Retail Terminology – P
P
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.