyalty points, and other rewards to drive performance and engagement.
Intake Margin
The intake margin reflects the difference between the cost price and the initial selling price of merchandise. It is a key profitability metric that helps retailers manage pricing strategies and assess potential profit margins from stock acquisition.
Incidental Expenses
Incidental expenses refer to minor and miscellaneous out-of-pocket costs that arise during business operations. These can include things like travel-related costs (tips, refreshments) and office supplies not covered under major expense categories.
Initial Markup
Initial markup is the percentage difference between the cost of a product and its initial retail price before any discounts. This figure is critical for determining pricing strategies and projected profitability on goods sold.
In-Season Merchandise
In-season merchandise refers to products that are currently in demand due to seasonal factors or trends. Retailers focus on stocking and promoting these items to take advantage of peak buying periods, maximizing sales potential.
In-Stock Position
The in-stock position indicates the availability of products in a retailer’s inventory at any given time. Maintaining a strong in-stock position ensures that high-demand items are readily available for purchase, minimizing lost sales opportunities.
In-Store Experience
In-store experience encompasses all aspects of a customer’s interaction within a retail store. This includes store layout, ambiance, customer service, and engaging displays, all geared towards enhancing customer satisfaction and encouraging purchases.
In-Store Pickup
In-store pickup, also known as click-and-collect, allows customers to order products online and retrieve them from a physical store location. This service merges the convenience of online shopping with the immediacy of in-store purchase.
In-Store Promotion
In-store promotions are marketing tactics executed within a retail environment to boost sales and enhance brand visibility. Examples include discounts, special displays, samples, and events that attract customer interest and drive foot traffic.
Impulse Buying
Impulse buying is an unplanned or spontaneous purchase made by consumers when they see a product that triggers a sudden desire to buy. Retailers often capitalize on this behavior by placing attractive or essential items near checkout areas.
Inventory Management
Inventory management involves supervising stock levels, orders, sales, and deliveries to ensure an adequate supply of products without overstocking or understocking. Effective inventory management helps optimize storage costs and improve profitability.
Inventory Turnover
Inventory turnover is a ratio that measures how many times a company’s inventory is sold and replaced over a certain period. Higher inventory turnover indicates efficient selling and replenishing practices, suggesting healthy business operations.
Inventory Audit
An inventory audit is the process of verifying the accuracy and condition of a company’s inventory records. Regular audits help identify discrepancies, manage shrinkage, and ensure proper accounting of stock levels.
Invoice
An invoice is a commercial document issued by a seller to a buyer detailing the goods or services provided, their quantities, and agreed prices. It serves as a request for payment and a vital record for both parties’ financial transactions.
Itemized Receipt
An itemized receipt lists each item purchased, including detailed descriptions, quantities, prices, and taxes applied. It provides clear documentation and transparency for customers to verify and track their purchases.
Joint Promotion
Joint promotion involves two or more businesses collaborating on a marketing campaign to boost sales and brand awareness. These partnerships allow companies to share costs, resources, and customer bases, thereby increasing the reach and effectiveness of their promotional efforts.
Just-In-Time Inventory (JIT)
Just-in-time inventory is a management strategy in which goods are received only as they are needed in the production process or for immediate sale. This approach minimizes inventory holding costs and reduces excess stock, improving efficiency and reducing waste.
Jobber
A jobber is an intermediary that buys bulk products from manufacturers or wholesalers and sells them to retailers in smaller quantities. Jobbers often serve niche markets or specific retail sectors, providing smaller stores with more flexibility and access to diverse products.
Jewelry Store
A jewelry store sells various jewelry items such as rings, necklaces, bracelets, earrings, and watches. These stores may offer items made from precious metals and gemstones, provide custom design services, and conduct appraisals and repairs.
Jumbo Display
A jumbo display refers to a large, prominent screen or digital signage used in retail to attract attention and engage customers. These displays are typically used for advertising, showcasing promotions, or enhancing the shopping experience through interactive features.
J-Curve Effect
The J-curve effect describes a phenomenon where costs initially increase before decreasing. In the retail context, this can occur when implementing new technologies or business processes. Initially, there is an investment phase, but over time efficiencies are realized, leading to lower operational costs.
Key Performance Indicator (KPI)
KPIs are measurable values used by businesses to gauge the effectiveness of various operational, sales, and marketing strategies. In retail, KPIs can include sales revenue, customer retention rates, and inventory turnover.
Kiosk
A kiosk is a small, standalone booth or structure typically found in shopping malls, airports, or other high-traffic areas. It sells a variety of products or services and is designed to be compact and visually appealing.
Knock-Off
A knock-off is an imitation product that mimics the design and appearance of a brand-name item but is sold at a lower price. Knock-offs are often made with cheaper materials and can infringe on intellectual property rights.
Kitting
Kitting involves assembling individual items into combined units or kits ready for sale. This process increases efficiency in order fulfillment and offers customers the convenience of purchasing pre-packaged groups of related products.
Keystoning
Keystoning is a pricing strategy in which retailers set the retail price of an item at twice the wholesale cost. This traditional method simplifies pricing decisions and typically ensures a sufficient profit margin.
Knowledge Management
Knowledge management in retail involves collecting, storing, and sharing product information and organizational insights to enhance operational efficiency and customer service. Effective knowledge management helps staff access accurate information quickly.
Kinetic Displays
Kinetic displays integrate movement or motion elements to capture customer attention. These dynamic visual merchandising tools create engaging shopping environments and highlight promotions or featured products.
Keyword
Keywords are specific terms or phrases used in search engine optimization (SEO) and digital marketing to attract relevant web traffic. Effective keyword usage improves a website’s visibility on search engines.
Keyword Research
Keyword research identifies popular and relevant search terms that consumers use when looking for products or services. This practice informs content creation and SEO strategies to increase organic traffic.
Keyword Stuffing
Keyword stuffing refers to the overuse of keywords on a webpage to manipulate search engine rankings. This outdated and frowned-upon practice can lead to penalties from search engines like Google.
Klarna
Klarna is a fintech company offering online payment solutions and financing services. Klarna allows e-commerce customers to split their purchases into installments, pay later, or finance larger orders, providing flexible payment options.
KPI Dashboard
A KPI dashboard is a visual tool that displays key performance indicators in an easy-to-understand format. It helps business managers monitor critical metrics in real-time and make informed decisions to improve performance.
LFL (Like-For-Like)
Like-for-Like (LFL) is a measure used in retail to compare the sales growth of existing stores over a certain period. This metric adjusts for new store openings or closures, providing a clearer picture of a retailer’s performance by focusing on stores that have been operational for at least a year.
Look Book
A Look Book is a collection of photographs compiled to showcase a designer’s new collection. It serves as a visual marketing tool to present the latest trends and styles to buyers, media, and customers, often used in the fashion industry.
Loss Leader
A Loss Leader is a product sold at a loss to attract customers into a store. The strategy aims to entice shoppers with the discounted item, hoping they will make additional purchases of higher-margin products. Common examples include low-priced milk in grocery stores or discounted electronics during holiday sales.
Loss Prevention
Loss Prevention refers to strategies and practices aimed at reducing theft, fraud, and operational errors in retail stores. Effective loss prevention not only protects a retailer’s bottom line but also ensures a safe shopping environment for customers and employees. Techniques include surveillance systems, staff training, and inventory management.
Luxury Brand
A Luxury Brand is a high-end brand known for its premium quality, exclusivity, and high price points. These brands often emphasize craftsmanship, heritage, and superior materials, catering to affluent consumers seeking status and prestige.
A Luxury Buyer is a consumer who regularly purchases high-end, premium products. These individuals prioritize quality, exclusivity, and brand reputation, often willing to pay a premium for items that reflect their social status and personal taste.
A Luxury Conglomerate is a large corporation that owns multiple luxury brands across various sectors, such as fashion, jewelry, and cosmetics. Examples include LVMH and Kering, which manage portfolios of prestigious brands like Louis Vuitton, Gucci, and Dior.
Luxury Retail refers to the sale of high-end, premium products through exclusive retail channels. These stores offer a personalized shopping experience, often located in upscale areas and designed to provide an ambiance of sophistication and exclusivity.
Lifestyle
In retail, Lifestyle refers to products and services that cater to a specific way of living or set of values. Brands focusing on lifestyle aim to create a holistic customer experience, encompassing fashion, home decor, wellness, and more, aligning with their target audience’s aspirations and preferences.
Loyalty Program
A Loyalty Program is a marketing strategy designed to encourage repeat purchases by offering rewards or incentives to loyal customers. These programs can include points systems, discounts, exclusive offers, and tiered memberships, all of which aim to increase customer retention and boost sales.
Long Tail
The Long Tail is a retail strategy focusing on selling a large number of unique niche products in small quantities rather than a few popular products in large quantities. This approach leverages the vast reach of online platforms to cater to diverse customer preferences, maximizing overall sales by tapping into less common demands.
Layaway
Layaway is a purchasing option allowing customers to reserve an item with a deposit and pay the balance over time before taking possession. This method helps consumers manage their budgets while ensuring they can secure desired products without immediate full payment.
Lease Agreement
A Lease Agreement is a contractual agreement between a landlord and a tenant outlining the terms and conditions of renting a retail space. It includes details such as rent amount, lease duration, maintenance responsibilities, and other obligations of both parties.
Limited Edition
A Limited Edition product is produced in limited quantities, often with unique features or designs, to create exclusivity and urgency among customers. This strategy can drive demand and enhance the product’s perceived value, appealing to collectors and enthusiasts.
Line Sheet
A Line Sheet is a document retailers use to communicate product information, including descriptions, prices, and ordering details, to potential buyers. It is a comprehensive guide for wholesale transactions, helping buyers make informed purchasing decisions.
Loss Ratio
Loss Ratio is a financial metric used to assess the proportion of lost sales or damaged goods compared to total sales. This ratio helps retailers understand the impact of losses on their profitability and identify areas for improvement in inventory management and loss prevention strategies.
Manufacturer
A manufacturer is an entity that produces goods or products from raw materials using labor, machinery, and tools. They supply these finished products to wholesalers, retailers, or directly to consumers, often under their brand or as a third-party supplier.
Margin
Margin refers to the difference between the cost of producing a product and its selling price, usually expressed as a percentage. It indicates profitability, showing how much profit a retailer makes after deducting production costs from the revenue generated by sales.
Market Analysis
Market analysis is the process of studying the characteristics of a market within a specific industry. This includes understanding market size, demand, competition, and consumer behavior. The insights gathered help businesses make informed decisions about entering or expanding within the market.
Market Research
Market research involves collecting and analyzing data about consumers, competitors, and market trends. It helps businesses understand customer needs, preferences, and behaviors, enabling them to develop effective marketing strategies and improve product offerings.
Market Segmentation
Market segmentation divides a broad target market into smaller, more manageable subgroups based on shared characteristics such as demographics, psychographics, behavior, or geographic location. This strategy allows for more personalized and effective marketing efforts.
Markup
Markup is the amount added to the cost price of goods to cover overhead and profit before a product is sold to customers. It is typically expressed as a percentage of the cost price and helps determine an item’s selling price.
Markdown
Markdown refers to the reduction in the selling price of merchandise, usually to clear out unsold stock, attract customers, or respond to competitive pricing. Markdowns help manage inventory levels and stimulate sales during off-peak or holiday seasons.
Mass Market Retailer
A mass-market retailer caters to a large segment of consumers by offering a wide range of products at affordable prices. These retailers operate at a high volume with low profit margins to maximize reach and sales. Examples include Walmart and Target.
Merchandise
Merchandise refers to the goods that retailers offer for sale to consumers. This can include any product category ranging from apparel and electronics to groceries and home goods. Effective merchandising involves selecting and displaying products in ways that attract and retain customer interest.
Merchandise Hierarchy
Merchandise hierarchy is an organized structure retailers use to categorize and manage their product assortment. It typically consists of multiple levels, such as departments, categories, classes, and subclasses, allowing for efficient inventory management and data analysis.
Merchandising
Merchandising encompasses all the activities involved in promoting and selling products to customers. This includes product selection, display techniques, pricing strategies, and promotional efforts designed to enhance the shopping experience and boost sales.
Minimum Order Quantity (MOQ)
MOQ is the smallest quantity of a product that a manufacturer or supplier is willing to sell or produce in a single order. It helps ensure that production runs are cost-effective and inventory levels are maintained efficiently.
Manufacturer’s Suggested Retail Price (MSRP)
MSRP is the price point a manufacturer recommends for retailers to use when selling a product to consumers. It’s intended to provide consistency across different retail outlets and reflect the product’s perceived value in the market.
Multi-Channel Retailing
Multi-channel retailing involves using multiple platforms or channels (such as physical stores, online shops, mobile apps, and social media) to sell products and engage with customers. This approach provides consumers various options for purchasing and interacting with the brand, enhancing customer satisfaction and loyalty.
Narrow Aisle Layout
A narrow aisle layout refers to a store design with reduced aisle widths, allowing for more shelf space and increased product variety. This layout maximizes the utilization of available floor space, enabling retailers to stock a broader range of items. Though it may limit customer movement, it is ideal for compact stores seeking higher product density.
National Brand
A national brand is a product line that is marketed and sold nationwide under a well-known and established brand name. These products are often produced by large manufacturers and are widely recognized and trusted by consumers. Examples include brands like Coca-Cola, Nike, and Apple.
Net Sales
Net sales represent a company’s total revenue from goods sold or services provided, minus returns, allowances, and discounts. This figure provides an accurate measure of a retailer’s actual earnings from sales activities, reflecting its ability to generate revenue after accounting for any reductions.
Non-Refundable Deposit
A non-refundable deposit is an advance payment made by a buyer to a seller that cannot be reclaimed if the buyer chooses not to proceed with the purchase. This deposit secures the transaction and compensates the seller for any potential loss or inconvenience due to the buyer backing out.
Non-Store Retailing
Non-store retailing involves selling goods and services outside of traditional brick-and-mortar stores. This includes channels such as eCommerce websites, TV shopping networks, catalog sales, direct mail, and vending machines. It provides convenience and accessibility for customers preferring to shop remotely.
Niche Market
A niche market is a small, defined segment of the market catering to a specific group of customers with particular needs or preferences. Businesses targeting niche markets offer specialized products or services that are not widely available, allowing them to serve unique customer demands effectively.
Novelties
Novelties are unique, innovative, or whimsical items designed to grab attention due to their originality or amusing nature. These products are typically trend-driven, often serving as impulse buys or gifts, and can range from gadgets and toys to custom collectibles and themed merchandise.
Near Field Communication (NFC)
Near Field Communication is a wireless technology that enables short-range communication between compatible devices, usually within a few centimeters. In retail, NFC is commonly used for contactless payment systems, allowing customers to pay by simply tapping their NFC-enabled smartphones or cards on a reader.
Negotiated Pricing
Negotiated pricing refers to a pricing strategy where the final price of a product or service is agreed upon through negotiation between the buyer and the seller. This approach is often used in B2B transactions, large purchases, and industries where pricing flexibility is common.
New Product Introduction (NPI)
New Product Introduction (NPI) is the process of bringing a new product to market, covering all stages from initial concept and design to production and market launch. This process involves extensive research, development, and testing to ensure the product meets target market needs and achieves commercial success.
NOOS (Never Out of Stock)
NOOS, or Never Out of Stock, is a retail strategy aimed at maintaining constant availability of essential and high-demand products. Implementing NOOS ensures that popular items are always in stock, preventing missed sales opportunities and enhancing customer satisfaction by consistently meeting their purchasing needs.
Off-price retailers sell branded or designer merchandise at lower prices than in traditional retail stores. They acquire excess inventory, returns, or off-season goods from manufacturers and retailers. Examples include T.J. Maxx and Ross Stores.
Online Merchandising
Online merchandising involves presenting products effectively on e-commerce websites to attract, engage, and convert visitors into customers. It includes strategic use of product descriptions, images, categorization, search functionality, and promotional banners.
Online Retail
Online retail refers to businesses that sell goods and services over the Internet. These retailers operate through e-commerce platforms, allowing consumers to browse and purchase products via websites or mobile apps, generally 24/7.
Omnichannel retailing integrates various shopping channels—such as physical stores, online stores, mobile apps, and social media—into a seamless customer experience. The goal is to provide a consistent and unified journey regardless of how or where a customer interacts with a brand.
Operating Expenses
Operating expenses are the costs required to run a retail business daily. These expenses include rent, utilities, payroll, marketing, and depreciation, excluding the cost of goods sold (COGS).
Open to Buy
Open to buy (OTB) is a financial budgeting tool retailers use to manage inventory purchasing. OTB indicates how much of the budget is available for new inventory purchases within a given period, helping to control stock levels and minimize overstock situations.
An open-air shopping center is a type of retail complex comprising multiple connected but separate retail stores with walkways exposed to the outdoors. Examples include strip malls and lifestyle centers, offering a variety of shops, restaurants, and entertainment venues.
Order Lead Time
Order lead time is the duration between when a retailer or customer places an order and when it is received. Short lead times are advantageous as they contribute to better inventory management and quicker customer fulfillment.
Out-of-Stock
Out-of-stock (OOS) refers to items unavailable for sale due to inventory depletion. OOS situations can lead to lost sales and unsatisfied customers, making it crucial for retailers to manage stock levels effectively.
Overhead Costs
Overhead costs are operational expenses not directly tied to specific products or services but are necessary for running the business. These include rent, utilities, insurance, and administrative salaries.
Overstock
Overstock occurs when more inventory is available than is needed to meet customer demand. It can lead to increased holding costs and require markdowns or special promotions to clear excess goods from storage.
P&L Management
Profit and Loss (P&L) management involves overseeing a company’s revenues, costs, and expenses to maximize profits and minimize losses. It includes tracking income and expenditures to ensure financial health and operational efficiency.
Payment Terms
Payment terms are the conditions under which a seller will complete a sale. They specify when payment is due and any discounts available for early payment. Common terms include Net 30, where payment is due within 30 days of the invoice date.
Penetration Pricing
Penetration pricing is a strategy where a new product is introduced at a low price to attract customers and gain market share quickly. This approach aims to lure customers away from competitors and establish a foothold in the market.
Physical Inventory Count
A physical inventory count involves manually counting all products in a store or warehouse to verify stock levels against records in the inventory management system. This process helps identify discrepancies, reduce stockouts, and ensure accurate inventory data.
Planogram
A planogram is a visual diagram or model that details the placement of products on shelves or displays in a retail store. It helps optimize space, improve product visibility, and enhance the shopping experience by guiding how merchandise should be arranged.
Pop-Up Shop
A pop-up shop is a temporary retail space that opens for a short period to sell products or promote a brand. These shops create a sense of urgency and exclusivity, often used for seasonal sales, product launches, or market testing.
Premium Brand
A premium brand offers high-quality products at higher prices, targeting consumers willing to pay more for superior quality, exclusivity, and status. These brands emphasize craftsmanship, innovation, and exceptional customer service.
Prestige Pricing
Prestige pricing, or premium pricing, sets prices higher than average to create an image of exclusivity and luxury. This strategy targets consumers who associate higher prices with superior quality and status.
Price Lining
Price lining involves offering products at several specific price points within a product line. This strategy simplifies consumer choices and encourages upselling by providing options at different price levels.
Price Skimming
Price skimming sets a high initial price for a new product to maximize profits from early adopters before gradually lowering prices to attract more price-sensitive customers. This approach helps recoup development costs quickly.
Pricing Power
Pricing power refers to a company’s ability to raise prices without significantly reducing product demand. Companies with solid pricing power often have unique products, strong brand loyalty, or limited competition.
Private label products are manufactured by one company but sold under another company’s brand. Retailers use private labels to offer exclusive products, control quality, and increase profit margins by bypassing third-party brands.
Psychographics
Psychographics involves analyzing consumers’ lifestyles, interests, attitudes, and values to understand their purchasing behavior. This information helps retailers tailor marketing strategies and product offerings to specific consumer segments.
Product Assortment
Product assortment refers to the variety of products a retailer offers. It includes the range of product lines and the depth of each line, helping retailers meet diverse customer needs and preferences.
Product Mix
The product mix is a retailer’s total range of products, including all product lines and individual items. A well-managed product mix can attract a broad customer base and drive sales across multiple categories.
Purchase order lead time is between placing an order with a supplier and receiving the goods. Efficient management of lead times ensures timely stock replenishment and reduces the risk of stockouts.
Point-of-Sale (POS) System
A POS system is the hardware and software used to complete sales transactions in a retail environment. It tracks sales, manages inventory, processes payments, and provides valuable data for business analysis.
Perishables
Perishables are products with a limited shelf life, such as food, flowers, and pharmaceuticals. Effective management of perishables involves careful inventory control, proper storage, and timely sales to minimize waste.
Pickup In Store (PIS)
Pickup In Store (PIS) allows customers to order products online and collect them from a physical store. This service combines the convenience of online shopping with the immediacy of in-store pickup.
Personal Shopper
A personal shopper assists customers in selecting and purchasing products, offering personalized recommendations based on individual preferences and needs. This service enhances the shopping experience and builds customer loyalty.
Peak Season
Peak season refers to periods of high demand, often driven by holidays, events, or seasonal trends. Retailers prepare for peak seasons by increasing inventory, staffing, and marketing efforts to capitalize on increased sales opportunities.
Price Elasticity of Demand (PED)
Price elasticity of demand measures how sensitive consumer demand is to changes in price. Products with high elasticity see significant demand changes with price fluctuations, while inelastic products see little change.
Promotion
Promotion encompasses various marketing activities to increase product awareness, generate interest, and drive sales. Common promotional tactics include discounts, advertising, special events, and loyalty programs.
Perceived Value
Perceived value is the customer’s evaluation of a product’s worth based on its benefits, quality, and price compared to alternatives. Retailers enhance perceived value through branding, packaging, and customer service.
Quarter To Date (QTD)
QTD refers to the financial performance metrics or data accumulated from the beginning of the current fiscal quarter up to the present date. It helps businesses track progress and compare performance within the ongoing quarter.
Queue Management System
A queue management system is a technology used to manage and streamline customer flow in retail environments. It helps reduce wait times, organizes service processes, and enhances the overall customer experience by efficiently handling queues.
Quality Control
Quality control is the process of ensuring that products meet specified standards and requirements. In retail, it involves inspecting goods for defects, verifying compliance with quality criteria, and addressing any issues to maintain product standards.
Quick Response (QR) Code
QR codes are matrix barcodes that store information and can be scanned using smartphones. In retail, they are used for accessing product information, promotional content, and facilitating payments, providing a seamless and interactive shopping experience.
Quantity Discount
A quantity discount is a price reduction offered to customers based on the volume of products purchased. This incentive encourages larger purchases, benefiting both retailers through increased sales and customers through cost savings.
Quiet Period
The quiet period is a stretch of time, often preceding the release of financial reports, during which a company avoids making new public statements or announcements. This practice aims to prevent influencing stock prices and ensuring compliance with regulatory requirements.
Quantity On Hand (QOH)
Quantity on hand refers to the amount of inventory currently available for sale at a specific time. Keeping accurate QOH records is crucial for inventory management, preventing stockouts, and optimizing replenishment cycles.
Ready-To-Wear
Ready-to-wear, often abbreviated as RTW, refers to clothing that is manufactured in standard sizes and sold in finished condition. Unlike bespoke or made-to-measure garments, ready-to-wear items are produced in bulk and available for immediate purchase.
Replenishment
Replenishment is the process of restocking products to maintain inventory levels and meet ongoing customer demand. Effective replenishment strategies ensure that popular items remain available, reducing the risk of stockouts and lost sales.
Reporting Period
A reporting period is the specific time frame for which financial and operational performance is measured and reported. Common reporting periods include monthly, quarterly, and annually, allowing businesses to analyze trends and make informed decisions.
Retail
Retail refers to the sale of goods or services directly to consumers for personal use. It includes a variety of formats such as brick-and-mortar stores, online shops, and pop-up locations. The retail industry encompasses a wide range of products, from clothing to electronics.
Retail Arbitrage
Retail arbitrage involves purchasing products at a low price from one retailer to resell them at a higher price through another channel, such as an online marketplace. This business model takes advantage of price discrepancies to generate profit.
Retail Business
A retail business is an enterprise primarily engaged in selling goods or services to end consumers. Retail businesses can range from small, independent shops to large chains and eCommerce platforms, focusing on delivering value and convenience to customers.
Retail Buying
Retail buying is the process of selecting and purchasing products to be sold in retail stores. Buyers analyze market trends, customer preferences, and sales data to choose products that will attract customers and drive sales.
Retailer
A retailer is a business entity that sells goods or services directly to the end consumer. Retailers can operate in various formats including physical stores, online websites, and catalogues, serving as the final point of sale in the supply chain.
Retail Management
Retail management involves overseeing the daily operations of retail businesses. It includes tasks such as staff management, inventory control, sales strategy, and customer service to ensure the store runs efficiently and profitably.
Retail math encompasses calculations used by retailers to manage inventory, pricing, sales, and profits. Key metrics include markup, margin, turnover rate, and sales per square foot, all crucial for making informed business decisions.
Retail media networks
Retail media networks are advertising platforms operated by retail companies, enabling brands to target customers via the retailer’s own channels, such as websites or in-store displays. These networks offer a direct way to reach active shoppers.
Retail Operations
Retail operations encompass all activities involved in running a retail business, including inventory management, staffing, store layout, and customer service. Efficient operations are vital for ensuring a smooth shopping experience and maximizing sales.
Retail Price
The retail price is the final selling price of a product to the consumer, typically marked up from wholesale cost to cover operating expenses and generate profit. Pricing strategies can vary based on competition, costs, and market demand.
Retail Sales
Retail sales refer to the revenue generated from selling goods or services to consumers. This metric is key in assessing a store’s performance and popularity, often influenced by factors like location, product mix, and marketing efforts.
Retail Sales Associate
A retail sales associate is an employee who interacts with customers, assists with product selection, and completes sales transactions. They play a crucial role in providing excellent customer service and driving sales within the store.
Retail Store
A retail store is a physical location where goods and services are sold directly to consumers. Stores can range from small boutiques to large department stores, offering a variety of products in a face-to-face shopping environment.
Retail shrinkage is the loss of inventory attributed to theft, fraud, damage, or administrative errors. Shrinkage reduces profitability and is typically addressed through security measures, employee training, and inventory management systems.
Retail Supply Chain
The retail supply chain encompasses all the steps involved in getting products from manufacturers to consumers. This includes production, transportation, warehousing, distribution, and final sale at the retail level.
Retail Therapy
Retail therapy refers to the act of shopping to improve one’s mood or reduce stress. While it can provide temporary emotional relief, it’s also associated with impulsive purchasing and spending beyond one’s means.
Return Fraud
Return fraud occurs when individuals exploit a retailer’s return policy to gain refunds, exchanges, or store credits deceitfully. Examples include returning stolen items, using counterfeit receipts, or “wardrobing” (wearing items before returning them).
Reverse Logistics
Reverse logistics is the process of handling returns and exchanges, including refurbishing, recycling, or disposing of returned products. Effective reverse logistics are essential for maintaining customer satisfaction and managing inventory efficiently.
Sales Equation
The sales equation in retail is a formula used to calculate total sales by multiplying three key metrics: traffic, conversion rate, and Average Transaction Value (ATV). For example, if a store has 1,000 visitors, a conversion rate of 20%, and an ATV of $50, the sales would be calculated as 1,000 x 0.2 x $50 = $10,000.
Sales Mix
Sales mix refers to the proportion of different products sold relative to total sales. It helps businesses understand which products are more profitable and adjust their inventory and marketing strategies accordingly. For instance, if a store sells 70% electronics and 30% clothing, the sales mix can guide decisions on stock levels and promotional efforts.
Sales Per Square Foot (SPSF)
Sales per square foot is a metric that measures the revenue generated per square foot of retail space. It is calculated by dividing total sales by the selling area in square feet. This metric helps retailers assess the efficiency of their space utilization. For example, if a store generates $500,000 in sales and has 5,000 square feet of selling space, its SPSF is $100.
Sales Volume
Sales volume is the total number of units sold within a specific period. It helps businesses identify their best and worst-performing products. For example, if a company sells 1,000 units of Product A and 500 units of Product B in a month, the sales volume for each product can inform inventory and marketing strategies.
Same Store Sales
Same store sales measure the revenue growth of stores that have been open for at least one year, excluding new or closed locations. This metric helps assess the performance of existing stores without the influence of expansion. For example, if a retailer’s same store sales increase by 5%, it indicates growth in established locations.
Seasonality
Seasonality refers to fluctuations in sales due to seasonal factors such as holidays, weather changes, or cultural events. Retailers often adjust their inventory and marketing strategies to capitalize on these trends. For example, toy sales typically spike during the holiday season.
Sell through rate is the percentage of inventory sold over a specific period. It is calculated by dividing the number of units sold by the number of units received and multiplying by 100. For example, if a store receives 200 units of a product and sells 150, the sell through rate is 75%.
Shipping Terms
Shipping terms define the responsibilities and costs associated with the delivery of goods from seller to buyer. Common terms include FOB (Free on Board) and CIF (Cost, Insurance, and Freight). These terms determine who pays for shipping, insurance, and other logistics.
Showrooming
Showrooming occurs when customers visit a physical store to examine a product but make the purchase online, often at a lower price. Retailers combat showrooming by offering price matching and enhancing in-store experiences.
Shrinkage refers to the loss of inventory due to theft, damage, or administrative errors. It is calculated as the difference between recorded inventory and actual inventory. For example, if a store’s inventory records show 1,000 units but only 950 are physically present, the shrinkage is 50 units.
Shrinkflation
Shrinkflation is the practice of reducing the size or quantity of a product while maintaining the same price. This tactic is often used to offset rising production costs without increasing prices. For example, a cereal box may contain fewer ounces than before but still cost the same.
SKU (Stock Keeping Unit)
A SKU is a unique identifier for each product in a retailer’s inventory, used to track stock levels and sales. SKUs help manage inventory efficiently and ensure accurate record-keeping. For example, a red, size medium T-shirt might have a different SKU than a blue, size large T-shirt.
Size Curve
A size curve represents the distribution of sizes for a particular product based on historical sales data. It helps retailers order the right quantities of each size to meet customer demand. For example, if medium sizes sell more frequently, the size curve will reflect a higher proportion of medium sizes in future orders.
Size Run
A size run is a complete set of sizes for a particular product, typically used in fashion retail. It ensures that all available sizes are represented in inventory. For example, a size run for shoes might include sizes 6 through 12.
Sociographics
Sociographics refer to the social and cultural characteristics of a target market, including lifestyle, values, and interests. This information helps retailers tailor their marketing strategies to resonate with specific customer segments.
Social Commerce
Social commerce involves using social media platforms to facilitate online shopping. It includes features like shoppable posts, live streaming sales, and social media marketplaces. For example, Instagram allows users to purchase products directly through tagged posts.
Soft Goods Soft goods are retail products made from textiles, such as clothing, bedding, and towels. They contrast with hard goods, which include items like electronics and furniture.
A specialty store focuses on a specific product category or niche market, offering a deep assortment of products within that category. Examples include bookstores, toy stores, and athletic footwear shops.
Stocktake
A stocktake is the process of physically counting inventory to verify stock levels and identify discrepancies. It helps ensure accurate inventory records and can reveal issues like shrinkage or mismanagement.
Stock Obsolescence
Stock obsolescence occurs when inventory becomes outdated or unsellable due to changes in trends, technology, or consumer preferences. Retailers often discount obsolete stock to clear it from inventory.
Store Brand
A store brand, also known as a private label, is a product line owned and sold exclusively by a retailer. These products often offer higher margins and competitive pricing compared to national brands.
Store Layout
Store layout refers to the arrangement of fixtures, displays, and merchandise within a retail space. Effective layouts enhance customer experience, encourage browsing, and optimize sales. Common layouts include grid, loop, and free-flow designs.
Store Manager
A store manager oversees daily operations, including staff management, inventory control, and customer service. They ensure the store meets sales targets and maintains high standards of operation.
Store Owner A store owner is the individual or entity that owns and operates a retail business. They are responsible for strategic decisions, financial management, and overall business success.
Supply Chain The supply chain encompasses all activities involved in producing and delivering goods to consumers, from raw material sourcing to final sale. Efficient supply chain management reduces costs and improves product availability.
Storefront
A storefront is the exterior facade of a retail store, including signage, windows, and entrance. It plays a crucial role in attracting customers and creating a positive first impression.
Tenant
In retail, a tenant is a business or individual leasing space within a larger property, such as a mall or shopping center, to operate their store. Tenants are responsible for paying rent and may contribute to common area maintenance fees.
Tenant Allowance
Tenant allowance is a financial incentive landlords provide to attract tenants to lease space in a property. It often covers costs like renovations, fixtures, and other improvements needed to prepare the leased space for business operations.
Trend Forecasting
Trend forecasting in retail involves predicting future consumer behavior, styles, and purchase patterns. Retailers use various data and analytic tools to anticipate trends, allowing them to plan inventory, marketing strategies, and product development.
Turnover Rent
Turnover rent is a rental agreement where the tenant pays a base rent plus a percentage of their sales revenue. This arrangement aligns the landlord’s income with the tenant’s performance, benefiting both parties in successful retail locations.
Target Market
Target market refers to a specific group of consumers a business aims to reach with its products or services. Identifying a target market involves analyzing demographic, psychographic, and behavioral characteristics to tailor marketing efforts effectively.
Traffic Count
Traffic count measures the number of people entering a store or passing through a specific area within a retail environment. High traffic counts typically indicate greater potential for sales and customer engagement.
Trade Area
A trade area is the geographic region from which a retail store draws its customers. Understanding the trade area helps retailers identify optimal store locations and marketing strategies to attract local shoppers.
Transaction
A transaction in retail refers to the process of selling goods or services to a customer. It includes all activities related to completing the sale, such as payment processing, receipt issuance, and delivery if applicable.
Test Market
A test market is a select geographic area or customer segment used to trial new products or marketing campaigns before a full-scale rollout. This approach helps businesses gauge consumer reactions and make necessary adjustments.
Trade Show
Trade shows are industry events where businesses exhibit their products or services to potential buyers, partners, and the press. These gatherings facilitate networking, brand exposure, and direct feedback from attendees.
Units per Transaction (UPT)
Units per Transaction is a retail metric that measures the average number of items customers purchase in each transaction. It is calculated by dividing the total number of items sold by the total number of transactions. For example, if a store sold 4,144 items across 1,036 transactions, the UPT would be 4.
Unplanned Purchases
Unplanned purchases occur when consumers buy items spontaneously, often influenced by emotional triggers, social influence, or marketing tactics. These purchases are typically driven by in-store displays, advertisements, or salespeople’s recommendations.
Upselling
Upselling is a sales strategy where customers are encouraged to purchase a higher-end version of a product than they originally intended. This can involve suggesting additional features, better models, or complementary products to enhance the customer’s experience and increase sales.
Urban Store
Urban stores are retail outlets located in densely populated urban areas. These stores cater to the high foot traffic and diverse consumer needs found in city centers, often offering convenience and a wide range of products to meet the demands of urban dwellers.
Uniform Pricing
Uniform pricing involves setting the same price for a product across all locations or channels, regardless of market conditions. While this approach simplifies pricing strategies, it can reduce profits compared to flexible pricing tailored to specific markets.
Understock
Understocking refers to having insufficient inventory to meet customer demand. This can lead to lost sales, decreased customer satisfaction, and potential damage to a retailer’s reputation. Effective inventory management is crucial to avoid understocking.
Unit Cost
Unit cost is the expense associated with producing or purchasing one product unit. It includes variable and fixed costs and is essential for pricing strategies and profitability analysis. The formula for unit cost is: Cost per unit = (Variable cost + Fixed costs) / Total units produced.
Unboxing Experience
The unboxing experience is the process of opening and discovering a product’s packaging. A memorable unboxing experience can enhance customer satisfaction, reinforce brand identity, and encourage repeat purchases. Custom packaging, free samples, and engaging presentation are key elements.
Underperforming
In retail, underperforming refers to stores, products, or categories not meeting sales or performance expectations. Identifying and addressing underperforming areas is crucial for optimizing inventory, improving marketing strategies, and boosting overall profitability.
Utility Bill
Utility bills are recurring expenses for retail stores, covering essential services such as electricity, water, gas, and other utilities. Managing these costs effectively is essential for maintaining operational efficiency and controlling overhead expenses.
Unique Selling Proposition (USP)
A Unique Selling Proposition is a distinctive feature or characteristic of a product or brand that sets it apart from competitors. A strong USP helps attract and retain customers by clearly communicating the unique benefits and value offered.
User Experience (UX)
User Experience (UX) refers to a customer’s overall experience and satisfaction when interacting with a retail store, website, or app. Good UX design focuses on ease of use, accessibility, and creating a positive, engaging experience for users.
User Interface (UI)
User Interface (UI) encompasses the visual and interactive elements of a retail website or app that users interact with. Effective UI design ensures that these elements are intuitive, aesthetically pleasing, and facilitate a seamless user experience.
Value Chain
The value chain refers to the full range of activities required to bring a product from conception through the various phases of production, delivery to consumers, and final disposal after use. It includes all steps, including research and development, material sourcing, production, marketing, distribution, and customer service.
Vending Machine Business
This type of business involves placing vending machines in strategic locations. These machines directly dispense products such as snacks, drinks, and even electronics to consumers. Vending machine businesses focus on providing convenience and often operate 24/7.
Visual Merchandising
Visual merchandising is the practice of optimizing the presentation of products in retail settings to attract and engage customers. This includes arranging store layouts, window displays, product displays, lighting, and signage to enhance shopper experiences and drive sales.
Vendor
A vendor is a person or company that supplies goods or services to another business. Vendors can be wholesalers, manufacturers, or other entities that sell products in bulk or provide critical services to retailers and e-commerce platforms.
Virtual Store
A virtual store is an online version of a physical retail space where customers can browse and purchase products. Virtual stores utilize web technology to create immersive shopping experiences without needing a brick-and-mortar presence.
Velocity
In retail, velocity measures how quickly products are sold over a specific period. High-velocity items move off the shelves rapidly, indicating strong demand, while low-velocity items may require promotional efforts to boost sales.
Variance
Variance is the discrepancy between budgeted figures and actual outcomes. Retail and e-commerce help businesses identify underperforming areas and adjust strategies, inventory, or financial planning.
Volume Discount
A volume discount is a price reduction offered to buyers purchasing large quantities of a single product. Retailers and wholesalers use volume discounts to encourage bulk orders and increase sales.
Virtual Reality
Virtual reality (VR) in e-commerce allows customers to enter a simulated environment using VR headsets, providing them with interactive and immersive shopping experiences showcasing products in ways traditional online stores cannot.
Viral Marketing
Viral marketing leverages social networks and digital channels to spread a marketing message rapidly. Successful viral campaigns can dramatically increase brand visibility and awareness without significant expenditure.
View Through Rate
VTR is a key performance indicator in digital advertising that tracks the percentage of viewers who saw an ad and subsequently completed a desired action, such as making a purchase or signing up for a newsletter.
Visitor (website visitor)
A visitor is an individual who accesses a website. Tracking visitors is crucial for e-commerce analytics, helping businesses understand traffic patterns, user behaviors, and the effectiveness of marketing efforts.
Voice Commerce (shopping through voice-activated devices)
Voice commerce allows consumers to purchase using voice commands via smart speakers and voice assistants like Amazon’s Alexa or Google Assistant. It offers convenience and streamlined shopping experiences.
Warehouse Club
A warehouse club is a retail organization that operates large stores where members can purchase products in bulk at discounted prices. These clubs, such as Costco, Sam’s Club, and BJ’s Wholesale Club, charge an annual membership fee for access to their deals. They typically offer a limited selection of brand-name items, including groceries, appliances, and clothing, in large quantities.
Wholesaler
A wholesaler buys products in bulk from manufacturers and sells them to retailers or other businesses. This business model allows wholesalers to offer lower prices due to the volume of goods they handle. Wholesalers may also act as distributors, providing cost savings to retailers who then sell the products to end consumers.
White Label
White labeling involves one company purchasing a product from another company and rebranding it as its own. The original manufacturer produces the item, but it is sold under the purchasing company’s branding and logo. This practice is common in various industries, including technology and consumer goods.
Working Capital
Working capital is a financial metric that measures a company’s liquidity and short-term financial health. It is calculated by subtracting current liabilities from current assets. In retail, working capital includes cash, short-term investments, accounts receivable, and inventory, minus accounts payable, short-term borrowings, and accrued liabilities.
Window Display
Window displays are visual merchandising tools retailers use to attract customers into their stores. These displays are designed to be eye-catching and compelling, promoting special events, deals, and overall brand awareness. Effective window displays can significantly increase foot traffic and sales.
Warranty
A warranty is a guarantee provided by a manufacturer or seller regarding the condition and reliability of a product. It outlines the terms for repairs or replacements if the product fails or malfunctions within a specified period. Warranties serve promotional and protection purposes, assuring consumers of the product’s quality.
Wastage
In retail, wastage is the loss of products due to unsold inventory, packaging materials, or other inefficiencies. Effective waste management strategies include reducing packaging waste, encouraging reusable bags, lowering food waste, and partnering with green suppliers. Managing wastage is crucial for sustainability and cost savings.
Walkthrough (store walkthrough)
A store walkthrough is an inspection process where managers or staff walk through the retail space to assess various aspects such as product placement, cleanliness, and customer service. This practice helps ensure the store meets operational standards and provides a positive shopping experience.
WIC (Walk-in customer)
A walk-in customer is an individual who enters a retail store without a prior appointment or specific intention to make a purchase. Visual merchandising, promotions, and the overall shopping environment often influence these customers.
Wire Transfer (payment method)
A wire transfer is an electronic method of transferring funds from one bank account to another. It is commonly used for large transactions and offers a secure and efficient way to send money domestically or internationally. Wire transfers are favored for their speed and reliability.
X-factor
“X-factor” refers to a unique quality or characteristic that sets a company apart from its competitors.
Year over Year (YoY)
Year over Year (YoY) is a financial metric used to compare data from one year to the same period in the previous year. This comparison helps in analyzing the annual growth or decline of key financial metrics such as revenue, expenses, and profit. For instance, if a company’s revenue was $30 million last year and $25 million this year, the YoY growth rate would be calculated as (($30 million – $25 million) / $25 million) x 100 = 20%.
Year to Date (YTD)
Year to Date (YTD) refers to the period starting from the beginning of the current calendar year or fiscal year up to the present date. It is commonly used to measure performance metrics like sales, revenue, and investment returns. For example, if a company’s fiscal year starts on July 1 and the current date is January 15, YTD sales would include all sales figures from July 1 to January 15.
Yield Management
Yield Management is a strategic pricing method aimed at maximizing revenue by adjusting prices based on demand fluctuations. This approach involves analyzing consumer behavior and various external factors such as seasonality, local events, and market trends. In the hospitality industry, for example, yield management helps hotel owners optimize income by selling rooms at the right price to the right customer at the right time.
Yield Rate
Yield Rate in retail refers to the percentage of customers who complete a desired action, such as purchasing or signing up for a newsletter. It is calculated by dividing the number of successful actions by the total number of opportunities for those actions. For instance, if 100 customers visit a store and 20 make purchases, the yield rate would be 20%.
Yield Sign
A Yield Sign is a regulatory road sign that indicates drivers must slow down and yield the right of way to other vehicles and pedestrians approaching from different directions. The sign is typically an equilateral triangle with the apex pointing downward and is designed to be easily recognizable even in low-light conditions. It is often placed at intersections where two roads merge or at the roundabout entrance.
Yellow Tag Sale
A Yellow Tag Sale is a promotional event where items are marked with yellow tags to indicate discounted prices. These sales usually occur periodically, such as every few weeks or during specific seasons, and offer significant markdowns on various products. For example, TJ Maxx might have yellow tag sales in February and August, where items can be found for as low as $2 or $3.
Yarn Count
Yarn Count measures the thickness or fineness of yarn used in textile production. It is an essential parameter in the textile industry as it affects the final fabric’s texture, strength, and appearance. Higher yarn counts indicate finer yarns, while lower counts signify thicker yarns.
Yield Loss
Yield Loss refers to the amount of product lost during manufacturing or processing. This loss can occur due to various factors such as defects, inefficiencies, or waste. Minimizing yield loss is crucial for improving production efficiency and profitability.
Year to Date (YTD)
Year to Date (YTD) is a term used to describe the cumulative total of a metric from the beginning of the year up to the current date. It helps track performance and growth over a specified period, providing insights into trends, and helping businesses make informed decisions.
Zeitgeist Marketing
This term refers to marketing strategies that tap into a specific time’s prevailing cultural mood, trends, and popular sentiments. It’s about aligning your brand or product with the current zeitgeist to resonate more deeply with consumers.
Zebra Branding
A branding strategy that highlights a product’s unique features in stark contrast to its competitors, much like a zebra’s stripes. This approach aims to make a product stand out in a crowded market by emphasizing its distinct characteristics.
Zero Growth: This term describes a situation in which an economy or business experiences no growth. In a business context, it may refer to a company maintaining a steady state without expansion or contraction.
Zero Hours Contract
A type of employment contract where the employer does not guarantee the employee a set number of hours per week. Instead, the employee works only when needed, often at short notice. This can offer flexibility but also uncertainty for workers.
ZMOT (Zero Moment of Truth)
Google coined this term, which refers to the moment in the buying process when the consumer researches a product online before making a purchase. It highlights the importance of online presence and information in influencing purchasing decisions.
Zero Trust
A security framework based on the principle of “never trust, always verify,” which requires organizations to authenticate and authorize every user and device accessing their network, regardless of location.
