Retail Terminology – C
C
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.
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.