Retail terminology that all should know about

1. Brick and mortar or best known as BNM

Refers to the physical shop from where the brand operates/sell its products/services.

It could be in building, mall, street side, warehouse either leased or owned.

Few types of brick-and-mortar store are convenience stores, groceries stores, speciality stores and departmental stores.

Few pros for BNM is that it provides interpersonal services and experience to the customers, if the product is tangible customer can see and feel the product before making the purchase , which is one of the most important driver of sales.

Saying that it has some disadvantages as well which are higher cost because of rents, staff cost and limitation in the geographical spread.

1. Omni channel Retailing

Is a business strategy that aims to provide high quality and seamless experience across all retail channels including store (BnM), mobile and online.

Most of the new aged brands are now omni channel, that means along with the traditional store they are also present in various e commerce and social media platforms and digital marketplace.

It offers great advantages like increase sales and revenues with advance data collection and analysis, increase brand presence with multiple tough points for customer engagement.

1. Footfalls

Footfall is the number of people who enter the retailer premises or place of business during a particular period.

It is an important indicator in measuring conversion rates, sales patterns, and most important customer likeliness to the brand.

1. Visual Merchandising 

VM is the marketing practice used to optimize floor space and product presentation and services in the store.

It uses tools such as floor planning, fixtures design and arrangements, visual, lighting, sound and other technology and elements to make display visually appealing and attract customers.

I play an important role to extend and built the brand perception by highlighting and enhancing products, improving customer experience, driving more footfalls all cumulatively translating to higher sales.

The four areas of visual merchandising – Store Exterior, store layouts, store interior and interior display.

1. Cross Merchandising 

Simply mean displaying products from different category together. The approach is strategic with an intent to increase the sales of the participating categories. Some examples will be t-shirts are cross merchandise with bottoms and outerwear so you can visualize the complete look. One extreme example is scotch and dolls together with a thought the dad who come to buy scotch will end up buying dolls for their daughter.

1. Forecast 

In my view forecast is one of the most important concepts used in retail. In simple words it means to predict or estimate a future event or trend.

It has a much deeper meaning as forecasting starts the earliest when designers work for the upcoming seasonal (designs colours. material, trends etc all are forecasted).

It is followed by making an estimation on demand (a combination of historical sales )

1. Self -Serve

Self-serve is a practice of allowing customers to select pay for that item themselves without any assistant of staff members.

Lot of new brands are experimenting with this model, Uniqlo, Carfourre , Ikea are some such examples.

1. Shrinkage

Represents the difference between the actual physical stock present and the amount of stock showing the system/data. The main reasons for shrinkages are theft and system discrepancies and errors. General industry standards for shrinkage range around 0-2%.

1. RFID chips

Stands for Radio frequency Identification with are microchips that are embedded in products label or packaging and are used for getting real time results for stock taking, monitoring tracking, and managing inventory levels.

1. SKU

Stands for Stock keeping unit is used by retailers to track stocks/merchandise internally. It goes down few levels unique attribute such as brand, category, colour, size to distinguish one product from another and in generally associated with the product barcode.

1. Dead Stock

Is defined inventory that has never been sold or has been sitting in stock for a long period of time and had a very low likelihood of selling in future also.

Most common reason for products to be categorise as dead stock is that  It is expired, out dated, out of season or had no demand.

1. Pop Up Store

A physical store set up for a limited time. It could be set up anywhere and are usually used for sale to clear dead stock.

1. Planogram

Is a schematic tool used to plan store layouts. The main purpose of the drawings is to visualize on how fixtures are arranged across the stores and how products are displayed across those fixtures. It is mostly a diagram or a 2D/3D model.

1. Big Data 

With systems designed to gather information at every aspect of human life, Big data generally refer to a huge amount of data points taking from various sources which requires advance technology or computer based programs to make any sense out of it. The term is more recent and gives advance visibility into the business in real time.

1. Keystone Pricing 

It refers of a simple method of pricing in which the product is sold exactly at double the buy cost of the product. This pricing allows good room to cover the operating cost and still maintain healthy margins.

1. Point of Sale or better known as POS

It’s the final place and process by which retail transactions are made. It’s usually a combination of a hardware, a software and physical space for the final sale to happen.

All the cashier area in a retail outlet is an example of POS – where a cahier using a scanner to register the unit sold, the data is them flows into the system for inventory management.

1. UPT

Are the number of items sold in each transaction. It is tracked by retailers to gauge performance and buying patterns and is usually analysed over time to get better understanding on overall growth.

1. ATV 

ATV is an acronym for Average transaction Value which refer to how much value a customer spends on one transaction.