150 Retail Terms You Must Know

150 Terms Every Retailer Must Know
Our retail dictionary can help you navigate all of the lingoes you’re
hearing day-to-day and keep you up to date with the latest trends.
1 Anchor store
One of the largest — if not the largest — retail stores in a shopping

center or mall. This department store or grocery store helps drive
foot tra c, making it a great neighbor for smaller retailers. Also
known as a draw tenant, anchor tenant, or key tenant.
2 Arrivals
Customers who physically arrive and check Into an appointment

booking/queue system such as Gnats or Oudlnl solution as
examples. Often used in service-based environments such as
technology stores but could also play Into areas such as Kitchen
planning, personal shopper sessions.
3 ATS
This is the acronym for average transaction size or the average

amount spent by a customer in a single transaction or purchase. It
is calculated by dividing the total dollar value of sales during a
given time by the number of transactions during that time. This
metric is a valuable way to determine whether the size of your sales
is growing — ideally, you want increasingly larger sales over time.

4 ATV
This stands for average transaction value. Like ATS, this is the
average amount customers spend every time they make a
purchase.
5 Augmented reality (AR)
This principle is about supplementing the user’s physical world with

virtual things, so they appear to be in the same environment. In
retail, it can be used in shoppable catalogs, apps that let you see
in-store deals by using your phone’s camera, virtual tting rooms,
and more.
6 Back of House Retail
Term used to distinguish the area of retail the customer does not
see, where activities such as stock retrieval, cashing up etc are
performed.
7 Backorder
When a speci c quantity of an item could not be lled by the

requested date, it’s on backorder.

8 Balanced Tenancy
A retail area, like a mall or shopping center, which is carefully

planned to have a complementary mix of stores. It’s the equivalent
of a one-stop-shop for malls.
9 Bar code
A machine-readable code, which has alternating dark and light

bars. The spacing between the bars signals to the reader what the
numerical code is. Bar codes can be a universal product code
(UPC) or any other numerical format. Bar codes help you track
inventory going in and out of the store.
10 Beacons
Used by more tech-advanced retailers, beacons can send

messages through Bluetooth to nearby activated devices. This
allows retailers to interact and communicate with shoppers on yet
another level. For instance, one could send a customer a greeting
message when they are within a certain distance of the store.
They can also be used to measure store performance, such as foot
tra c and the average time spent in the store.

11 Big data
This refers to a massive data set that is so large you would need a
sophisticated program — or a data scientist — to make sense of it.
When you’re looking at big data, you’re looking to analyze
customer behaviors, demographics, social information, and more.
12 Big-box store
As the name says, this is a large store that’s usually part of a major
retail chain. Target and Best Buy are big-box stores.
13 Brand Awareness
This measures the average consumer’s overall knowledge of a

certain brand. Great branding becomes more imperative each
year.
14 Brick and click
This term is used for retailers that integrate their e-commerce site
and their traditional brick-and-mortar stores. When the two are
integrated, it allows you to provide seamless web-to-store
services, like “buy online pick up in-store” and buy online return
in-store.

15 Brick and Mortar
This term has become more commonly used to distinguish online

merchants from those with a physical location. Thought
eCommerce continues to explode, most consumers still prefer
shopping at a brick and mortar store.
16 Bulk
The classic de nition refers to distributing raw materials (such as

coal, iron, and grains) that are stored and transported in large
quantities. The term may have a variety of de nitions based on
industry. It could mean buying a large quantity of a single items or
it could refer to the storage area for pallets.
17 Bundled Pricing
A type of promotional technique, bundled pricing groups various

products together into a single discounted price. There are
endless variations on how to structure this. It’s most useful to
increase the average spend or to run through a certain product’s
stock.

18 Bundled pricing
Companies that bundle together a package of goods or services

to sell for a lower price than they would charge if the customer
bought all of those goods or services separately.
19 Buy Online Pickup in Store
Also referred to as Click & Collect, or, BOPIS, this is a tool that helps
alleviate long lines, especially around the holidays. More and
more consumers are using it to save time in the store as well, and
it’s highly recommended that every retailer has both an online and
in-person presence.
20 Cannibalization
Not as gruesome as it typically means, retail cannibalization

occurs when a retailer introduces a new product that ruins the
sale of an existing one. You want to develop new products that ll
a void or complement existing products, not replace them.

21 Card le
According to PCI-compliance standards, unsecured card les are

generally a high-risk way to store and manage sensitive customer
information.
22 Card on File (CoF)
Ways to store customer payment information. This is the

equivalent of a house account. It rewards your regular customers
by creating a fast and easy checkout experience (whether they
are in person or not).
23 Carrying cost
This can also be referred to as a holding cost. It is primarily made

up of the cost associated with inventory investment and storage
costs.
24 Cashwrap
This is the main checkout area of a retail store, where retailers set
up their POS and customers pay for items. Sometimes cash wraps
have shelves with items that shoppers can pick up on their way
out.

25 Chargeback rebuttal letter
If a business wants to refute a chargeback, it might send a

chargeback rebuttal letter to persuade the customer to withdraw
the dispute. The letter would show evidence that the product was
in fact delivered or that the service requested was rendered.
26 Chargeback
A chargeback happens when a customer disputes a charge from

a business and asks the card issuer to reverse it. Credit card
chargebacks are meant to protect consumers from unauthorized
transactions, but they can mean lots of time and headaches for
businesses.
27 Click and collect
This omnichannel feature allows customers who buy an item

online to pick it up in the brick-and-mortar store; it’s also called
buy online pick up in-store, or BOPIS. Consumers love the ease
and convenience of this feature, which allows them to avoid
shipping costs and wait times.

28 Clienteling
This term characterizes activities retailers use to build

relationships with their customers. One of the most popular ways
to do this is to collect and track customer data with customer
relationship management (CRM) software that can then be used
to create customized communication and shopping experiences.
29 Cloud POS
A cloud POS is a web-based point-of-sale system that lets

you process payments through the internet, rather than on your
local computer or servers
30 Comp Store Sales
The measurement of productivity in revenue, comparing sales of

retail stores that have been open for a year or more, a pre-
eminent measure in retail but be careful without the context of
tra c and conversion rate metrics this can be misleading even
given its status as a KPI

31 Consignment merchandise
This is inventory that a retailer does not own or pay for until it’s
sold. In a consignment arrangement, goods are left by an owner
(consignor) in the possession of an agent (consignee) to sell them.
The consignor continues to own the merchandise until it’s sold.
Typically the agent, or consignee, receives a percentage of the
revenue from the sale.
32 Consumer packaged goods
This describes products that are in a form that is ready for sale to
the consumer. CPGs include non-durable goods like packaged
foods and beverages and other consumables. They are often sold
quickly and at a low cost.
33 Contactless payments
Contactless payments are powered by near eld

communication or NFC. NFC-enabled cards or smartphones
allow customers to pay for a purchase without touching the
payment terminal — they just need to wave or tap. Mobile
payments, like Apple Pay, are one of the more common types
of contactless payments.

34 Convenience products
These are consumer products that are routinely purchased by

customers, who usually give little thought or planning to them.
They often appeal to a large target market.
35 Conversions
A term used to describe the nalizing of a sale. This usually goes

in conjunction with “leads.” A lead is a prospective sale, while the
conversion is the actual sale.
36 Co-Operative
A business owned by a group of members instead of investors or

stockholders. Co-ops can come in a variety of forms and are
feasible in a variety of industries from retail to housing to health
care.
37 Cost of goods sold
The accounting term used to describe the total value (or cost) of
products sold during a given time period. Also referred to as
COGS, this appears on the pro t-and-loss statement and is used
for calculating inventory turnover.

38 CRM
Customer relationship management is an online system for

managing relationships with your current and prospective
customers, and stores a directory of their information online.
39 Cross merchandising
This refers to the retail practice of displaying products from

di erent categories together to create add-on sales. You’ve seen
this in a grocery store that puts soda, chips, dip — and all the other
foods you’d need for a barbecue — in one area during the
summer.
40 Cross-Merchandising
A strategy that groups di erent, unrelated products together to

encourage the sale of each or several of them together. It can
feature products that more naturally pair or can get creative and
have products that are more uniquely combined.
41 Customer Behavior
Understanding the way customers use stores – understanding

the customer experience in order to improve the store's
performance.

42 Customer-facing display
A customer-facing display (CFD) — also known as a customer

display or monitor — is usually a separate screen that allows
customers to view their order, tax, discounts, and loyalty
information during the checkout process. Because they can view
what you are ringing up, CFDs help reduce inaccuracies and
incorrect purchases, creating a better experience for your
customers.
43 DC
This is an acronym for a distribution center. A distribution center

is a warehouse or specialized building that stores a set of
products to be distributed to retailers (or directly to consumers).
44 Dead Stock
Also known as dead inventory, it’s how retailers classify products

that have never sold or have been in stock for a really long time.
Sometimes dead stock is the result of seasonality (people don’t
buy Christmas ornaments in May), while other times the stock just
isn’t in demand — ever. Also called dead inventory, this is one
thing no retailer wants to have. You can get rid of dead stock with
sales and promotions, or you can avoid it altogether with careful
analysis.

45 Depth of Assortment
Retailers must determine the number of styles and product

variations they will have in stock. It depends on how much capital
and inventory space you have. It’s important to measure historical
sales in order to determine the optimal depth of assortment levels.
46 Destination Retailer
Destination shops are those that consumers seek out speci cally
due to its selection, price, style, etc., often regardless of its
location.
47 Dog
This is a retail slang for products that aren’t selling. See Dead

Stock.

48 Drop Shipping
This refers to an arrangement between a retailer and a

manufacturer in which the retailer transfers customer orders to
the manufacturer, which then ships the products directly to the
consumer. When using a drop shipping method, the retailer
doesn’t keep the products in stock. The order and shipment
information is just passed on to the manufacturer. Sometimes
referred to as direct shipping.
49 Dry storage
Though dry storage can have other meanings in di erent

industries, in warehousing it is typically used to describe non-
refrigerated storage of food products, such as canned and dry
goods.
50 Durable goods
These are products that can be used daily, but have a long, useful
life expectancy. Examples are furniture, jewelry, and major
appliances, such as dishwashers.

51 Dwell Time
The amount of time spent in a location. Increasing customer dwell

time increases their propensity to spend in a location. Malls have
worked on this in recent years by increasing the number of food
and beverage locations, the same principles apply down to
individual zones in retail stores.
52 Dynamic Clustering
Similar to segmented email campaigns, this technique for

structuring sales is useful for retailers that have a varying
customer base. It allows you to cater to your products, pricing,
marketing, and inventory to certain locations, thereby appealing
to a wider audience.
53 Electronic Article Surveillance (EAS)
Similar to credit card processing, retail fraud prevention has to

continue to evolve to face new challenges. One common
technique uses tags and labels attached directly to the products.
These devices will trigger alarms if not removed by a cashier. The
technology is getting more subtle and cheaper, allowing more
retailers to take advantage.

54 EMV
EMV stands for Europay, Mastercard, Visa. The technology is the

global standard for credit cards that use computer chips to
authenticate (and secure) chip-card transactions. Because this
technology encrypts bank information, it’s much more secure than
magstripe cards (which hold static information about the
cardholders.
55 Endless aisle
This is a feature of a brick-and-mortar store that enables

customers to browse and shop a retailer’s entire catalog. But,
instead of stocking up on every item, the store can provide the
entire catalog through a touchscreen or tablet.
56 E-tailing
Short for electronic retailing, this is the practice of selling

products on the internet. E-tailers range from the very big, like
Zappos, to the small, like your local clothing boutique that also has
an online store.

57 Everyday low pricing (EDLP)
This is a pricing strategy that promises consumers a consistently

low price without comparison shopping or a sale.
58 Fast fashion
This is clothing that moves from the catwalk or fashion shows to

stores quickly. The clothes represent the most recent trends.
Stores like H&M and Zara have built their businesses on fast
fashion.
59 FIFO ( rst in rst out)
This is an inventory management cost strategy that assumes

the rst units of stock purchased are the rst ones that are sold,
regardless of whether or not they were. It’s a common way to
calculate the value of inventory: If you assume the rst inventory
in (the older inventory) is the rst out, then the cost of the older
inventory is assigned to the cost of goods sold and the cost of the
newer inventory is assigned to ending inventory. The cost of
goods sold is essential in evaluating inventory turnover and
determining the e ciency of your inventory management.

60 Flash sales
These are sales that are available for a limited time. The huge
discounts (we’re talking 50 percent o and up) entice consumers
to buy, and the limited time frame — usually anywhere from several
hours to a couple of days — forces them to act quickly. Some e-
tailers, like Gilt or Zulily, have built their entire business on ash
sales.
61 Footfall
Footfall is a measure of foot tra c in a retail store. An accurate

count of this coupled with over performance indicators can
contribute vital metrics, such as conversion rates and average
transaction values.
62 Forecast
An estimation of future demand for products or services.

Historical demand is used to calculate future demand, with
adjustments for seasonality and trends.

63 Franchise
This is a way that some businesses expand by distributing their

goods and services through a licensing relationship. In this
contractual relationship, a franchisor grants a license to a
franchisee to conduct business under the business’s name.
Usually, the franchisor speci es the products and services to be
o ered by the franchisee and provides an operating system, the
brand, and operational support. McDonald’s and Subway operate
through franchise systems.
64 Franchisor/Franchisee
The franchisor is the owner of the franchise, while the franchisee

is the purchaser or one or more locations of the franchise.
65 Front of House
Term used for customer-facing area, where roles such as sales

assisting, till operations, changing room attendance are carried
out. Typically moving more resources from the back of house to
the front of house is a good thing to achieve creating more
customer-facing time, which should result in more sales.

66 Green retailing
This refers to the environmentally friendly business practices that

retailers commit to. This can range from giving customers
reusable shopping bags to adding solar panels to supply
electricity to their stores.
67 Gross margin
The di erence between how much an item costs and what it sells
for. On a larger scale, it’s how much sales revenue a company
keeps after all the direct costs of making a product or performing
a service are accounted for. It’s also called gross pro t margin.
68 Hardlines/Softlines
These refer to the actual physical feel of goods. Hardlines are less
personal and often made of metal. Electronics, vehicles,
appliances, etc. are examples of hardlines. Softlines are soft
feeling and often can be worn or edible.
69 High-speed retail
This practice speeds up the customer’s shopping experience.

Drive-thrus, pop-up stores, and mobile businesses like food trucks
all t in this category.

70 Impulse purchase
Also called an impulse buy, this happens when a customer makes

an unplanned purchase of a product or service right before
checking out at the store. Some retailers set up small items around
their cash wrap to encourage this behavior (like a grocery store
that puts magazines and candy in the checkout lane).
71 Integrated Supply Chain
Consolidating processes into a single platform saves time. The

supply chain is no exception. Managing all relationships with
suppliers and distributors through a centralized system is a great
way to save time.
72 Inventory management
This is a system a retailer uses to make sure the right inventory is

in the right place, at the right time, and in the right quantity. As a
part of this, the retailer is making sure that ordering, shipping,
handling, and related costs are kept in check.

73 Inventory turnover
The average number of times that inventory on hand is sold or

used during a speci c time period. Most of the time, a high stock
turn is good — it means you’re selling a lot without stocking too
much. To calculate it, divide the cost of goods sold by the average
inventory.
74 Isolated Store
This type of retailer has a freestanding location, adjacent to no

other stores. It typically faces less competition, cheaper rent, and
more visibility. It might, however, be inconvenient to get to and
o er no variety for shoppers who visit.
75 Key Performance Indicators
KPIs help retail stores measure their overall success. Di erent

metrics are important to give a broad picture. Some of the most
important KPIs include gross margin, sell-through rate, year-over-
year sales, conversion rates, stock turnover, and product returns.

76 Keystone pricing
This is a method of selling merchandise for double its wholesale

price. It’s an easy way for retailers to cover costs and make a
reasonable pro t.
77 Layaway/lay-by
This is a service that allows the customer to put an item on hold

with a retailer until the item is paid for in full. The customer pays
installments on the product until it’s entirely paid o . While some
retailers o er this kind of program all year, it is commonly
advertised during the holidays. Layaway programs make it easier
for the consumer to a ord products and reduce nancial risk for
the retailer.
78 Leveraged buyout (LBO)
An LBO is the purchase of a company using borrowed funds (such

as loans from banks and investors). The purchaser uses the
company’s assets as collateral for the funding and its cash ow to
pay back whatever is owed.

79 LIFO (last in rst out)
This is a principle that assumes new merchandise sells before

older stock. It matches current sales with the current cost
structure.
80 Loss leader
A marketing tool for retailers, a loss leader is an item that’s sold

below cost, or at a loss, in an e ort to attract new customers.
Retailers that use loss leaders rely on the fact that once
customers are in the door, they buy other items that do turn a
pro t.
81 Loss Prevention
Loss prevention can be a variety of techniques retailers use to

combat lost product, whether it’s due to theft, spoilage, or
inventory mistakes. Theft alone accounted for nearly $50 billion in
lost revenue in 2017, so it’s important for all retailers.
82 Lot size
Also called order quantity, this is the quantity of an item you order
for delivery on a speci c date.

83 Markdown/markup
Markdown is the di erence between the original retail price and

the reduced price — it’s the devaluation of a product, usually
because it’s not selling at the original price. A markup is the
amount of money added to the wholesale price to obtain the retail
price.
84 Market Penetration
This metric measures the total amount of sales of a product for a

particular retailer against the total possible market for the
product. This might also be referred to as a market share. If your
product has large market penetration, you might be able to o er
the product at smaller margins, for instance. Knowing your market
penetration can also help determine advertising budgets or
target demographics.
85 Market Research
Research into a market is simply the study of what consumers

want and need. This can come in many di erent forms depending
on what type of good a retailer is selling.

86 Mass customization
This is a product that can be produced at a low cost in high

volume, but still provide each customer with a customized o ering.
Nike’s NIKEID is a prime example of a shoe that can be mass-
produced but in the speci c colors, a customer wants.
87 Merchandising
This is the way a product is displayed in your store that

encourages customers to purchase it. Merchandising includes
embellishments like price, packaging, o ers, coupons, and more.
88 Minimum advertised price
This is a supplier’s pricing policy that doesn’t permit resellers to

advertise prices below a speci c amount.
89 Missed Opportunity
Missed opportunity is the calculation of the No Shows (to an

appointment booking) x ATV.

90 Mobile payments
Mobile payments are regulated transactions that take place

digitally through your mobile device. They are enabled by near
eld communication (NFC). Popular mobile payment apps include
Apple Pay and Android Pay.
91 Model Stock Plan
The idea behind a model stock plan is to organize your inventory

with maximum and minimum levels for each product. In doing so,
you eliminate overstocking and ensure that you always have an
adequate amount on hand to sell.
92 Monthly sales index
A measure of seasonal sales that is calculated by dividing each

month’s actual sales by the average monthly sales, and then
multiplying results by 100. If the result is more than 100, that
means there’s been growth; if less than 100, there’s been a loss.

93 Multichannel retailing
Selling merchandise through more than one independently

managed channel, such as brick-and-mortar stores, catalogs, and
online. This is the precursor to omnichannel retail, which aims to
tie those channels together.
94 Mystery shopping
This is an activity where a market research company, watchdog

group, or even a retail owner sends in a decoy shopper to
evaluate the products or the customer service in a store. The
mystery shopper behaves like a regular customer (or performs
speci c tasks) and then provides feedback to help the store
improve its practices.
95 Near-Field Communication
More commonly referred to as NFC, this radio frequency

technology is used to facilitate secure communication for
contactless payments. The credit card machine is only capable of
communicating with one device at a time. And the communication
uses dynamic banking numbers, making the theft of the data
worthless.

96 Net pro t margin
This is the percentage of revenue left after expenses have been

deducted from sales. It’s a performance metric that shows how
much pro t a business gets from its total sales. It’s calculated by
dividing net pro t by net sales.
97 Net pro t
The actual pro t after working expenses have been paid. It’s
calculated by subtracting retail operating expenses from gross
pro t.
98 Net sales
This is the revenue a retailer makes during a speci c time period,

after deducting customer returns, markdowns, and employee
discounts.
99 Never-Out List
A marketing term, a never-out list contains the retailer’s

bestselling products. The model stock plan is in place to ensure
that no products are out of stock. This list is an additional bu er
for those products that the retailer cannot a ord to be o the
shelves.

100 Niche retailing
The practice of selling only to a speci c market segment. A niche

retailer specializes in a speci c type of product or a set of related
products. Warby Parker is a niche retailer specializing in
eyewear. But your local pet store is also a niche retailer, despite
o ering a wide range of products.
101 Obsolete inventory
This refers to products that have no sales or aren’t used during a

set period of time (it could be weeks or years, depending on the
retailer). See Dead Stock.
102 O -price
This is merchandise purchased for less than the regular price.

Selling o -price merchandise can be a great way to get
customers to your store. There are some retailers that only sell
o -price merchandise, like Nordstrom Rack, which sells designer
merchandise at drastically discounted prices. (Its parent
company, Nordstrom, attributes some of the company’s
overall growth to its o -price retailer.)

103 Omnichannel marketing
Omnichannel marketing aims to create a seamless experience

across all of a brand’s marketing channels. This is di erent from
multichannel marketing. Most retailers already have
multichannel marketing; they use a website, social media, email,
and other channels to push out brand messages, promotions,
etc. Where omnichannel di ers is that it takes into account how
consumers interact with all of those channels and how they
move from one to another; omnichannel marketing is all about
connecting the dots between the channels. The goal is to keep
customers moving around within the brand ecosystem, with each
channel working in harmony to nurture more sales and
engagement. An omnichannel marketing strategy may include
things like cross-channel loyalty programs, in-store pickup,
smartphone apps to compare prices or download coupons, and
interactive in-store digital lookbooks, in addition to more
traditional channels.
104 One-Stop-Shop
As the name suggests, one-stop shops o er a wide variety of

products in hopes of attracting more shoppers. This is the exact
opposite approach from niche retailing.

105 Order lead time
The number of days from when a company buys the production

inputs it needs to when those items arrive at the manufacturing
plant.
106 PCI compliance
PCI DSS stands for Payment Card Industry Data Security

Standard. It sets the requirements for organizations and sellers
to safely and securely accept, store, process, and transmit
cardholder data during credit card transactions to prevent fraud
and data breaches. Any organization that processes credit card
payments needs to prove it is PCI compliant.
107 Perceived Risk/Reward
This measures a consumer’s feelings about a product. Retailers

must try to lower the perceived risk and raise the perceived
reward. This can be accomplished in a number of ways, including
salespeople, peer reviews, authoritative reviews, guarantees,
warranties, to name a few.

108 Perpetual Inventory
Done through a retail point of sale system, a perpetual inventory

count updates your product levels automatically and immediately
upon each sale. This saves time and improves accuracy, keeping
a retail store running more smoothly.
109 Planogram
This is a detailed oor plan of a store. It visually represents the

placement of products and product categories throughout a
store (on shelves, racks, etc.) that best drives sales. A planogram
is a helpful tool for thinking about how placement impacts
purchase behavior and how retailers can be most e cient with
their space.
110 PLU
This stands for price lookup. It’s a system that displays the
description and price of an item when the item number is
entered or scanned at the point of sale. PLUs are often printed
on the customer receipt to remind the customer of what was
bought.

111 Point of Purchase Display
This is a form of merchandising found near or at the point of sale

and checkout area. It’s meant to attract last-minute purchases
that raise the average transaction value. Typically, these feature
promotions, bundled deals, impulse buys, and easily forgotten
everyday items. Managing the marketing around your POS can
have a big impact on a bottom line.
112 Point-of-sale (POS) system
At the most basic level, a point-of-sale system includes the

hardware and software that allows a retailer to check out
customers, record sales, accept payments, and route those funds
to the bank. But the right retail point of sale can do more than
record sales. With the right software integrations, it can help you
run your entire business and a ect your long-term growth.
113 Pop-up store
A short-term shop that keeps a physical space for a limited

amount of time. Pop-ups can be set up anywhere — empty retail
spaces, mall booths, parks, etc.

114 Predatory Pricing
Many of the big box retailers have been accused of predatory

pricing at some point. The idea behind it is that large retail
chains can a ord to undercut their competition with prices so
low that smaller retailers are left helpless. A smaller retail store
must either lower their prices and take a loss or lose the majority
of their business to the larger chains. The practice is now more
widely regulated.
115 Prestige pricing
This is a pricing strategy used by high-end retailers in which an

item is priced at a high level to denote its exclusivity, quality, or
luxury. Prestige pricing is intended to attract status-conscious
consumers or those who want to buy premium products.
116 Price Look-Up (PLU)
4 or 5 digit PLU codes are attached to each product in order to

provide a name and brief description. This ensures that the sale
is being recorded correctly in the inventory system, keeping
ordering and accounting e cient and organized.

117 Private label
A brand that is not owned by a manufacturer but by the retailer or

supplier. Retailers and suppliers buy the goods and market them
under their name. Target’s Up&Up and Simply Balanced are both
examples of private-label lines.
118 Procurement
This is the process of sourcing, negotiating, and strategically

selecting goods for your retail shop.
119 Product Depth/Breadth
Larger retailers usually reach a deeper product depth and larger

breadth. The depth refers to the number of products within a
single line, while the breadth refers to the number of lines that
are owned or carried by a retail store.

120 Product life cycle
This describes the stages a product goes through once it’s in the
market. There are four: introduction, growth (in sales), maturity,
and decline, and they show whether the expected sales are
strong or poor. By paying close attention to the life cycle of each
product, you can gather information to improve future products,
promotions, and o erings.
121 Proforma invoice
A document that outlines the commitment on the part of the

seller to deliver products or services to the buyer for a speci c
price. It’s sent in advance of a shipment, so it’s not a true invoice.
122 Psychological Pricing
Another common pricing strategy, this attempts to trick the

consumer into identifying something as being cheaper than it
actually is. Psychologists have long concluded that the average
person gives higher priority to the rst number in a price, leading
most retailers to price items and $1.99 instead of $2.00, for
instance. Another common theory maintains that the average
consumer is more attracted to odd priced items than even.

123 Purchase order
This is a document used to communicate purchase to an

employer. It can be used to approve, track, and process
purchases as well. A purchase order usually indicates types,
quantities, and agreed prices for products or services, as well as
delivery dates.
124 Quantity on hand
This describes the physical inventory that a retailer has in

possession.
125 Quantity on order
This is all the stock that you have in open purchase orders or
manufacturing orders.
126 Quantity-on-Hand
This just means the amount a retailer has in stock. Many retailers
also refer to quantity-on-order, which means the amount of a
product that is currently an open order with a supplier.

127 Relationship retailing
A strategy that businesses use to build loyalty and create lasting

relationships with customers. There are numerous tactics
retailers can use to reach those goals, including loyalty
programs, rst-class customer service, great return policies, or
personalized experiences.
128 Retargeting
This is an advertising practice in which online ads are targeted

to consumers based on their previous actions. A retailer like
Nordstrom, for instance, retargets consumers based on what
they’ve browsed on its site. A consumer may have looked at a pair
of shoes on Nordstrom’s website and is then retargeted with an
ad for those shoes on Facebook.
129 Return on Investment
An ROI is the amount of money returned to the retailer after an

investment is made. This can refer to the money spent and
earned on products themselves, but it can also be applied to
many other areas of retailing: email marketing, product
photoshoots store renovation, eCommerce platform, or many
others.

130 RFID
Radio frequency identi cation is the technology that provides

radio waves to track, read, and capture the information that lives
in a chip on a product’s label or packaging. RFID is used to take
accurate measures of inventory, but retailers are also looking at
how to use it to learn more about customers.
131 Routine Decision Making
People make hundreds of routine decisions each day without

even thinking about them. Retailers often try to o er and market
products that tap into these easy sales.
132 Sales Forecasting
A sales forecast estimates the future performance of a product

or group of products. Its accuracy is important so that retailers
can plan business operations, workforce, and cash ow each
year.

133 Showrooming
Showrooming is a recent trend that stems from the rise of

eCommerce. More and more consumers will shop for a product
at a physical location only to buy the same thing online at a
cheaper price. Consumers often like to see the product in person
prior to committing to a purchase. Price comparison apps and
online price matching can turn brick and mortar stores in no
more than showrooms.
134 Shrinkage
This is the di erence between the amount of stock that a retailer

has on the books and the actual stock that’s available. To put it
simply, it’s inventory loss that can be attributed to factors such as
employee theft, shoplifting, administrative error, vendor fraud, or
damage.

135 Social commerce
New retail and e-commerce practices that incorporate social

media, user-generated content, or social interaction. This
doesn’t mean that social platforms, like Instagram, are the
platforms where purchases happen; instead, social networks
help drive sales. There are a variety of types of social commerce:
peer-to-peer marketplaces, group buying, peer recommendation
sites, social network-driven sales, and user-curated shopping, to
name a few.
136 Standardization
Standardization is used by retailers who require a perfectly

consistent product each time it is purchased. It uses a series of
checks and balances to ensure a uniform standard for each item
sold.
137 Stock Turnover
Turnover of any inventory stock is an important unit of

measurement for retail stores. Knowing how quickly something
sells helps optimize ordering and inventory par levels.

138 Stock-keeping unit (SKU)
The meaning of SKU can be confusing. This is a number (usually

eight alphanumeric digits) that retailers assign to products to
keep track of stock internally. It’s used in inventory management
to track and distinguish one item from another. An SKU
represents all the attributes of a product, including brand, size,
and color. For example, one type of shoe could have 40 SKUs, in
various combinations of sizes and colors. An SKU is often
confused with a UPC (universal product code), as they both are
used to identify products. The di erence is that SKUs are unique
to a retailer, whereas a UPC applies to a product no matter what
retailer is selling it.
139 Store loyalty
When a buyer likes and trusts a store, and therefore

systematically goes there again and again to make purchases. A
retailer can encourage this with loyalty programs and special
promotions for regular customers.

140 Supply chain management
The management of the ow of goods and services, involving the

movement and storage of raw, work-in-process, and nished
goods from the point of origin to point of consumption.
141 Tribetailing
The retail practice of tailoring what you do — everything from

your products and store design to marketing and communication
— for a speci c group of people, or tribe. The goal of this is not to
appeal to the public or a mass market, but to capture a niche.
142 Triple net lease
This is a rental agreement on a commercial property in which the

tenant agrees to pay all ongoing expenses of the property (like
real estate taxes, building insurance, and maintenance) as well
as things like rent and utilities. Because the landlord doesn’t
have to worry about variable costs of ownership, this type of
lease generally has a lower rental rate than a standard lease.

143 T-Stand
This is a typical merchandising xture used to display clothing. It

can have straight or waterfall arms.
144 Uni ed Brand
This goes hand in hand with the omnichannel experience. If you

o er products on multiple platforms, it’s important to maintain a
uni ed brand and experience through each of them. This way,
your customers feel no di erent shopping on your website, on
mobile, or in person.
145 Units per transaction (UPT)
This measurement is an average of the number of items sold

during each sales transaction. It’s one metric to track over time
to see growth.
146 Visual merchandising
This is the practice of creating visually appealing displays, in-

store experiences, and designs that drive tra c and maximize
sales. Studies have shown that visual merchandising can
in uence a customer’s perception of item quality and
likeliness to purchase.

147 Warehouse management system
Computer software designed for managing the movement and

storage of materials throughout a warehouse. The system is
usually divided into three operations: putaway, replenishment,
and picking.
148 Webrooming
The exact opposite of showrooming, webrooming is when a

customer shops online for a product and then leaves to
purchase it at a brick and mortar store. Webrooming is facilitated
by image-based sites like Pinterest and Instagram. It makes
browsing much each. The trends of webrooming and
showrooming are great examples of why creating an
omnichannel experience is so important.

149 Wearable Technology
These can have some interesting applications in retail.

For instance, merchants can potentially use them to gain insights
into customer movement, activity, and behavior as they move
about the real world. On the backend, wearable tech can allow
retail employees to do tasks such inventory counts hands-free. It
can also aid communication by enabling team members to
communicate with each other without having to use hand-held
devices.
150 Wholesale
This is the sale of goods in large quantities to retailers, who then

resell them.

Shashank Jani
Business Leader, Coach and Trainer for 25+ years Astute
Business Leader with International experience holding Key
positions such as Director, General Manager and Business
Head with Top Retail Organizations International brands
such as ALDO, ALDO Accessories, Agatha, Bally, BhS, Charles
and Keith, GANT, La Senza, Liz Claiborne, Lapin House,
Mango, Morgan, Mothercare, Nine West, Promod, Petit
Patapon, Pronuptia, Premaman, S. Oliver, Tommy Hil ger,
Veronique Delachaux to name a few, in many retail segments
such as Supermarket, Department Stores, Specialty Stores,
From Mid to Bridge to High End Brands.
LinkedIn: SHASHANK JANI

Retail Skills Training Overview
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150 Terms Every Retailer Must Know

One of the largest — if not the largest — retail stores in a shopping

Customers who physically arrive and check Into an appointment

This is the acronym for average transaction size or the average

150 Terms Every Retailer Must Know

5 Augmented reality (AR)

This principle is about supplementing the user’s physical world with

6 Back of House Retail

When a speci c quantity of an item could not be lled by the

150 Terms Every Retailer Must Know

A retail area, like a mall or shopping center, which is carefully

A machine-readable code, which has alternating dark and light

Used by more tech-advanced retailers, beacons can send

150 Terms Every Retailer Must Know

This measures the average consumer’s overall knowledge of a

14 Brick and click

150 Terms Every Retailer Must Know

15 Brick and Mortar

This term has become more commonly used to distinguish online

The classic de nition refers to distributing raw materials (such as

A type of promotional technique, bundled pricing groups various

150 Terms Every Retailer Must Know

Companies that bundle together a package of goods or services

19 Buy Online Pickup in Store

Not as gruesome as it typically means, retail cannibalization

150 Terms Every Retailer Must Know

According to PCI-compliance standards, unsecured card les are

22 Card on File (CoF)

Ways to store customer payment information. This is the

This can also be referred to as a holding cost. It is primarily made

150 Terms Every Retailer Must Know

25 Chargeback rebuttal letter

If a business wants to refute a chargeback, it might send a

A chargeback happens when a customer disputes a charge from

27 Click and collect

This omnichannel feature allows customers who buy an item

150 Terms Every Retailer Must Know

This term characterizes activities retailers use to build

A cloud POS is a web-based point-of-sale system that lets

30 Comp Store Sales

The measurement of productivity in revenue, comparing sales of

150 Terms Every Retailer Must Know

32 Consumer packaged goods

Contactless payments are powered by near eld

150 Terms Every Retailer Must Know

These are consumer products that are routinely purchased by

A term used to describe the nalizing of a sale. This usually goes

A business owned by a group of members instead of investors or

37 Cost of goods sold

150 Terms Every Retailer Must Know

Customer relationship management is an online system for

This refers to the retail practice of displaying products from

A strategy that groups di erent, unrelated products together to

Understanding the way customers use stores – understanding

150 Terms Every Retailer Must Know

A customer-facing display (CFD) — also known as a customer

This is an acronym for a distribution center. A distribution center

Also known as dead inventory, it’s how retailers classify products

150 Terms Every Retailer Must Know

Retailers must determine the number of styles and product

This is a retail slang for products that aren’t selling. See Dead

150 Terms Every Retailer Must Know

This refers to an arrangement between a retailer and a