reatil dictionary

8/7/2019 Reatil Dictionary

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ABC analysis

A form of analysis that covers a range of items, from inventory levels to

customers and sales territories, into three groups: A = very important; B =important; C = marginal significance.

AerotropolisAn airport village . A new type of urban form comprising aviation -intensivebusinesses and related enterprises extending up to 25 kilometers outward from

major airports. The term was defined by Dr. John D. Kasarda, an American

academic who defined[concept in 2000. It is now being extended to includeeven non aviation related businesses that are coming up to cater to the customer

traffic created by airports.

Agent

A business intermediary who acts on behalf of the manufacturers. His role is to

collect orders from retailers and subsequently to collect payments. He gets

commission on the basis of the collections.

Aging

A process that determines the age (number of days old) of product in stock.

Anchor store

A large store, such as a department store or supermarket, that is prominently

located in a shopping mall to attract customers who are then expected to also

visit the other shops in the mall e.g. Shoppers Stop is the anchor store at AnsalPlaza in Delhi, Garuda Mall in Bangalore and Inorbit in Mumbai.

APMC : Agricultural Produce Marketing Committee

The APMC act instituted by the Govt. of India Markets divides the geographicalarea of a State into market areas each of which is managed by the Market

Committees constituted by the State Governments. Once a particular area is

declared a market area and falls under the jurisdiction of a Market Committee,no person or agency is allowed freely to carry on wholesale marketing

activities. The mandis in each market area come under the jurisdiction of the

APMC.

Assortment Planning

This term applies to the merchandising and buying function in retail. It refers tothe task of determining the specific quantities and features (brands, colors,sizes) of each product being purchased.

Atmospherics

The architecture, layout, signs and displays, color, lighting, music and odourswhich together create an image in the customers mind. In short, the extra

elements that enhance a retail strategy mix.


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Automatic reordering system

Involves the use of computers to generate weekly merchandise orders that arebased on sales, in relation to model stock plans.

Average Basket SizeAverage number of units moving in one singe bill. It is calculated as Total unitssold/ No of invoices.

Average Ticket Size

This refers to the average bill value. It is calculated as Total sales / No ofinvoices.

Average unit value

This refers to the average price of a single unit. It is calculated as Total value/No of units.

B2B (Business-to-Business)

Business model focused on sales to other businesses. Manufacturers andwholesalers fall into this category since they further supply to businesses that

supply to the ultimate consumer.

B2C (Business-to-Consumer)

Business model focused on sales to consumers. Retailers are typical B2C

companies.

B2G (Business-to-Government)

Business model focused on sales to national, state, or local government

agencies.

Barcode

A unique identification for a product. It is normally printed on a sticker and put

on the relevant product.

Basket Size

The number of units moving in one single bill e.g. if you have bought 2 shirts

and one trouser from a store then the basket size is 3 pcs.

Beach head

A retail expansion strategy that focuses on establishing a strong store presence

or beachhead in key markets before expanding to smaller ones.

Benchmarking

The process of setting standards of performance based on the achievements of


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high performing competitors.

Bin

Represents a physical place to store inventory. Normally used in the context of

warehousing and generally refers to physical rows/shelves.

Black Friday

The day after Thanksgiving in the USA. It is seen as the beginning of the

Christmas Shopping season. While Black Friday is often thought of as the

busiest retail shopping day of the year, in fact the busiest retail shopping day of

the year is usually the Saturday before Christmas. The origin of the term BlackFriday comes from the shift in profitability during the holiday season. Black

Friday marks the day when many retailers shift from being unprofitable, or "in

the red," to being profitable, or "in the black."

Book Inventory

Value of goods on hand at a given time as reflected in the books of accounts.This may vary from the actual stocks on account of theft.

Bottom-up planning

Involves estimating total sales for a business by adding together the plannedsales figures that have been developed by each business unit.

Breadth

Relates to the number of product lines or to the number of brands that is carriedby a store or department within a product classification.

Bricks and mortar

Refers to a physical retail store.

Broad and shallow

Refers to a merchandising strategy that focuses on offering a wide selection of

brands/ lines with little depth in each.

Buyer

As the word denotes refers to the person in the retail hierarchy who is

responsible for selecting, pricing, and purchasing merchandise.

Cannibalization

To cut into; cause to become reduced; diminish e.g. New products introduced in

the next six months will cannibalize sales from established lines. Also occurswhen sales of one store are negatively affected because of sales of another store

e.g. If Brand X has a store in Connaught Place and they open a second store in

the same market. there is a danger that the second store will cannibalize ( cutinto/ reduce) the sales of the first store.


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Carpet Area

This refers to the net usable area available for a store. Stores, especially inmalls, need to discount upto 40% of gross area to arrive at the Carpet area.

Carrying and Freight Agent (C&F agent)A business intermediary who buys goods in bulk from the manufacturer andbills them further to retailers as per orders booked by the manufacturers sales

team. Different from the whole seller/ distributor in that he does not play an

active selling role.

Cash & Carry stores

These are wholesale stores that cater to retailers, hotels and offices. Prices are

normally discounted. Products are bundled in wholesale packs. E.g. Metro.Internationally these stores also cater to individuals, but in India on account of

FDI restrictions they only cater to other businesses. Also known as Price Clubs

Cash discounts

Discount on the invoice when a retailer pays in a certain specified time e.g.

payment within 7 days of delivery may earn a cash discount of 3%

Cash till

The cash counter in a retail store where bills are cut and cash (and credit card)

transactions take place.

Catalogue store

A type of retail store that displays product catalogs from which customers selectthe product e.g. Argos (UK)

Catchment Area

The geographical area from which trade to a store or centre is attracted; the

primary catchment area defines the area from which the vast majority of

shoppers (80-90%) tend to use a particular store or centre in preference to otherstores or centres.

Category

A classification assigned to a certain group of related retail items e.g. The Men's

wear category.

Category killer

An especially large specialty store featuring an enormous selection in itsproduct category and at relatively low prices e.g. Toys R us.

Category Management

A method of organizing the retail structure so that it is managed by product


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category e.g. mens, womens, sports, kids etc

CCTV

Closed circuit TV. Used to monitor movement in different parts of a store and

to deter pilferage

Central business district (CBD)

The hub of retailing in a city. It is the largest shopping area in that city and is

synonymous with the term downtown. The CBD exists where there is the

greatest concentration of office building and retail stores.

Centralised Organsiation

Retail organizations where all strategic and administrative decision-making is

done at some central point. This permits a high degree of standardization. Theseretailers believe that relatively few people who are experts should take all

important decisions.

Centralized buying

Occurs when all buying activities are performed from a retailers central

headquarters

Chain Store

Two or more retail stores under single ownership

Channel

A distribution route e.g. a brand can choose to sell its products through multiple

channels including own stores, department stores, distributors etc.

Charge Back

A reversal of a credit card transaction, typically initiated by the card issuer atthe cardholder's request. Charge backs can occur for any number of reasons,

including customer disputes, potential or actual processing errors, and

authorization issues.

Cherry Picking

Selecting only the best. The act of picking only the best options and leaving the

less attractive ones.

Classic

A style that is in demand continuously even though minor changes may be

made in the product e.g. a mens white full sleeve shirt with a regular collar.

Click and mortar

Refers to retailers who have both an on line presence (click) and physicalstores (mortar).


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Closing a drawer

The process of recording the ending amount of cash and other payment types ina drawer before performing end of day posting. Normally, a drawer is closed at

the end of each day.

Collect ON DELIVERY (COD)

A shipping method where the buyer pays for the purchase when goods are

delivered.

Concession

A pre-determined area within a store that is given to a brand normally on

consignment terms. The area is managed and branded by the brand . Also

known as shop-in-shop.

Consignment

An stores arrangement with the supplier that indicates that the buyer will take

merchandise into a store but will pay for it only when it sells

Consignment Goods

Items not paid for by retailer until they are sold. The retailer can return unsold

merchandise and does not take title until the final sale is completed.

Contiguous expansion

A retail expansion strategy that locates new outlets in markets close to existing

ones.

Convenience store

A food oriented retailer that is well located, is open long hours, and carries a

moderate number of items. It is small, has average to above average prices andaverage atmosphere and customer services. In India these are known as Kirana

stores.

Conversion

The number of people who buy from among those who walk into a store e.g. if

a 100 people walk into a store and only 50 buy, the conversion is 50. The

conversion percentage for the same will be 50%.

Cost of goods

Includes the actual cost of the merchandise including all expenses involved in

getting the goods from the vendor to the store and any alteration coststhereafter. Cost of goods sold = Cost of merchandise (discounts +

transportation + alteration costs)


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Cost plus pricing

A pricing strategy where the retail price of the product is determined on the

basis of a pre determined mark up on cost

Counting a drawer

The process of recording the amount of cash and other payment types in adrawer. Normally, the drawer is counted at the end of each business day.

Critical mass

The size at which a business undergoes a fundamental change in regard to

operations e.g. a retailer needs to achieve a certain critical mass before it can re-negotiate terms with suppliers

Cumulative or Total mark up

The total mark up that is achieved across all products in the category.

Customer Relationship Management

A customer centric business strategy with the goal of maximizing profitability,revenue, and customer satisfaction. The term is also used for software

technologies that support this business goal and which include the capture,

storage and analysis of customer information. The technology to support CRMinitiatives must be integrated as part of an overall customer-centric strategy.

Many CRM initiatives have failed because implementation was limited to

software installation without alignment to a customer-centric strategy.

Cyber Monday

Refers to the Monday immediately following Black Friday, which marks the

beginning of the Christmas shopping season for online retailers. In recent years

Cyber Monday has become one of the busiest days for online retailers.

Data mining

Refers to the process of searching through data to find trends and patterns thatmight otherwise have gone unnoticed.

Data warehousing

Refers to the process of electronically storing customer and operations (salesand stock) data

Day time population

The population of a city during the day. Some cities which are district headquarters attract a lot of people in the day. These people are not residents but add

to the population during day time.


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Dead Areas

Awkward spaces in a store where normal displays cannot be set up and which

tend to attract low customer footfall.

Decentralised organization

Retail organisations which seeks to place decision making authority in thehands of managers close to geographically localized conditions.

Decline stage

The last stage of the product life cycle that occurs when the target market

shrinks, and price cutting minimizes profit margins

Delivery period

The time between when an order is placed and when the merchandise isavailable on the sales floor. Also known as lead time.

Demographic data

Data that documents facts about customers on matters relating to age, sex,family size, income, education, occupation and race.

Department store

A retail store that has a number of distinct product departments.

Depth

The number of choices/ options offered to customers within each brand or

product classification e.g. A shallow depth would refer to fewer options from

which to select.

Destination Store

A retail store where merchandise selection and presentation, pricing, or otherunique features act as a magnet for customers making the store their primary

shopping destination.

Discretionary pricing

A pricing strategy where the retail price of the product is decided by the price

that the product can command in the market.

DistributorA business intermediary who buys goods in bulk from the manufacturer and

sells them to the retailer in smaller quantities. Also known as a Wholesaler.

DIY (Do it yourself)

Refers to a category of product, mostly home related , which can be assembled

by the consumer.


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Doorbuster deals

A term used to refer to super attractive promotions normally discount offersthat are expected to get crowds into the store.

Down marketAppealing to low income consumers. Normally cheap, popular and of poorquality.

Drawer fund

The amount of money left in a drawer after the drawer has been closed. Thedrawer fund is typically used to provide startup money (change) for the next

business day. Also known as float.

Durables

Products (such as cars, furniture and appliances) that are capable of surviving

many uses and typically last for years

Early adopters

Those consumers who purchase fashion merchandise in the early stage of the

product life cycle.

EBO

Exclusive Business Outlet. This refers to a retail store that keeps only a single

brand e.g. a Levis exclusive showroom.

Economic Order Quantity ( EOQ)Size of an order at which the total procurement cost and inventory carrying cost

is the minimum.

EDI (Electronic Data Interchange)

Ability to electronically exchange purchasing information between your retail

software and the vendor's system.

EDLP (Every day Low Pricing)

A version of customary pricing, whereby a retailer strives to sell all of its goods

and services at consistently low prices throughout the selling season

End caps

The end pieces of display units typically used to display promotional items.

Entry level price point

The lowest price point in the range. Normally a strategic price point. Also

known as the lead in price point.


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Evening Economy

The economic benefits derived from the utilization of spaces uses within a towncentre that attract visitors in the evening for leisure and entertainment purposes,

such as cinemas, theatres, public houses, bars, restaurants, bingo, night clubs

and casinos.

Exception reporting

Reporting that only includes information not meeting established criteria. For

example, if you plan to sell between 2% and 5% of your inventory per week,

then exception reporting would allow you to report on sales outside your criterialimits (e.g., sales that fell below 2% or rose above 5%).

F.O.B (Free on board)

It is a method of expressing who is responsible for paying transportation

charges e.g. FOB factory would mean the retailer is paying the transportation

charges. Title passes to the buyer when the seller delivers goods to thetransportation carrier.

F.O.B. Factory

Factory Outlet

A manufacturer-owned store selling firms factory seconds, store discontinued

merchandise, canceled orders. Goods are normally available at an attractivediscount.

Fad

A short lived fashion

Fair Trade

Protects smaller and full services retailers against discounters by requiring

uniform retail prices. Fair trade is now banned in the United States.

FIFO (First in, First out)

A method of inventory control that assumes that the merchandise that was

received first is sold first e.g. if white shirts were received in two batches of

fifty pieces each, as per the FIFO method the first 50 pieces should be sold first.

First Moment of Truth

This is an expression introduced by Procter and Gamble. The First Moment ofTruth refers to the 3-7 seconds after a shopper first encounters a product on a

store shelf. This time lapse is called (by P&G) "first moment of truth" and it's

considered the most important marketing opportunity for a brand. It is in thesefew seconds, P&G contends, that marketers have the best chance of converting


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a browser into a buyer .

Flagship store

The leading store within a group, usually the biggest in size and stock holding

and used as a benchmark against which other stores are measured. Also used to

denote other similar stores within the group that meet this criteria.

Flea Market

A market that has many retail vendors offering a range of products at discount

prices in plain surroundings. Goods are often sold off pavements and small

shacks.

Float

The cash that is provided at the cash till every morning to conduct the daysbusiness. It normally includes a predetermined mix of currency denomination to

ensure that the cashier has sufficient change to return to the customer through

the day.

Floor price

The minimum price below which a product should not be priced

Floor ready Merchandise

Items that are received at the store in condition to be put right on display with

no preparation by retail workers.

FMCG ( Fast Moving consumer Goods)

This is a classification that refers to wide range of frequently purchasedconsumer products including: toiletries, soaps, cosmetics, teeth cleaning

products, shaving products, detergents, bulbs, batteries.

Footfall

The number of people walking into a store

Fourway rack

Floor fixture which has 4 racks. Often used for trouser displays.

Franchising

A contractual arrangement between two parties the franchisor (normally abrand owner or manufacturer) and the franchisee ( normally a store owner or a

licensee of the brand) , that allows the franchisee to conduct business under the

brand name and according to norms of business as set by the brand.


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Free flow

Series of circular, octagonal, oval shaped fixture patterns. The aislesdeliberately lack uniformity. Popular for up-market stores.

Free trade agreement

An agreement between countries to eliminate tariffs on merchandise beingtraded

Free-Standing store

A retail location that is independent of any shopping center e.g. Shoppers Stopat Andheri (Mumbai) is a free standing store.

Frequent Shopper Program (Customer Loyalty Program)

Program designed to reward customers for their continued business. It isdesigned to promote loyalty, increase visitation, and encourage future

purchases. Rewards may be in the form of discounts, awards, or other perks.

Full Line Discount storeA type of department store characterized by (1) a broad merchandise assortment

(2) merchandise normally sold via self service with minimal assistance (3)

private brand durable and non-durable goods (4) hard goods accounting for 60per cent of merchandise sold (5) a relatively inexpensive building, equipment

and fixtures.

Full price sell through %The amount of goods the company has sold or plans to sell at full price as a

percentage of the total buy.

Fusion clothing:A mix of Indian and western clothing.

Generics

Basic merchandise. Normally unbranded e.g. unbranded salt or sugar etc.

Geographic departmentalization

Refers to an organizational structure based on geographic areas (e.g. a retailer

having a north, south, east and west division, each headed by a senior manager)

GMROI (Gross Margin Return On Investment)

GMROI is a key retail performance indicator. It is a numerical indicator of the


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companys return on its investment for an item or group of items and is

calculated as follows

Gondola

A center of Floor fixture that allows for flexible display.

Gray Market Goods

Generally well known branded products that are sold through unofficial

channels in foreign markets. They are often sold by unauthorized dealers at

prices that are determined locally.

Grid Layout

A rectangular arrangement of fixtures and aisles in a more or less repetitive

pattern. Secondary aisles run at right angels to the main aisles and each aisle isusually of the same width for the entire length. Popular for supermarket and

discount formats.

Gross Area

Total area of a store including external space like verandahs and internal

spaces like staircase etc. The total area for which rent is being paid.

Gross profit (margin)

The difference between an item's retail price and its cost.

Growth Stage

The stage in the product life cycle where innovators have recommended the

purchase of a new product to their friends, causing increased sales and productvariations

Haat

A weekly village fair in India with temporarily set up stores normally spread on

the ground, with each seller retailing diverse product offerings.

Hang tag

A hanging price tag used for apparel and similar merchandise to describe the

product or to give information about the company.

Hard linesRefers to merchandise lines like hardware, sporting goods, appliances, furniture,

lawn and garden basically all merchandise carried by a store with the

exception of apparel and accessories and fashions for the home

Haute couture

Haute Couture is a French phrase for high fashion. Couture means dressmaking,sewing, or needlework and haute means elegant or high, so the two combined


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imply excellent artistry with the fashioning of garments. In modern France,

haute couture is a "protected name" that can be used only by firms that meet

certain well-defined standards. However, the term is also used loosely todescribe all high-fashion custom-fitted clothing, whether it is produced in Paris

or in other fashion capitals such as Milan, London etc. Haute couture is made to

order for a specific customer, and it is usually made from high-quality,expensive fabric and sewn with extreme attention to detail and finish, often

using time-consuming, hand-executed techniques.

High street

A popular shopping area characterized by high rentals and premium brands e.g.

Linking Road in Mumbai or Commercial Street in Bangalore.

Hub and spoke

A store expansion strategy which requires setting up of flagship stores or hubs

in key markets and then expanding to smaller markets in neighboring areas.

Hypermarkets

Mega supermarkets and general merchandise stores that stock everything from

food to appliances

Impulse product

Occurs when consumers purchased products and or brands they had not planned

to buy before entering a store as a result of some stimulus at the store e.g. anattractive product display.

Independent stores

Refers to a single store, which is not part of any chain. The bulk of stores inIndia fall in this category.

Introduction stage

The stage in the product life cycle that occurs when products are usually

accepted by only a few people

Inventory

Merchandise on-hand for sale to customers in the ordinary course of business.

Also called Stock.

Just In Time Inventory

A computerized method of tracking inventory needs and writing purchase

orders timed so that inventory arrives only on the day it is needed.


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Keystone Markup

A markup equal to the cost of the merchandise. Retail price is determined by

doubling the cost of an item.

Kirana Stores

A small Indian neighborhood mom- and pop store dealing with basis groceryand top-up convenience products, offering personalized service. It is small, hasaverage to above average prices and average atmosphere and customer services.

Laggards

Consumers who accept a style when it is in the decline stage of the product life

cycle.

Landed cost

The importers final cost for foreign merchandise, which includes themerchandise cost, duties and tariffs, commissions, insurance, storage expenses,and transportation charges

Lead in price point

The lowest price point in the range. Normally a strategically decided price

point.

Lead Time

The time span from the date an order is placed by a retailer to the date

merchandise is ready for sale (received, price marked, and put on the selling

floor)

Licensed Brands

Brands for which the licensor ( owner of a well known name) enters into a

contract with a licensee ( a retailer or a third party) The license eithermanufacturers or contracts with a manufacturer to produce the licensed product

and pays a royalty to the licensor.

Lifetime value

The potential of a customer to give business over his/ her lifetime. E.g. if a

person spends Rs 10,000 a year on shirts then over his active shopping lifetime(assuming it to be 40 adult years) he will spend 400,000/-.

LIFO

Last in First out method of inventory control that assumes the merchandise that

was received last was sold first

Line item


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A single item on a Purchase order or a range plan.

List Price

A retail level price generally set by manufacturers

Lock in periodWhen referring to real estate transactions, the lock in period refers to a periodduring which the tenant and the landlord are committed to the terms of the

contract. This is the minimum period for which the transaction is valid. Any exit

clause is applicable only after this period. Vacating the space before the

stipulated lock-in period means forfeiture of deposit, and in some cases apenalty, depending on the contract drawn up by the two sides.

Logistics

The total process of moving goods from manufacturer to a customer in the most

timely and cost efficient manner possible

Loss leader

A pricing strategy where a particular item is sold below cost in an effort to

stimulate other, more profitable sales. For example, during the Thanksgiving

season, turkeys are frequently sold at pennies per pound in the hopes that thegrocery store will profit from other groceries purchased at the same time.

Loss leader

A pricing technique that involves pricing a product below cost in order togenerate store traffic.

Loyalty programs

Promotion programs run by retail chains where customers are given tangiblerewards for patronizing a store. The higher the patronage the greater the reward.

Made ups

Refers to the line of home textiles that includes linen, tapestry, curtains etc.

Also known as soft furnishings.

Mall

A shopping mall or shopping centre is a building or set of buildings that containa variety of retail units, with interconnecting walkways enabling visitors to

easily walk from unit to unit. In a sense it is an enclosed market.

Mandi

A whole sale market for fruits and vegetables in India

Mapping


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A technique to evaluate the trading area of store by determining the distance

people are likely to travel to get to the store, the population density of the

geographic area surrounding the store, and the travel patterns and times fromvarious locations

MarginThe difference between the cost of an item and its price E.g. if cost of goods isRs 100/ and the retail price of Rs 150/- then the rupee margin is Rs 50/-

Margin percentage

The gross profit or margin expressed as a percentage of the retail price. E.g. ifcost of goods is Rs 100/ and the retail price of Rs 150/- then the rupee margin is

Rs 50/- and the margin percentage is 50%. This is also known as mark up % on

retail.

Markdown

A reduction in the original retail price, primarily taken for clearance of end ofseason merchandise or for promotional reasons.

Markdown percentage

A control tool used by buyers. It is calculated by dividing total Rupeemarkdowns by total sales. E.g. if total Rupee markdown is Rs 100,000 and

Total sale is Rs 10,00,000 then the Markdown percentage is 10%

Market Skimming

A pricing strategy wherein a firm charges premium prices and attracts

customers less concerned with price than service assortment and status.

Markup

The amount of money added to the cost of goods to calculate retail price. E.g. if

cost of goods is Rs 100/ and you add Rs 50/- to this to arrive at the retail price

of Rs 150/- then the mark up is Rs 50/-

Markup Percentage

The Rupee mark up expressed as a percentage of the cost price. E.g. if cost of

goods is Rs 100/ and you add Rs 50/- to this to arrive at the retail price of Rs150/- then the mark up is Rs 50/- and the mark up percentage is 50%.

Marquee

A sign used to display a stores name and or logo

Maximum Retail Price (MRP)

The selling price marked on the product, inclusive of taxes payable by the end

customer. This is a terminology used in India. As per statutory regulation allpackaged goods in India must have a marked MRP. Retailers are permitted to


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sell below MRP but not above.

MBO

Multi Brand Outlet. This refers to a retail store that keeps multiple brands e.g.

Shoppers Stop.

Merchandise Mix

The types or mix of products that are available for customers to purchase.

Minimum order

The smallest sale permitted by a manufacturer or wholesaler (vendor).

MIS (Management Information System)

MIS is a planned system of collecting, storing and disseminating data in theform of information and reports needed to carry out the functions of

management.

Mix and match

Normally used for the salwaar, kameez and dupatta category. These are the

three elements of a popular Indian dress form where each piece is sold

separately and customers can put the ensemble together as they like.

Model Stock Plan

The planned composition of fashion goods, which reflects the mix of

merchandise available based on expected sales. The model stock plan indicatesproduct lines, colors and size distributions. It is the ideal stock plan.

Mom and pop stores

Independent stores that are owned and run by the family unit ( by mom andpop). The bulk of the stores in India fall in this category.

Moment Of Truth

This is a customer service concept coined by Jan Carlzon former Chairman ofScandinavian Airlines. It refers to all the points of contact or interaction

between a customer and a firm that gives the customer an opportunity to form

or change their impression about the firm e.g. a customers impression about aretailer is affected by the advertising they see, by the store, by the sales staff,

the cashier etc. A customer may be satisfied by the entire experience but if (s)heis made to stand in a billing queue for 20 minutes, that one moment of truth iscapable of spoiling the entire experience. (Also see First Moment of Truth)

MRTP (Monopolies and Restrictive Trade Practic

An act introduced by the Govt. of India to protect the consumer by preventingthe formation of cartels and monopolies and by investigating and ruling against

unfair trade practices.


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Mystery Shoppers

People hired by retailers to pose as customers and observe their operations fromsales presentations to how well displays are maintained to in home service calls.

Narrow and deep

Refers to a product merchandising approach of stocking large amounts of a few

product categories or brands.

Net sales

The revenues received by a retailer during a given time period after deducting

customers returns, markdowns , and employee discounts.

Niche

A clearly identifiable segment of a larger consumer market e.g. within the kids

wear category pre-teens is a niche that has not been explored.

Non Selling area

All floor space used in supporting activity including stock rooms , cash office ,

entrances, show windows, elevators , offices , generator rooms , alteration

spaces.

Non-durables

Products that are used up in a few uses e.g. soaps, shampoos

Number of weeks coverThe number of weeks of current sales represented by the current stock e.g. if the

current sales is Rs 1 lac per week and the current stock is Rs 12 lac then the

store is carrying 12 weeks of stock.

Obsolescence

The outmoding of a product due to a change in fashion/ technology before its

usefulness has been exhausted.

Off price chain

Stores that sell branded apparel and accessories, footwear etc and sell them at adiscounted or everyday low prices in an efficient, limited services environment.

Occurs when retailers purchase manufacturers overruns at deep discounts forthe purpose of offering consumers low prices on branded merchandise

Open to Buy

The difference between the planned purchases and purchase commitmentsalready made by a buyer for a given time period, often a month. It is what the


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buyer has left to spend at any point in a month

Opportunity Costs

Benefits that are given up by choosing one type of opportunity over another e.g.

If an individual puts money in a business then the opportunity cost he incurs is

the interest that the money would earn if he put it in a bank instead.

Organization Chart or Organogram

A graphically display of the reporting relationships within a firm

Over stored Trading Area

A geographic area with so many stores selling a specific good or service that

some retailers will be unable to earn an adequate profit

Overage

The amount by which a physical inventory exceeds book inventory or the

amount by which the actual drawer amount exceeds the reconciled amount at

the time the drawer is closed.

Overbought

The condition where a buyer has committed to purchases exceeding the planned

purchase allotment for a merchandising period

Packing Slip

A slip that accompanies each carton of goods in a shipment and that gives the

list of products and quantities of each product in the carton.

Penetration pricing

A pricing strategy that uses low profit margins to generate greater sales; usually

used to quickly gain market share.

Per sq ft per day (PSFPD)

This refers to sales per sq. ft. per day. It refers to the sales achieved on a per

foot basis everyday. Also see Sales Per Foot (SPF).

Periodic inventory

A method of determining the value of retail merchandise at periodic intervals byperforming a physical count of the items in stock.

Perpetual inventory control

A method of inventory control in which the number of units and the total value

of inventory can be obtained at any time from the stock records. In this methodall additions (purchases) and withdrawals (sales) are recorded as they occur, in

order to provide a running stock balance. Physical verification of the same is


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done by counting a certain number of items on a regular basis (daily, weekly or

monthly) so that, by the year end, every item has been physically counted at

least once. If there is any mismatch (due to human error, leakage, pilferage,loss) between the physical quantity and the quantity shown in the inventory

records, the records are adjusted accordingly.

Picking ticket

A list of items used at the warehouse for physically gathering items for

shipment. Picking tickets typically include item and customer information,

where the item is physically located (the bin), quantity ordered, and a place towrite the actual quantity of the item being shipped.

Pilferage

Theft in a store. This could be theft by consumers or by staff.

Pilferage

Theft. Goods that go missing because they are stolen.

Planogram

A planogram is a visual plan showing the physical allocation of products within

a Store.

Point of Purchase (POP)

The physical location at which goods or services are sold to customers. Also

called point of purchase. Also called Point of Sale.

Point of Sale (POS)The physical location at which goods or services are sold to customers. Also

called Point of Purchase.

Post-Purchase Dissonance

A condition of conflict or anxiety post making a purchase. This could be as a

result of inconsistency between one's beliefs and one's actions e.g. being againstthe slaughter of animals and buying a snakeskin bag, or on account of feeling

that one has made an incorrect decision e.g. the product was beyond the budget.

Predatory Pricing

Involves big retailers that attempt to destroy competition by selling goods andservice at extremely low prices, which causes small retailers to go out of

business.

Prestige pricing

A pricing strategy that assumes consumers will not buy goods and services at

prices deemed too low, since they may fear it is of poor quality


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Price Club

A price club is a retail store, usually selling a wide variety of merchandise, in

which customers pay annual membership fees in order to shop. The clubs areable to keep prices low due to the no-frills format of the stores. In addition,

customers are required to buy large, wholesale quantities of the store's products,

which makes these clubs attractive to both bargain hunters and small businessowners.

Also known as a cash and carry store.

Price Elasticity of demand

The relation between the change that is likely to happen to demand for a

product as the price changes. Relates to the sensitivity of buyers to price

changes in terms of the quantities they will purchase. A high price elasticitywould indicate that a small increase in price will lead to a relatively larger fall

in demand.

Price Line

A price point that is selected by a company for its business. Different price lines

are chosen to appeal to target customers. Stores carry product only at these

selected price points.

Price Range

The width of price points that a store carries from the lowest or lead in price

point to the highest price point e.g. a store may have a price range for t/shirtsstarting at Rs 199/- and ending at Rs 699/-.

Price war

A situation in a very competitive environment when one retailer attempts tounder price another, and results in retailers continuing to lower prices in turn to

undercut the other. Increased sales may result, but usually at the expenses of

profits.

Private label

Merchandise that is developed by retailers under their own labels .

Product life Cycle

A graphic representation of the expected behavior of a good or service over its

life. The traditional cycle has four stages introduction , growth maturity and

decline ( picture ?)

Product line

A board category of products that have similar characteristics and uses e.g.

Trousers or shirts.


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Profit center

A distinct area within your company for which sales, expenses, and profits canbe calculated separately from the total sales and expenses of the whole company

e.g. each department in a retail store may be treated as a separate profit center.

Promotional calendar

A calendar that shows the promotions planned over a given period. The

promotion calendar is normally made well in advance for the whole financial

year. This allows all the departments concerned Store operations,

Merchandising and Buying and Marketing to plan efficiently.

Promotional mix

Different promotional methods that include advertising, visual merchandising,personal selling, publicity, special events, and other sales promotional activities

Proof of Delivery

Verification provided by a freight company that a shipment was delivered at acertain time and place and was signed for by the recipient

Psychographic data

Information on the lifestyles, interests, and opinions of consumers

Psychological Obsolescence

The loss of value or usefulness resulting from advances in technology and the

passage of time. e.g. changes in fashion makes us change our clothes even if

they are not worn out , but in our minds they are no longer wearable.

Psychological Pricing

A pricing strategy that takes into account consumers perceptions of the retailprices e.g. prices are often set before the hundred mark. The assumption is that

consumers will perceive a price point of Rs 199/- as significantly lesser than a

price point of Rs 200/-.

Purchase order (PO)

A record containing the details of an order for merchandise that has been placed

with a vendor. Typically, the PO includes the items purchased, costs, discount

terms, and shipping information.

Quantity discount

A reduction in price offered on the purchase of large volumes of product.

Quick Response (QR)


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Enables a retailer to reduce the amount of inventory it keeps on hand by

ordering more frequently and in lower quantity.

Rack jobber

Special type of vendor who is assigned shelf space in a store with the

responsibility for keeping it stocked with quick-turning merchandise

Range plan

A seasonal plan that has an item wise list of the lines to be ordered, along with

the quantities , costs and margins.

Rate of sale

The number of pieces selling per option per outlet per week for all outlets

stocking the option e.g Rate of sale for a white, full sleeve shirt with buttondown collar that sold 450 pcs across 10 stores over 15 weeks will be 3 i.e 3 pcs

sold per week per store for this option.

ReachRefers to the number of people who will be exposed to one or more promotional

messages

ReductionsAll changes in prices that lower the value. It includes markdowns, employee

and consumers discounts and inventory shortages

Reorder Point

The stock level at which new orders must be placed

Retail Chain

A firm that consists of multiple retail units under common ownership andusually has some centralization of decision making.

Retail Life CycleA theory asserting that institutions like the goods and services they sell pass

through identifiable cycles with four stages innovation, accelerated

development, maturity and decline

Retail MerchandisingThe science of offering the right goods to ultimate customers at the right price,

at the right location, and at the right time.

Retail Mix

The mix of variables which form the overall retailing strategy. including

location, merchandise, communications, price, services, physical attributes andpersonnel,


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Retail POS System (Retail Point of Sale System)

A computerized system made up of retail software and point of sale hardware. Itis used for billing and for recording transactional data.

ROIReturns on Investment = (annual profit)/(investment capital) . This is a financialcalculation and refers to the ratio of money gained or lost on an investment

relative to the amount of money invested. ROI is usually given as a percent and

calculated on an annual basis. It is used to compare returns on investments. For

instance, a Rs 1,000 investment that earns Rs 50 in interest generates more cashthan a Rs 100 investment that earns Rs 20 in interest, but the Rs 100 investment

earns a higher return on investment.

Rs 50/Rs 1,000 = 5% ROIRs 20/Rs 100 = 20% ROI

Rotating stockA method of moving stock around on the shop floor to ensure that new and oldmerchandise is alternately given an opportunity for display .

Safety Stock

The extra inventory kept on hand to protect against out of stock conditions dueto unexpected demand and delays in delivery

Sale leaseback

The practice of retailers building new stores and selling them to real estateinvestors, who lease the property back to the retailers on a long term basis

Sales Channel

A distribution route e.g. a brand can choose to sell its products through multiple

channels including own stores, department stores, distributors etc.

Sales forecast

A prediction of future sales for a specified period under a proposed marketing

plan

Sales per square foot (SPF)

Net sales divided by the square feet of retail selling space. It can be calculated

on a daily, weekly, monthly or annual basis. It is calculated as sales/ square feet

of space. E.g. if a 1000 sq ft stores does a daily sale of Rs 30,000/- then thedaily SPF is Rs 30/-.

Same store sales


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A comparative measure used to compare sales of stores that have been open for

more than one year. This allows us to compare the business growth that has

taken place in the existing stores from one year to another.

Seasonal merchandise

Merchandise purchased for a specific season that is only in demand for a shortperiod of time (e.g., summer, Christmas, back to school, etc.).

SEC

Socio Economic Classification. A method of classifying the target audience on

the parameters of education and occupation only. Under this method ofclassification SEC A normally refers to the well heeled , while SEC D and E

refer to the less prosperous and less educated members of society.

Seconds

Merchandise that contains defects or damages.

Selling area

Total area used in selling including display area, customer aisles , fitting rooms,

and billing area .

Shelf talkers

Part of the signage used to announce the offers/prices/product features etc.

usually placed on fixtures near the products for which it is applicable

Shop floor

The selling area in a retail store

Shop in shop

A pre-determined area within a store that is given to a brand normally onconsignment terms. The area is managed and branded by the brand.

Shoplifting

The act of stealing merchandise normally by people posing as customers -

from a store that is open for business.

Shrinkage

The difference between actual stock and book records of stock. Shrinkagerepresents the total of errors in stock record keeping, plus actual losses of

merchandise through shoplifting, employee theft, paperwork errors, breakage,

etc.

Skimming

A pricing strategy that aims when stores charge the highest price possible. Theyare willing to make do with lower sales since the profit margin on each item is


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high.

Soft furnishingsRefers to the line of home textiles that includes linen, tapestry, curtains etc.

Also known as made ups.

Soft GoodsApparel and linens are collectively termed as soft goods.

Specialty Department Store

A department store format that focuses on apparel and soft home goods ( e.g.Westside)

Specialty Store

A retailer that concentrates on selling one product or service line. In otherwords, a store specializing in one category of merchandise, frequently fashion-

related e.g. Van Heusen stores are mens wear specialty stores.

Stock to sales ratioA figure that indicates the relationship between planned sales and the amount of

inventory required to produce those sales. Specifically it is the ratio between the

beginning of month stock figure and the planned sales for the same month.

Stock Keeping unit (SKU)

Refers to a unique product description. E.g. For mens shirts a SKU would

represent a unique size / style / color combination - a white men's shirt with

french cuffs and a size 40 neck in half sleeve. All items that fit this descriptionwill come under the same SKU.

Stock TurnoverRepresents the number of times during a specific period usually one year that

the average inventory on hand is sold. Stock turnover can be computed in units

or rupees. It is normally calculated on an annualized basis as Sales/ Averagestock. E.g. if sales for a year are Rs 12 lacs and the average stock carried by the

store was Rs 4 lacs then the stock turnover achieved was 3. It means that the

retailers sells merchandise at a rate that requires him to replace it three times peryear.

Store directory

A form of store signage that lists and indicates the location of all departments ina store . Normally put at the store entrance and at key vantage points.

Store front

The total physical exterior of a store. It includes the marquee, entrances ,windows , lighting and construction materials


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Store layout

The spatial arrangement of selling and non-selling departments, aisles, fixtures,display facilities and equipment in the proper relationship to each other and the

fixed elements of the structure.

String Store MarketAn unplanned shopping area comprising a group of retail stores, often with

similar or compatible product lines, located along a street or highway

Super SaturdayAn American term used for the Saturday that comes before Christmas. It is

normally a bumper day for retail sales.

Super specialty storeA store that is very highly specialized in a particular kind of product e.g. The

T/shirt store

SupermarketA retail store which sells groceries, dairy products, meats and produce along

with some non food items

Supply chain

Supply Chain refers to the distribution channel of a product, from its sourcing,

to its delivery to the end consumer (also known as the value chain). The supply

chain is typically comprised of multiple companies.

Tag /ticket/ swing ticket

A physical label attached to merchandise for sale. Normally carried information

on the product or the company and carries the bar code and the priceinformation.

Target market

The specific group or groups of consumers on which a retailer focuses its

marketing activities

Tariff

Tax on goods coming into a country

Tearsheet

Sheets of magazines that are torn to be used later. Designers for instancemaintain tear sheets of fashion styles to use them as references when planning

the new seasons lines.


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Terms of sale

Arrangements between merchandise source and retailer relative to time periodfor payment of invoice.

Ticket SizeThis refers to the value of the bill e.g. if you have bought two items worth Rs1000/- each then the value of the bill or the ticket size is Rs 2000/-

Ticket Value

The value of a single bill

Top- down planning

Involves the top level of management estimating total sales for the upcoming

period in a particular product category

Total mark up

The total mark up that is achieved across all products in the category.

Trade Diversion

The loss of trade from an existing store or centre as a result of a new retail

development taking place, usually measured as a percentage of its turnoverbefore the opening of the new development.

Trading Area

The geographic area from where a store gets the bulk of its customers.

Trading down (down trading)

Refers to the act of replacing current purchases with items that may have less

features/ poorer quality but are less expensive. In periods of high inflation,customers tend to trade down to manage their household budgets.

Trading up

This refers to the act of replacing current purchases with items that have more/better features and are consequently more expensive. In periods of prosperity

customers tend to trade up to enjoy a better product experience.

Traffic

Refers to the people in an area or those walking into a store. A high traffic store

is one which sees a lot of walk ins.

Trunk show

Retail events where suppliers present their merchandise directly to the final

customer. Designer Trunk shows are a popular retail event. The designer is


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normally present at the store at the time and interacts directly with the final

customer.

Up market

Appealing to high income consumers

UPC (Universal Product Code)The standard for encoding a set of lines and spaces (or barcodes) that can be

scanned and interpreted by retail software to identify a product.

Variety Store

A retail establishment selling a wide assortment of inexpensive and popularly

priced goods and services , such as stationery, gift items, womens accessories,

health and beauty aids , light hardware, toys, house wares, and confectionary

items.

Vendor

An individual or organization from which a retailer purchases merchandise forresale. Also called a supplier.

Visual merchandising

A display arrangement including the layout of store facilities and the placementof merchandise in the store to attract the consumers attention and stimulate

customers desire.

Want book

A note book in which store employees record items desired by customers but un

stocked or out of stock

Warehouse Store

A warehouse store is a large format retailer with an every-day-low-price cum

discount offer in a no frills setting. The basic shed-like environment lends it the

name warehouse retailer e.g. Wal-mart.

Waterfalls

Wall mounted display fixtures which are sloping.

Wheel of Retailing


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A theory stating that retail innovators often first appear as low-price operators

with a low-cost structure and low profit margin requirements. Over time these

innovators upgrade the products they carry and improve store facilities andcustomer services. They then become vulnerable to new discounters with lower

cost structures.

White goods

Refers to a category of products typically large household appliances, as

ovens and refrigerators, formerly finished with white enamel, but now often

colored.

Wholesaler

A business intermediary who buys goods in bulk from the manufacturer and re-

sells them to the retailer in smaller quantities. Also known as a Distributor.

Width of Assortment

Refers to the number of distinct goods/service categories which a retailercarries.

Word of Mouth Communication

Refers to the passing of information by verbal means, especiallyrecommendations, but also general information, in an informal, person-to-

person manner. Word of mouth is typically considered a face-to-face spoken

communication, although phone conversations web dialogue, such as online

profile pages, blog posts, message board etc. are now included in the definitionof word of mouth.

Year To Date (YTD)

A term used to describe the performance of a business so far in the business

year. For example if a company works a Jan- Dec year , the sales of a company

are Rs 60 lacs in the period Jan to May then the YTD sales as of June 1 are Rs60 lacs.

Zero Based Budgeting

The practice followed when a firm starts each new budget from scratch and

outlines the expenditures needed to reach its goals during that period. All costs

must be justified each time a budget is done

reatil dictionary

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