Perhaps you’ve been in retailing as long as you can remember, or maybe you’re new to the game. Either way, it’s good to have a glossary of retail terms handy for quick reference or to help training your newest store associates.
Here are 45 of the top terms you need to know
1. Add-On Sale.
Items customers buy in addition to items they originally came in to purchase because store associates suggested they buy them. Adding-on to the sale is an easy way to increase your average sales and store profits.
2. Allowance.
Price reductions that are taken for numerous reasons including, but not limited to, damaged or discontinued merchandise, floor samples, or late delivery of product.
3. Big Data.
Large amounts of data that is analyzed to reveal patterns and trends that relate to human behavior and interactions. Data may include online consumer behavior such as clicks, open rates, the length of time a person spends on a website, income, and Census info, as well as what happens on social medias. Big Data has been called “Analytics on steroids”.
4. Branding.
A brand is not your logo or slogan or merely the name of your store. A brand is the emotional connection – the physical reaction – customers feel when they hear your store name, see your logo, visit your website, or walk in your front door. It’s the concept you own in the mind of the customer; it’s the experience they can get only from you.
5. Break Even Point.
The point where your sales are equal to your expenses. In other words, when your store has no profit and no loss.
6. Brick and Click.
The connection between your physical store and your ecommerce site. Brick and Click also includes web to store services where customers order online and pickup at the store.
7. Charge Back.
A deduction taken by a retailer on an invoice to account for instances including freight allowances, short orders, or damaged merchandise and more.
8. B2B.
Business to Business selling.
9. B2C.
Business to Consumer selling.
10. Card Dipping.
See number 19: EMV (EuroPay, MasterCard and Visa). Click here to learn more.
11. Cash Flow.
Money that comes in to your store, and goes back out again, resulting in available cash.
12. Customer Relationship Management (CRM).
A business strategy utilizing techniques designed to build profit by keeping customers loyal to your store.
13. Cross-Merchandising.
Displaying complementary product together to save shoppers time. Cross-Merchandising makes it easy to visualize how the items will work together. Bonus: Cross-Merchandising encourages add-on purchases.
14. Decompression Zone (DZ).
The first 5 to 10’ just inside your store’s front door. Because this is where shoppers refocus for the shopping ahead, they will miss anything you place there. Just beyond the DZ is where they actually begin shopping.
15. Demographics.
The population categorized in groups by age, gender, income, occupation, education, religion, race, family size, life style, and more. Understanding demographics is helpful in determining which products and services to offer to the consumers who live in your community.
16. Drop Ship.
Items not stocked by a retailer that are shipped to the consumer directly from the manufacturer or distributor.
17. Email Blast.
An email you “blast” out to a large number of people at the same time.
18. End Features.
Also known as End Caps, these high-impulse shopping areas are located at the end of gondolas and similar line fixtures. End features are best merchandised with great new items, hot deals, and value buys. Buy for them specifically at trade shows, and create an End Feature Planning Calendar so you always know what will be displayed on which end cap next.
19. EMV (EuroPay, MasterCard and Visa).
EMV is new to the United States but the rest of the world has been using EMV cards for almost a decade. An EMV card is different from regular cards because of the small metallic square – actually a computer chip – that’s embedded into the card.
Today, you swipe a magnetic strip on your credit card to pay for a purchase via debit or credit. The information on the magnetic strip is sent to the processor that sends back an approval code. The information on the strip never changes and contains all your data. This type of card is susceptible to data breach.
When an EMV card is used, it is inserted (called “Card Dipping”) and the small metallic computer chip is used to create a unique transaction code with every purchase. That new code is written to a computer chip, changing your card every time you shop. So, unlike magnetic stripe cards whose data never changes, every time an EMV card is used, the data on the card changes and can only be used once, never to be used again.
Now that it’s after October 1, 2015, when a customer presents you with an EMV chip-based card you need to be able to process it on an EMV device. *Click here to learn more.
20. Etailing – Electric Retailing.
The practice of selling goods over the Internet.
21. Factor.
A bank or finance company that buys the receivables from a manufacturer. Retailers pay the factor for goods purchased instead of paying a vendor directly.
22. Flash Sales.
Remember K-Marts “Blue Light Specials”? Flash Sales are sale events that are announced spontaneously and take place for a limited time. Shoppers need to be in the store to take advantage of a flash sale.
23. Flow.
How shoppers move through your store. People shop your sales floor based on how you set your fixtures, creating flow..
24. GMROI.
Gross Margin Return On Investment is commonly defined as “an inventory profitability evaluation ratio that analyzes your store’s ability to turn inventory into cash above the cost of the inventory”.
25. “Hot Spot Cross” Merchandising.
The “sweet spot” section of a fixture that sells product better than others. To locate the Hot Spot Cross in any fixture, draw an imaginary cross through the center of a fixture; the area where the lines intersect is the hot spot. Fixtures such as gondolas with many sections will have a Hot Spot Cross in each one of the sections. BONUS: Since most customers will reach for product with their right hand, the position just to the right of the center of the cross is an equally hot display area. Use the” Hot Spot and One to the Right” space to display new items, and to energize product that might be suffering from poor sales.
26. Impulse Zones.
70 percent of purchase decisions are made in-store. Impulse zones are areas of the sales floor where fixtures are placed to entice customers to buy product on impulse. One example would be the tables of stuffing and cranberry sauce that is merchandised in the meat department of a grocery store near the frozen turkeys. Another would be the table of ladies gift items displayed in the men’s department during the holidays in a department store.
27. Inventory Turnover.
“Turn” is the amount of times in a specific time period that your inventory is sold and replaced with fresh product.
28. Keystone.
The retail price charged for an item that is double the wholesale price.
29. Lake Front Property.
The space on the right side of your sales floor, just past your Decompression Zone. If your front door is on the right then your Lake Front Property will be on the left side of your store.
30. Loss Leader.
An item that is sold at a loss in order to attract more shoppers to the store.
31. Margin.
The amount of gross profit that is made when an item is sold.
32. Markdown.
The permanent lowering of the price of a product because it did not sell at full price. Markdowns are necessary to clear your inventory to make room for new items. As a rule, the first markdown taken should be the deepest.
33. Omni-Channel Retailing.
Establishing a presence on several channels and/or platforms. For example, having a brick and mortar store, a click and order store, mobile ordering capabilities, online services, etc. that enable customers to engage and interact with your store or brand across several channels.
34. Open to Buy (OTB).
Merchandise that is budgeted for purchase during a specific period of time that has not yet been ordered. OTB helps you budget and plan your future purchases.
35. Psychographics.
The identification of the consumer life styles and stages that are believed to influence shopping decisions.
36. Point of Sale System (POS).
A system that typically includes a cash register or a computer system and/or an inventory software program that allows you to track sales, calculate when to reorder, analyze inventory levels, and more.
37. Profit Margin.
The amount out of every dollar of sales a business actually keeps as earnings.
38. Purchase Order (P.O.):
The form retailers use to place orders for goods and/or services. P.O.’s list the type, quantity, and agreed upon price for goods and/or services the seller will provide to the buyer. (Note: You should always use your own P.O. when placing an order.)
39. Radio Frequency Identification (RFID).
A chip embedded in an item’s label or packaging that contains important information about the product. It is used primarily for tracking purposes.
40. Showrooming.
Showrooming happens when a consumer visits a store to learn about a product before ordering it from an online retailer.
41. Shrinkage.
The difference between the amount of merchandise you have on paper and the physical stock on your sales floor and/or back room. This difference is generally caused by shoplifting, employee theft, and administrative errors.
42. Speed Bump.
Small fixtures or tables merchandised with cool product that are placed front and center just beyond your Decompression Zone. Their job is to stop busy shoppers, redirect their focus to your merchandise, and set the tone for what you’ll find in the store.
43. Stock-Keeping Unit (SKU).
An item’s identification code that can be found on tags and/or bar codes that help the retailer track the item for inventory. An SKU lists the important attributes of an item, such as style number, vendor, size, color, etc.
44. Visual Merchandising.
The use of proven techniques to effectively display items for sale.
45. Webrooming.
The opposite of Showrooming. Webrooming happens when a consumer checks out a product online before visiting the brick and mortar store to make a purchase.
We’ll keep this list updated throughout the year. Drop us a, email at info@kizerandbender.com if you have a question about retail jargon or if you have a favorite term you would like us to add!
COPYRIGHT KIZER & BENDER 2015 | ALL RIGHTS RESERVED
* Source: J. Lombardi, Princess of POS and National Sales Manager, Soft Intelligence
photo credit: 20090912_MG_3488 via photopin (license)
