Finding it hard to keep up with the latest retail terms and trends? You’re not alone. But it’s vital you keep on top of your game. That’s why we’ve collated a retailers’ dictionary — an essential resource of retail terms — both trending and traditional, that every savvy retailer should know.
An anchor store (aka draw tenant or key tenant) is a large — or one of the largest retail shops in a shopping centre. For example, an anchor store could be a large department store such as David Jones or a popular supermarket. This store helps drive foot traffic, making it an ideal neighbourhood for smaller retailers.
Augmented Reality (AR)
In retail, augmented reality is an interactive experience of a real-world environment where particular real-life objects are enhanced by computer-generated input. AR incorporates a combination of real and virtual worlds, real-time interaction and accurate 3D registration of virtual and real objects. Augmented reality is becoming increasingly popular in retail. It enhances the customer experience, helping recreate an in-store experience for online shoppers. Typical retail products benefiting from augmented reality include cosmetics, glasses, clothing, furniture, floor coverings and soft furnishings.
B2B (or B-to-B) is an acronym for business to business. B2B could, for example, be a transaction between a manufacturer and wholesaler or a wholesaler and retailer. Essentially, it is business between companies rather than between companies and individual consumers.
B2C (or B-to-C) is an acronym for business to consumer. B2C refers to any business that sells to individual consumers, for example, retail shops.
When an item or specific quantity of an item can’t be fulfilled at a requested date (in other words it is temporarily out of stock), it is considered to be on backorder.
A barcode is a machine-readable code — easily identifiable by its striking assembly of bright and light bars and alphanumeric characters. Together, they provide data about specific products and relevant information. They are used at the cashier, inventory control and stock-take in retail.
Big data refers to collecting and interpreting vast, diverse sets of information. It’s often stored in computer databases and analysed using specific software designed to handle large, complex datasets. Computer algorithms identify patterns and trends in this data. The data can then be used in conjunction with qualitative data (non-numerical information) to identify any number of customer insights which can help boost sales. Examples of big data include consumer behaviour trends, upcoming product trends, popular stock, product recommendations and even which point of sale terminal is most popular.
Brick and Click
Brick and click (or bricks and clicks) is a phrase retailers use to describe a business model that involves selling in a physical bricks and mortar store (bricks) and online (where customers click).
Brick and Mortar Store
A brick and mortar store is a physical store, as opposed to an online store or any other sales channel (e.g. pop-up store, social media store).
BOPIS is a retail acronym for ‘buy online, pick up in-store’. The more commonly used expression in Australia and New Zealand is Click & Collect. Both these terms refer to the customers making a retail transaction online, then picking up the order in-store. Similar services are curbside pickup and ROPIS (reserve online, pick up in-store).
‘Bulk’ means buying and transporting goods in large quantities in retail. For example, a retailer will buy goods in bulk at wholesale prices and sell them in the store at retail prices.
In retail, bundled pricing is where a company bundles a package of goods to sell at a price lower than they would be sold individually.
A cash wrap is where customers go to purchase the goods before leaving a physical store. It includes the point of sale system and surrounding areas, such as the table, aisles and retail displays.
Chargeback refers to a charge that is returned to a payment card after a customer has negotiated a return payment. This could occur on bank accounts or credit cards. Essentially a return payment, a chargeback is due to a merchant duplicating a charge payment in error or a charge that has been incorrectly made to a payment card.
Click & Collect
Click & Collect is a popular omnichannel fulfilment option. The customer buys an item online and then picks it up at the most convenient brick and mortar store. AKA BOPIS (buy online pickup in-store), it offers added convenience for the customer as they avoid shipping costs and can pick up the goods sooner. Additionally, the retailer can benefit as often the customer will make impulse purchases (adding profits) while collecting the goods.
Clienteling is used to increase customer value by personalising the shopping experience. The practice of clienteling is becoming more widely used, in line with advances in technology and affordability. Effective clienteling solutions use in-depth data retrieval methods, allowing businesses to accurately generate return on investment via training and technology.
Cloud POS (point of sale) is a remote Internet-based (web-based) point of sale system that allows payment to be processed through the Internet rather than a local or in-store server. Cloud-based point of sale systems are incredibly secure as they have enhanced encryption security. All transactions are recorded in real-time, along with other information such as store and employee information, inventory levels, etc. Updates occur automatically, and the retailer does not need to hold any clunky, expensive computer systems in-store.
Consumer Packaged Goods
Consumer packaged goods, or CPG, are items that are used daily, such as food, beverages, household products and other frequently used goods. Due to the vast number of customers, CPG will always have a ready market, but competition is intense. This is due to high market saturation and low consumer switching costs.
Contactless payments require no physical contact between the customer’s credit card or smartphone and the EPOS machine. Unlike the outdated strip technology, it relies on radio frequency identification (RFID). Contactless payments are secure and have become increasingly popular since Covid as the lack of contact minimises the spread of germs and viruses.
Consignment merchandising is where the consignor (producer/owner of the products) asks the consignee (business owner) if they will display the products for merchandising. The consignee only pays the consignor an agreed percentage fee for the goods once the goods are sold. If, after an agreed time, the goods aren’t sold, the consignee returns the goods to the consignor.
Consignment merchandising has both substantial advantages and disadvantages. Typically, those new to creating or wholesaling retail products are happy to have a retailer merchandise their goods. The products get exposure without the newcomer creating their own retail space or shipping goods once sold — the retailer benefits by not having to pay for the goods in advance. The disadvantages include waiting for payment, the risk of the goods being damaged or soiled and the potential for confusion for the retailer over inventory levels and accounting.
The conversion rate in retail is the percentage of visitors to a retail outlet (e.g. online or in-store) who make a purchase. Your conversion rate is an important KPI as it indicates how successful your retail and merchandising attempts are.
Your retail conversion rate is the percentage of people who visit your brick and mortar store. An average conversion rate is considered around 20 to 40%. Your eCommerce conversion rate is the percentage of people who visit your eCommerce store and make a purchase. As it’s far more accessible for people to visit your online store, the average conversion rate is lower at under 3%.
The conversion rate formula is as follows:
Number of sales/total number of visitors x 100 = conversion rate
A retail cooperative is a group of independent business owners who pool their resources to purchase products or goods in bulk. Together, they use the economic principle known as ‘economies of scale’, where an increase in scale (e.g. orders, manufacturing volume) results in a decrease in price. Retail cooperatives are common with locally owned pharmacies, hardware stores and grocery stores.
Cost of Goods Sold (COGS)
The cost of goods sold is an accounting term used to describe the total cost (or value) of products sold during a given time. COGS appears on your profit and loss statement and is used for calculating inventory turnover.
Cross-docking is an effective form of distribution strategy. Its main objective is streamlining the supply chain: from points of origin to distribution. Cross-docking actively consolidates shipments and redistributes partial loads.
Cross-merchandising is where the retailer displays products from different categories to entice the customer to increase sales. For example, multiple items for a barbecue may be placed together (e.g. a picnic basket, rug and barbecue tongs) for inspiration. Like cross-selling, where the retailer encourages the customer to purchase another item, cross-merchandising already displays various items together, stimulating the customer’s imagination. Rather than the salesperson doing the talking (involved in cross-selling), cross-merchandising does the talking (or thinking) for them, allowing the customers to see similar products they may also need or that may complement the primary product.
Cross-selling is where the retailer encourages the customer to buy something in addition to their primary item. It enhances the customer's purchase and increases the basket size. The classic example is McDonald’s “Would you like fries with that?” Cross-selling is a way of driving increased revenue.
CRM stands for customer relationship management, an online system for managing relationships with current and potential customers. It stores a directory of information about the customers.
Customer Experience (CX)
The retail customer experience (CX) includes the customer’s entire journey — and resultant experience — they have with a store from the moment they discover your store until the moment they leave. Therefore, the CX includes branding, signage, packaging, customer service, browsing and shopping experience (either online or off-line), and marketing and communications.
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Dead stock (or dead inventory) is a term retailers use to define stock that doesn’t sell or hasn’t sold for a long time. Dead stock could be due to the stock being out of season or simply not popular.
Depth of Assortment
Depth of assortment refers to the amount, or depth, of different product types. In some cases, a retailer may choose to keep inventory levels low by only stocking a small number of products in an existing category. Conversely, high volumes in depth of assortment allow for a wider variety of choice for consumers.
A distribution centre is a smaller facility than a firm’s main warehouse. It is used for receiving, storing and redistributing goods.
Drop-shipping is a retail fulfilment method. The seller takes money for orders without ever holding the goods. Once the purchase is complete, the drop shipper distributes the stock from an external supplier. This supplier could be a wholesaler, manufacturer or another retailer.
The pros and cons of drop-shipping are both strong. The pros include the fact that it requires no storage space, which is attractive for business owners who don’t want to open a brick and mortar store or rent storage space. Setup costs are low as the seller doesn’t have to purchase stock in advance. As no stock is held, it’s easier to offer a wider variety of goods and operate the business anywhere.
The cons of drop shipping include lower profits due to handling fees and percentages taken by various supply chain operators. Additionally, it can be hard to obtain real-time data on other suppliers’ stock levels, and shipping logistics can become complicated.
In retail, durable goods are classified as products with a long life expectancy, such as cars, jewellery, appliances and furniture. Alternatively, non-durable goods are classified as goods that need to be consumed immediately or have a lifespan of fewer than three years. For example, paper, food, cleaning products, textiles and footwear would all be classified as non-durable.
Also known as electronic commerce, eCommerce is buying and selling goods or services electronically (on the Internet). eCommerce is conducted over smartphones, computers, tablets or other smart devices. The term e-tailing is sometimes used for online retail selling.
Electronic Article Surveillance
Electronic article surveillance, or EAS, is used on big-ticket items to avoid in-store theft. Electronic tags or labels are affixed to goods of high value, which are deactivated by the sales attendant at the point of sale. These tags are also detected by a sound system at a store’s exit to alert the retailer to the incident of shoplifting.
An endless aisle is a helpful feature in a brick and mortar (physical) store that enables customers to browse the store’s entire range. The customer usually has access to the range via an iPad or similar touchscreen device. If they see an item they like and it is not in stock, the store can source the product and ship it to them.
Enterprise App Stores
The applications of enterprise app stores are developed to improve the consumer experience. The features and functionality of apps such as Amazon, Facebook and Apple App Store are replicated to enhance the overall user experience.
EPOS (Electronic Point Of Sale)
The EPOS is a computerised in-store system to record sales and control inventory. Depending on the software used, staff can access a multitude of information from the deposit, such as stock levels, ETAs, customer profiles, recommended products, bundled product specials and more.
If you have a credit, debit or prepaid card, you’ve probably noticed a small square silicon chip embedded in the card. This embedded square is the EMV chip. EMV is short for Europay, MasterCard and Visa (the three companies that created the standard). It is a payment method based on a technical standard for payment terminals, smart payment cards and automated teller machines which accept them.
EMV chips transmit data just like the magnetic strips on payment cards. However, payment terminals read the two differently. The two processes are known as ‘dipping’ and ‘swiping’.
‘Dipping’ involves inserting the card into the slot of a payment terminal to authenticate the EMV chip. ‘Swiping’ involves swiping a card’s magnetic strip through the machine for authentication. Although swiping is faster than dipping, dipping your EMV chip enables a unique code for each transaction. Therefore, it’s harder for fraudsters to steal data to produce counterfeit cards.
eTailing (or etailing) stands for electronic retailing. Also known as electronic tailing, It involves selling retail goods or services on the Internet using an electronic browser. It can easily be confused with eCommerce as both take place over the Internet. Etailing involves selling retail products and services over the Internet and includes B2B and B2C sales. eCommerce has a broader definition, which involves the commercial sale of products on the Internet, digital marketing data collection, etc.
Flash sales are when an online shop offers a promotion or sale of retail products that are dramatically reduced in price for a short period. The objective of a flash sale is to encourage impulse buying, rapidly increase sales over a short period, or sell surplus stock.
Flash sales are different from regular sales in that they have a very short time span (to encourage urgency). The discounts are more significant than usual (to encourage impulse buying). Only a limited selection of goods are on sale, often with reduced stock availability.
Any eCommerce business can offer a flash sale. However, some online business models are based purely on flash sales, such as Click Frenzy or Deals (dot com dot au).
Fast fashion is high fashion, trending clothing that is mass-produced cheaply. It moves quickly from fashion shows to shops while the demand is high. Examples of fast fashion include Zara and H&M.
Footfall refers to the amount of foot traffic (people) in a retail store or foot traffic passing by the store. Footfall can be a vital indicator of how successful a retail store’s marketing campaign is performing. It can also be known as people counting, traffic or shopper counting.
in retail, a forecast is an estimate of the future demands of services or goods. Future demands are partly dependent on past demands and seasonal fluctuations, and trend adjustments. For accurate forecasting, POS reporting and analytics software are vital.
A franchise is a licensed relationship between a franchisor and franchisee. With the intent to expand, the franchisor permits a franchisee to operate underneath a business name, its branding, products and knowledge/ongoing support — in exchange for a franchise fee. A franchise rule requires franchisors to disclose critical operating information to all prospective franchisees.
Retail fulfilment (or simply ‘fulfilment’) is assembling and shipping a customer's order. The retail order fulfilment process involves picking the goods from the available inventory, packing them, adding shipping information and sending the goods.
Green retailing is a management approach to reducing the environmental impact throughout every retail business section. Along with being good for the environment, green retailing can often reap the benefits of eliminating waste, lowering costs and sometimes, increasing efficiency.
The gross margin is the difference between the cost of an item and what it sells for. Gross margin is also used to describe the revenue a company keeps after all the direct costs of making a product or performing a service are accounted for. Sometimes this is also called gross profit margin.
Hardlines and Softlines
Hardlines, or hard goods, and softlines, or soft goods, are the two main categories of retail inventory. As their names suggest, hard goods include product types such as electronics, appliances and sporting equipment. Soft goods are literally soft to the touch — and include clothing, linen, towelling and plush toys.
With faster service and shorter wait times being the order of the day, high-speed retail is concerned with enhancing the customer’s shopping experience while ensuring the smoothest possible transaction. High-speed retail types include drive-through grocery stores or fast-food outlets and mobile businesses, such as food trucks and other quick-sale options.
Holiday marketing is engaging in marketing activities to increase spending over holiday periods. As many holiday periods have rituals attached to them (think Christmas, Easter), advertising specials and events at this time can help increase revenue.
Impulse purchases (or impulse buys) are when a customer makes an unplanned purchase of a service or product before checking out at the store. To encourage impulse purchases, retailers often entice customers with small, attractive items at the checkout. Click & Collect has also been shown to promote impulse purchases when customers arrive to collect their goods.
Integrated Supply Chain
An integrated supply chain is a planned alternative to mainstream supply-chain management. Eliminating the need for multiple systems, an integrated supply chain provides a central system to facilitate business operations with suppliers and distributors.
Internet of Things (IoT)
The Internet of things is where certain entities such as household items or cars ‘talk’ to each other. Today an increasing number of things now connect to the web. For example, smartphones can speak to lighting, clocks, air-conditioners, or speakers. Savvy store owners may use in-store devices to track real-time shopping behaviour in retail and then send personalised messages to these customers. Another IoT solution involves tracking store checkout wait times. If sensors can see that queues are mounting, they can automatically alert additional staff to open more service aisles.
Inventory management is the systematic organisation, management and storage of all inventory (either raw materials or finished goods/products) at the right amount at the right time and place — and at the right cost to ensure enough supply to meet customer demand. Inventory management can become complicated, which is why inventory management software is vital. With such software, inventory management goes beyond simply ordering and monitoring stock and includes everything from business management, production, lead time, demand forecasting, reports and accounting.
Inventory turnover is a financial ratio (or measurement) that indicates how fast a company sells and replaces its physical products over a certain period. Inventory turnover is also known as stock turnover, inventory turn or stock turn. Once the company understands the ratio, the business can use this as a benchmark to make improved decisions on anything from purchasing new inventory to manufacturing, pricing and marketing.
The ratio for inventory turnover is as follows:
Inventory Turnover = COGS (Cost of Goods Sold)/Average Value of Inventory
Layby (Aka Layaway)
The retail industry has used Layby systems for decades. Layby involves an agreement between the retailer and customer where the retailer can pay off the goods over several instalments. Unlike BNPL, the product must be completely paid for before the customer can collect the goods.
Leveraged Buyout (LBO)
A leveraged buyout is when a purchaser acquires another company using almost entirely borrowed funds. Usually, an LBO has a ratio of 90% debt to 10% equity. The purchaser uses the company’s assets as collateral to secure the loan and will use the company’s acquired cash flow (e.g. retail sales) to repay the loan.
A loss leader is a retail pricing strategy where a product is sold at a price lower than its production value (hence yielding no profit) with the intention of attracting new customers to sell additional products or services. Retailers employ this strategy if they are starting and need publicity, want to enter new markets or gain market share or know they can simultaneously attract the sale of other products yielding a good profit margin to make up for the loss.
In retail, a marketing calendar is a schedule of all retail events and specials planned for the foreseeable future. However, a marketing calendar should also be used as a reference point to gain insights into each event's success. Often, retailers will plan milestone events throughout the year and then put their efforts into each quarter.
Your marketing budget will help determine the number of marketing activities you propose. Once you know your budget, you must assess peak demand, promotion frequency, demographics and the resources you have on hand. A simple Excel spreadsheet may be all you need. Alternatively, both Google and Microsoft have online tools for creating marketing calendars that can integrate with your email and other software.
A markdown is a promotional discount or limited time sale where the product price is devalued — usually due to its inability to be sold at its ideal price. Markdowns often occur to make room for new inventory.
Merchandising refers broadly to facilitating sales to a customer. Best-practice merchandising uses effective marketing strategies to presentat goods and services to a customer. This in turn prompts higher numbers of sales due to the appeal of products on offer.
Minimum Advertised Price
A minimum advertised price is a supplier policy that prohibits pricing below a certain point. There are legal requirements for a minimum advertised price that the retailer must adhere to. However, the retailer can sell other items in-store for below the minimum advertised price.
Mobile payment is a payment made for a product or service through a portable electronic device such as an iPhone or tablet. Mobile payments are also known as mobile money, mobile wallet or mobile money transfer.
Mobile shopping is any shopping consumers do on mobile devices such as mobile phones or tablets.
Monthly Sales Index
A monthly sales index is a measure of sales. It is calculated by dividing each month’s sales by the average monthly sale and multiplying that number by 100. Any numbers above 100 indicate growth, while fewer than 100 signal loss.
As the name suggests, a multi-store retailer has more than one brick and mortar store. However, having multiple stores doesn’t determine how the business operates. For example, a retailer could be operating in a multichannel system, where all or some channels run independently in silos. Alternatively, the retailer may orchestrate the business through omnichannel. All sales channels and marketing activities are fully integrated with omnichannel, offering the retail customer one seamless, consistent shopping experience.
Multichannel retail is when a business operates through various sales channels. However, their data may not be integrated in the unified way that omnichannel retail operates. For example, a retail business may have both an online shop and a brick and mortar store. Yet, they do not display live stock levels in-store or allow the consumer to return products bought in one channel at another. A multichannel retailer does not have the customer’s entire shopping history on record, both on and offline.
Mystery shopping is research conducted in person, on the phone or online. It’s a method of market research that teaches a retailer or research company about customers’ spending habits. Mystery shopping data provides feedback that can be used to optimise the shopping experience.
A niche retailer specialises in a particular type of product. For example, a store that sells only sunglasses, doughnuts or a running shoe is a niche retailer. Niche retailing is agile because marketing strategies can be tailored to a specific audience or consumer.
Off-price retailers sell quality items at below cost. They are able to do so by buying directly from the manufacturer, cancelled orders and clearance items. Some off-price products could also include reconditioned goods.
Omnichannel Contact Centre
An omnichannel contact centre is the helpdesk or service function for customer care that unifies customer information collected across all communication channels within a universal queue. It provides seamless, real-time customer service across any sales channel.
Omnichannel marketing is a central, connected marketing experience across all channels or touchpoints any customer has with a retail business. The objective is to provide a consistent brand experience across all channels. This way, all facets of the retail business, such as content, sales offers, messaging, pricing, customer data and previous purchasing history, are the same.
Based on the omnichannel retail system, omnichannel fulfilment prioritises the fulfilment method desired by the customer’s preferences or needs. Omnichannel fulfilment aims to fulfil every SKU from every channel and demand source.
Omnichannel retail is where all sales channels and marketing activities are fully integrated to offer the retail customer one seamless, consistent shopping experience. The user experience is united no matter where they shop, for example, online, in-store or on an app. Omnichannel retail differs from multichannel retail. The latter offers several channels that are not integrated into one data set.
Omnichannel Supply Chain
An omnichannel supply chain refers to a centralised stock pool to control many factors such as fulfilment, pricing, stock management, sales and ordering to create one seamless retail shopping experience. This supply chain fulfils orders across all sales channels, with data kept up to date in real-time.
Order Lead Time
The order lead time is the time it takes for a retailer to order and receive a product from a supplier.
PCI compliance refers to guidelines based on the Payment Card Industry Data Security Standard. This applies to companies that accept credit card payments. The company must store, process and transmit cardholder data with a hosting provider that is PCI-compliant.
P2P, or peer to peer, is a transient online network. P2P allows a group of computer users with the same networking program to connect and directly access files from one another’s hard drives. Peer-to-peer software includes Gnutella and Napster. However, major content producers, such as record companies, have legal concerns about the sharing of copyrighted content.
A planogram is a diagram that shows how and where a product should be placed to help increase the number of sales per customer. As such, a planogram is a crucial part of merchandising. Planograms can also be used by a merchandiser to suggest the most effective displays.
Point of Sale (POS) System
The point of sale (aka point of purchase) is the ‘point’ where a customer visits in store for a retail transaction. It is where the customer pays for their goods. This could be at a terminal or a virtual sales point like an iPad or a similar mobile electronic device.
A pop-up store is a temporary store that “pops up” for a short period. They can be used for various reasons. For example, a retailer may want to introduce their product to new customers or test the geographical location, sell excess stock or encourage quick sales due to the limited operation time. Pop-up stores are also an excellent way to improve branding, connect with customers and create memorable customer experiences.
Prestige pricing, also known as image pricing, is a pricing strategy where the goods are deliberately set at a high level with the understanding that a lower price will inhibit sales. With prestige pricing, buyers will associate a higher price with superior quality and exclusivity. This pricing strategy is often used with luxury retail brands such as Prada or Chanel. For prestige pricing to be successful, the customer must value the brand and its products. If your retail store has not established a brand reputation or your product lacks unique features, prestige pricing can backfire.
Price Look Up
Price look up (or PLU) codes are four or five-digit numbers used by supermarkets to make checkout and inventory control easier. When scanned at checkout, a PLU code displays an item’s description and price. This removes the need for a cashier to look up the price.
A private label is a brand owned by a company that offers its products alongside competing products from other brands. It is also known as a private brand, store label, signature label or private label brand. The company doesn’t make private-label products in-house. Instead, it procures products from other manufacturers with a contract to package the goods in the company’s brand label.
Private labels can be lucrative as the retail company usually only chooses products they can identify as bestsellers. It allows the company to increase brand awareness and offer more products, often at a lower price to its competitors, making it a clever way to increase profits.
Product Life Cycle
The product life-cycle is the amount of time a product exists — from the moment it was introduced into the market until it’s taken off the floor. The four stages of a product lifestyle are introduction, growth, maturity and decline.
Quantity on Hand
Quantity on hand is merchandise that is in possession of the retailer. This means that the product is available immediately.
Quantity on Order
Quantity on order is the stock that retailers have on order but haven’t yet received. This can be open purchase orders or manufacturing orders.
A quantity discount encourages customers to buy items in bulk in return for a discounted price. While the savings of a quantity discount can be small, they can make a difference to canny shoppers or small businesses.
Relationship retailing is a strategy for retailers to create long-term relationships with their customers and build loyalty. Personalised marketing, loyalty programs and focusing on outstanding customer service and experiences are all ways of employing this strategy.
A retailer is a business or individual who sells goods directly to the consumer rather than a wholesaler or supplier.
RFID (Radio Frequency Identification)
Radio Frequency Identification is a wireless technology that can track or match an item or individual. In retail, it is used to identify items using radio waves. There are two parts – tags and readers. The tag uses radio waves to communicate its identity and other information. At the same time, the reader gives off radio waves to get signals back from the tag.
Although the method has been around for decades, RFID is not commonly used in supply chain management.
Retargeting is a marketing practice where online ads are targeted to consumers based on their previous actions or preferences. If a consumer has been browsing jeans or jackets online, an ad may appear on another form of social media that piques their interest in these products.
Ship from Store
Ship from store is a retail fulfilment method. The goods are shipped (delivered) from the most appropriate store rather than a warehouse.
A shopping channel is a television channel advertising or showcasing products you can buy by calling a number or pushing a button on your television remote control. It’s known as a form of home shopping.
Shrinkage refers to the difference between the amount of stock officially on record and the actual amount you have available. Shrinkage could be due to shoplifting, employee theft, supplier fraud or admin errors. Increasing your store's security by monitoring both staff and customers is one of the best ways to avoid shrinkage. Additionally, find ways to reduce human error.
SKU, or stock-keeping unit, is a number retailers assign to keep track of internal stock. An SKU represents a product’s attributes, including size, brand and colour. For example, one type of product could have 30 or more different varieties. Not to be confused with UPC, or universal product code, which applies to a product regardless of the retailer, an SKU is unique to a particular retailer.
Smart data refers to information that makes sense. Rather than looking at a confusing set of numbers, Smart data uses algorithms to identify various peaks and troughs in sales volume over time. These algorithms do the thinking for us and give us actionable insights.
Social commerce is a subset of electronic commerce involving online media, user-generated content and social interaction that supports any social interaction. Facebook or Instagram would probably be the first examples that come to mind (they are social platforms that can help drive sales). Still, there are several other types of social commerce platforms. For example, there is group buying (e.g. LivingSocial), peer recommendations (e.g. Amazon, Yelp); peer-to-peer sales platforms (e.g. eBay, Etsy), user-curated shopping (e.g. Lyst); social shopping (Motilo); and participatory commerce (e.g. Kickstarter).
Store Location Rationalisation
A store location rationalisation is the reorganisation of a company to increase its efficiency. This could be a reduction or expansion in company size or change of policy, product type or business strategy.
Store loyalty is when customers shop at a store because they enjoy and trust it. This occurs regardless of advertising or special offers. Store loyalty is usually encouraged by a rewards program. For example, coffee chains, supermarkets, food outlets, airlines and hotels offer discounts or free products based on store loyalty.
A supply chain is the system and processes involved in getting a retailer’s products to consumers. The supply chain encompasses everything from obtaining raw materials to making the products and delivering the product to the retail customer.
Or – in retail, the supply chain is the systems and processes involved in all inbound and outbound logistics that result in getting the goods from the supplier to the retail customer. The supply chain can include ordering, storing and managing inventory, picking and packing, shipping orders and dealing with product returns.
3PL, or third-party logistics providers, are freight forwarders, courier companies and other companies that offer subcontracted logistics and transport. 4PL, or fourth-party logistics providers, are consulting firms specialising in these 3PL services. As such, a 4PL is referred to as a non-asset-owning service provider.
Tribetailing is the tailoring of what a business promotes or produces in relation to a group of people or tribe. The idea is to not appeal to a mass market, but rather entails niche retailing to a select group. This might be in the form of a brand that targets products to a particular gender and age group.
Unified Brand Experience
A unified brand experience in retail establishes a consistent and seamless brand message across all sales channels. Whether the customer is shopping in a brick and mortar store, online or on social media, they should receive the same messaging, tone of voice, branding and graphic design. Additionally, the retailer must integrate all data to ensure a seamless customer experience at every channel. Omnichannel POS software makes a seamless customer experience possible by collecting and integrating all data for use at any channel. This unification provides a more fluid experience with personalised marketing, loyalty points, discount, returns and exchanges, and more.
Units per Transaction
Units per transaction, or UPT, is the measure of how many items are sold in the one transaction. This metric not only tracks growth over a period of time, but also reveals a customer’s product preferences and spending patterns.
Upselling encourages a customer to buy a more expensive product than what the customer first intended to buy. In retail, upselling is when the customer is encouraged to buy a more costly or enhanced product version.
Warehouse Management System
A warehouse management system refers to the software or processes involved in managing and administering warehouse operations. This includes from the time goods are received to when they are redistributed.
Wearable technology is smart devices that you can wear on your body as an accessory. For example, the Fitbit and Apple Watch are classified as wearable technology. Often, they sync to cloud-based software or an app (think of how you can read your Fitbit activity online on your phone). However, augmented reality eyeglasses like Google Glass are also classified as wearable tech, as are smart jewellery and smart clothing.
Like showrooming, webrooming displays a company’s products and services to best advantage. Unlike showrooming, which occurs at a physical store, webrooming displays the product online. If successful, this induces the customer to venture in-store to view the desired product before purchasing.