Retail Terminology – O
O
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.