Retail Rise Glossary

Retail Glossary 'A B'

Ad Slick, Atmosphere, ambiance, Acid-Test Ratio, Anchor Store, Brand Awareness, Blue Law, Break-Even Point, Bill of Lading, Brick and Mortar stores, Big Box Stores

Ad Slick

Ad slicks means to the final, camera-ready advertisement.It gets its name from the glossy paper on which it is printed.

Atmosphere/ambiance

Atmosphere is the physical characteristics and surrounding influence of a retail store that is used to create a good feeling/experience in order to attract customers.

Acid-Test Ratio

A measurement of how well a business can fulfil its short-term financial obligations without selling any inventory.

Anchor Store

A big retail store used to drive business to smaller retailers. For examble, big bazaar in shopping mall can be crowd puller and small stores in same mall also get benefit of this consumer’s traffic.

Brand Awareness

A gauge of marketing effectiveness measured by the ability of a customer to recognize and/or recall a name, image or other mark associated with a particular brand.

Blue Law

Rules created to prohibit particular activities to certain days or hours. Many blue laws have been removed from the law books or are no longer enforced, as they are seen discriminatory by many.

Brand

A brand is a name, symbol or other identifying mark for a seller's goods or services. It is distinct from other sellers.

Break-Even

Point it is the point in business where the sales equal the expenses. There is no profit and no loss.

Brick and Mortar stores

Brick and mortar store refers to retail shops that are located in a building as opposed to an online shopping destination, door-to-door sales, kiosk or other similar site not housed within a structure.

Bill of Lading

A bill of lading is a document used as evidence that a transport company or carrier received goods from a shipper.

Big Box Stores

These are large stand-alone store with varying market niches. The terms superstore, megastore, and supercenter also refer the same.

Generally, big-box stores can be broken down into two categories: general merchandisers, such as Wal-Mart and Carrefour, and so-called category killers—such as home depot,Barnes and Noble, or best buy —which specialize in goodswithin a specific range, such as hardware, books, or electronics.

Indian examples are Big Bazaar(general merchandisers). Vishal megamart (general merchandisers), star bazaar(general merchandisers),Staple(stationary) , Croma (electronics and electric appliances) etc.

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Retail Glossary 'C'

Ad Slick, Atmosphere, ambiance, Acid-Test Ratio, Anchor Store, Brand Awareness, Blue Law, Break-Even Point, Bill of Lading, Brick and Mortar stores, Big Box Stores

Cash Discount

This is  the discount in price if payment is done within a specified period of time.

Cash Flow

The movement of money in and out of a business and the resulting availability of cash.

Category Killer

A large retail chain store that is dominant in its product category. This type of store generally offers an extensive selection of merchandise at prices so low smaller stores cannot compete.The existence of a category killer will eliminate almost all market entities (killing competitors in the same category). E-Bay can be as an example of a category killer as it holds more than three quarter of online auction B2C, C2C market. Another example is Toys “R” Us,the biggest toy store in US.

Chain Store

One of a number of retail stores under the same ownership and dealing in the same merchandise. Examples are many, wall mart, Carrefour, big bazaar, shoppers stop stores etc.

Comparable Sales

Comparable-store sales is a measurement of productivity in revenue used to compare sales of retail stores that have been open for a year or more.Historical sales data allows retailers to compare this year's sales in their store to the same period last year.

Contribution Margin

Contribution Margin is the difference between total sales revenue and total variable costs. The term is applied to a product line and is generally expressed as a percentage.

Cost of Goods Sold

The price paid for the product, plus any additional costs necessary to get the merchandise into inventory and ready for sale, including shipping and handling.

Coupon

These are promotional tool in the form of a paper document (or code in online market) that can be redeemed for a discount when purchasing goods or services. This can be loyalty coupons, volume coupons , promotional coupons etc.

CRM - Customer Relationship Management

Customer Relationship Management (CRM) is a business strategy designed to reduce costs and increase profitability by strengthening customer loyalty.

Cyber Monday

Cyber Monday is one of the busiest shopping days of the year for online retailers. Online retailers notice an increase in sales on Monday as many consumers who were too busy to shop over the weekend or did not find what they were looking for, headed to the web on Monday from work or home to find bargains.

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Retail Glossary 'D E F'

Ad Slick, Atmosphere, ambiance, Acid-Test Ratio, Anchor Store, Brand Awareness, Blue Law, Break-Even Point, Bill of Lading, Brick and Mortar stores, Big Box Stores

Dead stock

It is merchandise that cannot be sold. This type of product has never been worn, used or sold and has been in inventory for long period of time due to changing consumer’s taste etc. It often has opened original packaging and tags.

Digital Signage

Digital signage refers to a variety of technologies used to replace traditional retail signs. Instead of static print signs and billboards, digital signage is composed of electronic signs dispersing content and messages in the most targeted, interactive way.

Drop Shipping

Drop shipping is the process in which a retailer markets a product, collects payment from the customer and then orders the item from a supplier, to be shipped directly that customer. The retailer's profit is the difference between the amount collected and the amount spent. No inventory is held and the retailer is not involved in the shipping.

Facing

The number of identical products (or same SKU) facing out toward the customer. Facings are used in planograms when zoning a retail store.

Fair Trade

Fair trade is an organized movement developed to promote standards of environmentalism and fair wages and labour practices, meet social goals and ensure that companies negotiate with the growers, manufacturers and producers of products for a fair price. This social-responsibility movement focuses on exports from developing countries. This is integrated marketing which takes care of social, legal, environmental frameworks along with profits.

First In, First Out

A method of stock rotation in which goods that are received first are sold first. Newly received product is stocked behind the older merchandise.

FOB

FOB (Freight On Board) is shipping term used to indicate who is responsible for paying transportation charges. E.g. FOB origin, FOB Destination

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Retail Glossary 'G H I J K L'

Ad Slick, Atmosphere, ambiance, Acid-Test Ratio, Anchor Store, Brand Awareness, Blue Law, Break-Even Point, Bill of Lading, Brick and Mortar stores, Big Box Stores

Gross Margin(GM)

Gross margin is the difference between what an item cost and for what it sells.
GM= Sales-cost of goods sold

Gross Margin Return On Investment(GMROI)

A measure of inventory productivity that expresses the relationship between your total sales, the gross profit margin you earn on those sales, and the number of dollars you invest in inventory.

GMROI(%)=(Gross Profit/Total Investment)*100

Hardlines

A store department or product line primarily consisting of merchandise such as hardware, housewares, automotive, electronics, sporting goods, cosmetics etc.

Inventory

Inventory is the merchandise a retail store has on-hand. The term also refers to the act of counting, assorting and recording in-stock merchandise or supplies.

Inventory Turnover

The number of times during a given period that the average inventory on hand is sold and replaced

Inventory Turnover= Cost of goods sold / Average Inventory
Average Inventory = (Beginning Inventory + Ending Inventory)/2

Kiosk

The term kiosk,as related to retailing, refers to a small stand-alone structure used as a point of purchase. This can be either a computer or display screen used to disseminate information to customers or may be a free-standing, full-service retail location. Kiosk are often found in malls and other high-traffic locations.

Keystone

Keystone pricing is a method of marking merchandise for resell to an amount that is double the wholesale price.

Loss Leader

Merchandise sold below cost by a retailer in an effort to attract new customers or stimulate other profitable sales.

Loss Prevention

Loss prevention is the act of reducing the amount of theft and shrinkage within a business.

Layaway

Layaway is the act of taking a deposit to store merchandise for a customer to purchase at a later date.

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Retail Glossary 'M N O'

Ad Slick, Atmosphere, ambiance, Acid-Test Ratio, Anchor Store, Brand Awareness, Blue Law, Break-Even Point, Bill of Lading, Brick and Mortar stores, Big Box Stores

Minimum Advertised Price

A suppliers pricing policy that does not permit its resellers to advertise prices below some specified amount. The reason is to maintain to product/supplier’s brand image which may get hurt if retailer sells the product at low price.

Markup

A percentage added to the cost to get the retail selling price.

Markdown

Planned reduction in the selling price of an item, usually to take effect either within a certain number of days after seasonal merchandise is received or at a specific date.

Margin

The amount of gross profit made when an item is sold.

Marketing Calendar

A marketing calendar is a tool used by retailers to show what marketing events, media campaigns and merchandising efforts are happening when and where, as well as the results.

Merchandise Mix

A merchandise mix is the breadth and depth of the products carried by retailers.

Mystery Shopping

In mystery shopping, retailer uses of trained personnel or a professional service or to anonymously evaluate a retail store, so that it can find employee behaviour to customers, compliances to set operational guidelines etc in natural setting. It is Also Known As Secret Shopping, Customer Service udits

Examples: A leading manufacturer wanted to understand a sales discrepancy in their products being sold at two national retailers. The company conducted a mystery shopping study to identify the root cause of the discrepancy and within days professional mystery shoppers were able to reveal statistically significant reasons for the difference.

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Retail Glossary 'P Q'

Ad Slick, Atmosphere, ambiance, Acid-Test Ratio, Anchor Store, Brand Awareness, Blue Law, Break-Even Point, Bill of Lading, Brick and Mortar stores, Big Box Stores

Operating Expenses

The sum of all expenses associated with the normal course of running a business.

Odd-Even Pricing

A form of psychological pricing that suggests buyers are more sensitive to certain ending digits.

Odd pricing refers to a price ending in 1,3,5,7,9 just under a round number (e.g., Rs. 99, Rs. 199, $312.95,$ 2.95). Even pricing refers to a price ending
in a whole number or in tenths (e.g., Rs. 50, $6.10, $55.00).

Open-to-Buy

Merchandise budgeted for purchase during a certain time period that has not yet been ordered

Planogram

Visual description, diagram or drawing of a store's layout to include placement of particular products and product categories

Profit Margin

A ratio of profitability calculated as earnings divided by revenues.

Profit margin (in %) = (Profit/sales)*100

Product Life Cycle

The stages that a new product is belived to go through from the beginning to the end: Introduction, Growth, Maturity and Decline.

Private Label

Products which are generally manufactured or provided by one company under another company's brand or retailer itself. For, example we see many low prices garments in retails store, which are not available any where else.

POS

Point of Sale (POS) refers to the area of a store where customers can pay for their purchases. The term is normally used to describe systems that record financial transactions. This could be an electric cash register or an integrated computer system which records the data that comprises a business transaction for the sale of goods or services

Product Depth

Product depth is the number of each item or particular style of a product on the shelves. Product depth is also known as product assortment or merchandise depth.

Product Breadth

The product breadth is the variety of product lines offered by a retailer.

Purchase Order

A purchase order (PO)is a written sales contract between buyer and seller detailing the exact merchandise or services to be rendered from a single vendor.

Point-of-Purchase Display

Point-of-purchase displays, or POP displays, are marketing materials or advertising placed next to the merchandise it is promoting. These items are generally located at the checkout area or other location where the purchase decision is made. For example, The checkout counters of many convenience stores are cluttered with cigarette and candy POP displays.

Quantity Discount

A reduction in price based on the amount purchased. May be offered in addition to any trade discount. Also referred as volume discount. For example, for purchase above Rs. 10,000 supplier may offer 4% discount etc.

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Retail Glossary 'R S'

Ad Slick, Atmosphere, ambiance, Acid-Test Ratio, Anchor Store, Brand Awareness, Blue Law, Break-Even Point, Bill of Lading, Brick and Mortar stores, Big Box Stores

Run of Paper

Run of paper is an advertising term by newspapers referring to an advertisement that may be placed anywhere within the paper.

Sales Floor

The sales floor is the location of a retail store where goods are displayed and sales transactions take place, this is actual selling area.
For example, the receiving of merchandise takes place in the outside counters ,but all direct sales and customer interactions are done on the sales floor.

Sell-Through Rate

Sell-through Rate is a calculation, commonly represented as a percentage, comparing the amount of inventory a retailer receives from a manufacturer or supplier against what is actually sold to the consumer.

Sell Thru % = Units Sold / (Units on-Hand + Units Sold)

Shoplifting

shoplifting is the crime of the taking of merchandise offered for sale without paying.

Shrinkage

Retail shrinkage is a reduction or loss in inventory due to shoplifting, employee theft, paperwork errors and supplier fraud.

SKU

The Stock Keeping Unit (SKU) is a number assigned to a product by a retail store to identify the price, product options and manufacturer.

Sliding

A loss prevention term referring to the act of a cashier passing merchandise around the cash register barcode scanner without actually scanning the item.

Softlines

A store department or product line primarily consisting of merchandise such as clothing, footwear, jewelery, linens and towels.

Staple Goods

Staple goods are products purchased regularly and out of necessity. Traditionally, these items have fewer markdowns and lower profit margins. While price shifts may raise or lower demand for certain kinds of products, the demand for staple goods rarely changes when prices change.

Sustainability

Sustainability refers to the characteristic of certain products that provide environmental, social and economic benefit. Sustainable products are produced with minimal energy and packaging. They are considered eco-friendly as they cause no harm to the environment throughout their entire life cycle.

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Retail Glossary 'T U V W X Y Z'

Ad Slick, Atmosphere, ambiance, Acid-Test Ratio, Anchor Store, Brand Awareness, Blue Law, Break-Even Point, Bill of Lading, Brick and Mortar stores, Big Box Stores

Trade Discount

A discount on the list price given by a manufacturer or wholesaler to a retailer.

Triple Net Lease - NNN or Net-Net-Net

A rental agreement on a commercial property where the tenant agrees to pay all real estate taxes, building insurance, and maintenance on the property, in addition to the rent and other fees that may be added to the lease.The tenant is generally responsible for all repairs of the building in a triple
net lease.

Visual Merchandising

Visual merchandising is the art of implementing effective design ideas to increase store traffic and sales volume.

Word-of-Mouth

This is a possibly the most effective form of marketing. It is the verbal recommendation and positive approval by a satisfied customer to other potential customers.

Working Capital

This is Liquid assets available to build and grow a retail business. It is measured by current assets minus current liabilities. A positive working capital is needed until the shop can produce a profit.

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