Retail Dictionary

Result for the keyword. A

ABC analysis
A Iorm oI analysis that covers a range oI items, Irom inventory levels to
customers and sales territories, into three groups: A very important; B
important; C marginal signiIicance.

Aerotropolis
An airport village . A new type oI urban Iorm comprising aviation -intensive
businesses and related enterprises extending up to 25 kilometers outward Irom
major airports. The term was deIined by Dr. John D. Kasarda, an American
academic who deIined|concept in 2000. It is now being extended to include
even non aviation related businesses that are coming up to cater to the customer
traIIic created by airports.

Agent
A business intermediary who acts on behalI oI the manuIacturers. His role is to
collect orders Irom retailers and subsequently to collect payments. He gets
commission on the basis oI the collections.

Aging
A process that determines the age (number oI days old) oI 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 Ansal
Plaza in Delhi, Garuda Mall in Bangalore and Inorbit in Mumbai.

APMC : Agricultural Produce Marketing Committe
The APMC act instituted by the Govt. oI India Markets divides the geographical
area oI a State into market areas each oI which is managed by the Market
Committees constituted by the State Governments. Once a particular area is
declared a market area and Ialls under the jurisdiction oI a Market Committee,
no person or agency is allowed Ireely to carry on wholesale marketing
activities. The mandi`s in each market area come under the jurisdiction oI the
APMC.

Assortment Planning
This term applies to the merchandising and buying Iunction in retail. It reIers to
the task oI determining the speciIic quantities and Ieatures (brands, colors,
sizes) oI each product being purchased.

Atmospherics
The architecture, layout, signs and displays, color, lighting, music and odours
which together create an image in the customer`s mind. In short, the extra
elements that enhance a retail strategy mix.

Automatic reordering system
Involves the use oI computers to generate weekly merchandise orders that are
based on sales, in relation to model stock plans.

Average Basket Size
Average number oI units moving in one singe bill. It is calculated as Total units
sold/ No oI invoices.

Average Ticket Size
This reIers to the average bill value. It is calculated as Total sales / No oI
invoices.

Average unit value
This reIers to the average price oI a single unit. It is calculated as Total value/
No oI units.

Result for the keyword. B

B2B (Business-to-Business)
Business model Iocused on sales to other businesses. ManuIacturers and
wholesalers Iall into this category since they Iurther supply to businesses that
supply to the ultimate consumer.

B2C (Business-to-Consumer)
Business model Iocused on sales to consumers. Retailers are typical B2C
companies.

B2G (Business-to-Government)
Business model Iocused on sales to national, state, or local government
agencies.

Barcode
A unique identiIication Ior a product. It is normally printed on a sticker and put
on the relevant product.

Basket Size
The number oI units moving in one single bill e.g. iI you have bought 2 shirts
and one trouser Irom a store then the basket size is 3 pcs.

Beach head
A retail expansion strategy that Iocuses on establishing a strong store presence
or beachhead` in key markets beIore expanding to smaller ones.

Benchmarking
The process oI setting standards oI perIormance based on the achievements oI
high perIorming competitors.

Bin
Represents a physical place to store inventory. Normally used in the context oI
warehousing and generally reIers to physical rows/shelves.

Black Friday
The day aIter Thanksgiving in the USA. It is seen as the beginning oI the
Christmas Shopping season. While Black Friday is oIten thought oI as the
busiest retail shopping day oI the year, in Iact the busiest retail shopping day oI
the year is usually the Saturday beIore Christmas. The origin oI the term Black
Friday comes Irom the shiIt in proIitability during the holiday season. Black
Friday marks the day when many retailers shiIt Irom being unproIitable, or "in
the red," to being proIitable, or "in the black."

Book Inventory
Value oI goods on hand at a given time as reIlected in the books oI accounts.
This may vary Irom the actual stocks on account oI theIt.

Bottom-up planning
Involves estimating total sales Ior a business by adding together the planned
sales Iigures that have been developed by each business unit.

Breadth
Relates to the number oI product lines or to the number oI brands that is carried
by a store or department within a product classiIication.

Bricks and mortar
ReIers to a physical retail store.

Broad and shallow
ReIers to a merchandising strategy that Iocuses on oIIering a wide selection oI
brands/ lines with little depth in each.

Buyer
As the word denotes reIers to the person in the retail hierarchy who is
responsible Ior selecting, pricing, and purchasing merchandise.

Result for the keyword. C

Cannibalization
To cut into; cause to become reduced; diminish e.g. New products introduced in
the next six months will cannibalize sales Irom established lines. Also occurs
when sales oI one store are negatively aIIected because oI sales oI another store
e.g. II 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` ( cut
into/ reduce) the sales oI the Iirst store.

Carpet Area
The net usable area available Ior a store - the area that can be carpeted.`
Technically the carpet area is calculated by measuring space between walls ( as
measured Irom the inside oI the walls the internal perimeter) and does not
include space taken up by columns and staircases. However, Ior working
purposes, many retailers take the entire internal perimeter area as carpet area.

Carrying and Freight Agent (C&F agent)
A business intermediary who buys goods in bulk Irom the manuIacturer and
bills them Iurther to retailers as per orders booked by the manuIacturers sales
team. DiIIerent Irom 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 oIIices. 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 oI
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 speciIied time e.g.
payment within 7 days oI delivery may earn a cash discount oI 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 oI retail store that displays product catalogs Irom which customers select
the product e.g. Argos (UK)

Catchment Area
The geographical area Irom which trade to a store or centre is attracted; the
primary catchment area deIines the area Irom which the vast majority oI
shoppers (80-90) tend to use a particular store or centre in preIerence to other
stores or centres.

Category
A classiIication assigned to a certain group oI related retail items e.g. The Men's
wear category.

Category killer
An especially large specialty store Ieaturing an enormous selection in its
product category and at relatively low prices e.g. Toys R us.

Category Management
A method oI organizing the retail structure so that it is managed by product
category e.g. men`s, women`s, sports, kids etc

CCTV
Closed circuit TV. Used to monitor movement in diIIerent parts oI a store and
to deter pilIerage

Central business district (CBD)
The hub oI 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 oI oIIice 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 oI standardization. These
retailers believe that relatively Iew people who are experts should take all
important decisions.

Centralized buying
Occurs when all buying activities are perIormed Irom a retailers central
headquarters

Chain Store
Two or more retail stores under single ownership

Result for the keyword. C

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 oI a credit card transaction, typically initiated by the card issuer at
the cardholder's request. Charge backs can occur Ior any number oI reasons,
including customer disputes, potential or actual processing errors, and
authorization issues.

Cherry Picking
Selecting only the best. The act oI 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 men`s white Iull sleeve shirt with a regular collar.

Click and mortar
ReIers to retailers who have both an on line presence (click`) and physical
stores (mortar`).

Closing a drawer
The process oI recording the ending amount oI cash and other payment types in
a drawer beIore perIorming end oI day posting. Normally, a drawer is closed at
the end oI each day.

Collect ON DELIVERY (COD)
A shipping method where the buyer pays Ior 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 Ior it only when it sells

Consignment Goods
Items not paid Ior by retailer until they are sold. The retailer can return unsold
merchandise and does not take title until the Iinal sale is completed.

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

Convenience store
A Iood oriented retailer that is well located, is open long hours, and carries a
moderate number oI items. It is small, has average to above average prices and
average atmosphere and customer services. In India these are known as Kirana
stores.

Conversion
The number oI people who buy Irom among those who walk into a store e.g. iI
a 100 people walk into a store and only 50 buy, the conversion is 50. The
conversion percentage Ior the same will be 50.

Cost of goods
Includes the actual cost oI the merchandise including all expenses involved in
getting the goods Irom the vendor to the store and any alteration costs
thereaIter. Cost oI goods sold Cost oI merchandise (discounts
transportation alteration costs)

Cost plus pricing
A pricing strategy where the retail price oI the product is determined on the
basis oI a pre determined mark up on cost

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

Result for the keyword. C

Covered Area
The actual area occupied by the retailer this is measured as the space between
the walls (measured Irom the outside oI the wall the external perimeter) and
includes columns, stairs etc. This is also known as Plinth area.

Critical mass
The size at which a business undergoes a Iundamental change in regard to
operations e.g. a retailer needs to achieve a certain critical mass beIore 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 oI maximizing proIitability,
revenue, and customer satisIaction. The term is also used Ior soItware
technologies that support this business goal and which include the capture,
storage and analysis oI customer inIormation. The technology to support CRM
initiatives must be integrated as part oI an overall customer-centric strategy.
Many CRM initiatives have Iailed because implementation was limited to
soItware installation without alignment to a customer-centric strategy.

Cyber Monday
ReIers to the Monday immediately Iollowing Black Friday, which marks the
beginning oI the Christmas shopping season Ior online retailers. In recent years
Cyber Monday has become one oI the busiest days Ior online retailers.

Result for the keyword. D

Data mining
ReIers to the process oI searching through data to Iind trends and patterns that
might otherwise have gone unnoticed.

Data warehousing
ReIers to the process oI electronically storing customer and operations (sales
and stock) data

Day time population
The population oI a city during the day. Some cities which are district head
quarters attract a lot oI people in the day. These people are not residents but add
to the population during day time.

Dead Areas
Awkward spaces in a store where normal displays cannot be set up and which
tend to attract low customer IootIall.

Decentralised organization
Retail organisations which seeks to place decision making authority in the
hands oI managers close to geographically localized conditions.

Decline stage
The last stage oI the product liIe cycle that occurs when the target market
shrinks, and price cutting minimizes proIit margins

Delivery period
The time between when an order is placed and when the merchandise is
available on the sales Iloor. Also known as lead time.

Demographic data
Data that documents Iacts about customers on matters relating to age, sex,
Iamily size, income, education, occupation and race.

Department store
A retail store that has a number oI distinct product departments.

Depth
The number oI choices/ options oIIered to customers within each brand or
product classiIication e.g. A shallow depth would reIer to Iewer options Irom
which to select.

Destination Store
A retail store where merchandise selection and presentation, pricing, or other
unique Ieatures act as a magnet Ior customers making the store their primary
shopping destination.

Discretionary pricing
A pricing strategy where the retail price oI the product is decided by the price
that the product can command in the market.

Distributor
A business intermediary who buys goods in bulk Irom the manuIacturer and
sells them to the retailer in smaller quantities. Also known as a Wholesaler.

DIY (Do it yourself)
ReIers to a category oI product, mostly home related , which can be assembled
by the consumer.

Doorbuster deals
A term used to reIer to super attractive promotions normally discount oIIers
that are expected to get crowds into the store.

Down market
Appealing to low income consumers. Normally cheap, popular and oI poor
quality.

Drawer fund
The amount oI money leIt in a drawer aIter the drawer has been closed. The
drawer Iund is typically used to provide startup money (change) Ior the next
business day. Also known as Iloat.

Durables
Products (such as cars, Iurniture and appliances) that are capable oI surviving
many uses and typically last Ior years

Result for the keyword. E

Early adopters
Those consumers who purchase Iashion merchandise in the early stage oI the
product liIe cycle.

EBO
Exclusive Business Outlet. This reIers to a retail store that keeps only a single
brand e.g. a Levis exclusive showroom.

Economic Order Quantity ( EOQ)
Size oI an order at which the total procurement cost and inventory carrying cost
is the minimum.

EDI (Electronic Data Interchange)
Ability to electronically exchange purchasing inIormation between your retail
soItware and the vendor's system.

EDLP (Every day Low Pricing)
A pricing strategy whereby a retailer strives to sell all oI its goods and services
at consistently low prices throughout the selling season.

End caps
The end pieces oI 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.

Evening Economy
The economic beneIits derived Irom the utilization oI spaces uses within a town
centre that attract visitors in the evening Ior leisure and entertainment purposes,
such as cinemas, theatres, public houses, bars, restaurants, bingo, night clubs
and casinos.

Exception reporting
Reporting that only includes inIormation not meeting established criteria. For
example, iI you plan to sell between 2 and 5 oI your inventory per week,
then exception reporting would allow you to report on product sales outside
your criteria limits (e.g. product sales that Iell below 2 or rose above 5).

Result for the keyword. F

F.O.B (Free - on -board)
It is a method oI expressing who is responsible Ior paying transportation
charges e.g. FOB Iactory would mean the retailer is paying the transportation
charges. Title passes to the buyer when the seller delivers goods to the
transportation carrier.

Factory Outlet
A manuIacturer-owned store selling Iirms Iactory seconds, store discontinued
merchandise, canceled orders. Goods are normally available at an attractive
discount.

Fad
A short lived Iashion

Fair Trade
Protects smaller and Iull services retailers against discounters by requiring
uniIorm retail prices. Fair trade is now banned in the United States.

FIFO (First in, First out)
A method oI inventory control that assumes that the merchandise that was
received Iirst is sold Iirst e.g. iI white shirts were received in two batches oI
IiIty pieces each, as per the FIFO method the Iirst 50 pieces should be sold Iirst.

First Moment of Truth
This is an expression introduced by Procter and Gamble. The First Moment oI
Truth reIers to the 3-7 seconds aIter a shopper Iirst encounters a product on a
store shelI. This time lapse is called (by P&G) "Iirst moment oI truth" and it's
considered the most important marketing opportunity Ior a brand. It is in these
Iew seconds, P&G contends, that marketers have the best chance oI converting
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 oIIering a range oI products at discount
prices in plain surroundings. Goods are oIten sold oII pavements and small
shacks.

Float
The cash that is provided at the cash till every morning to conduct the day`s
business. It normally includes a predetermined mix oI currency denomination to
ensure that the cashier has suIIicient 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 classiIication that reIers to wide range oI Irequently purchased
consumer products including: toiletries, soaps, cosmetics, teeth cleaning
products, shaving products, detergents, bulbs, batteries.

Footfall
The number oI people walking into a store

Fourway rack
Floor Iixture which has 4 racks. OIten used Ior trouser displays.

Franchising
A contractual arrangement between two parties the Iranchisor (normally a
brand owner or manuIacturer) and the Iranchisee ( normally a store owner or a
licensee oI the brand) , that allows the Iranchisee to conduct business under the
brand name and according to norms oI business as set by the brand.

Free flow
Series oI circular, octagonal, oval shaped Iixture patterns. The aisles
deliberately lack uniIormity. Popular Ior up-market stores.

Result for the keyword. F

Free trade agreement
An agreement between countries to eliminate tariIIs on merchandise being
traded

Free-Standing store
A retail location that is independent oI any shopping center e.g. Shoppers Stop
at Andheri (Mumbai) is a Iree standing store.

Frequent Shopper Program (Customer Loyalty Program)
Program designed to reward customers Ior their continued business. It is
designed to promote loyalty, increase visitation, and encourage Iuture
purchases. Rewards may be in the Iorm oI discounts, awards, or other perks.

Full Line Discount store
A type oI department store characterized by (1) a broad merchandise assortment
(2) merchandise normally sold via selI service with minimal assistance (3)
private brand durable and non-durable goods (4) hard goods accounting Ior 60
per cent oI merchandise sold (5) a relatively inexpensive building, equipment
and Iixtures.

Full price sell through
The amount oI goods the company has sold or plans to sell at Iull price as a
percentage oI the total buy.

Fusion clothing:
A mix oI Indian and western clothing.

Result for the keyword. G

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

Geographic departmentalization
ReIers 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 perIormance indicator. It is a numerical indicator oI the
company`s return on its investment Ior an item or group oI items and is
calculated as Iollows

Gondola
A center oI Floor Iixture that allows Ior Ilexible display.

Gray Market Goods
Generally well known branded products that are sold through unoIIicial`
channels in Ioreign markets. They are oIten sold by unauthorized dealers at
prices that are determined locally.

Grid Layout
A rectangular arrangement oI Iixtures and aisles in a more or less repetitive
pattern. Secondary aisles run at right angels to the main aisles and each aisle is
usually oI the same width Ior the entire length. Popular Ior supermarket and
discount Iormats.

Gross Area
Total area oI a store including external space like verandahs and internal
spaces like staircase etc. The total area Ior which rent is being paid.

Gross profit (margin)
The diIIerence between an item's retail price and its cost.

Growth Stage
The stage in the product liIe cycle where innovators have recommended the
purchase oI a new product to their Iriends, causing increased sales and product
variations

Result for the keyword. H

aat
A weekly village Iair in India with temporarily set up stores normally spread on
the ground, with each seller retailing diverse product oIIerings.

ang tag
A hanging price tag used Ior apparel and similar merchandise to describe the
product or to give inIormation about the company.

ard lines
ReIers to merchandise lines like hardware, sporting goods, appliances, Iurniture,
lawn and garden basically all merchandise carried by a store with the
exception oI apparel and accessories and Iashions Ior the home

aute couture
Haute Couture is a French phrase Ior high Iashion. Couture means dressmaking,
sewing, or needlework and haute means elegant or high, so the two combined
imply excellent artistry with the Iashioning oI garments. In modern France,
haute couture is a "protected name" that can be used only by Iirms that meet
certain well-deIined standards. However, the term is also used loosely to
describe all high-Iashion custom-Iitted clothing, whether it is produced in Paris
or in other Iashion capitals such as Milan, London etc. Haute couture is made to
order Ior a speciIic customer, and it is usually made Irom high-quality,
expensive Iabric and sewn with extreme attention to detail and Iinish, oIten
using time-consuming, hand-executed techniques.

igh street
A popular shopping area characterized by high rentals and premium brands e.g.
Linking Road in Mumbai or Commercial Street in Bangalore.

ub and spoke
A store expansion strategy which requires setting up oI Ilagship stores or hubs`
in key markets and then expanding to smaller markets in neighboring areas.

ypermarkets
Mega supermarkets and general merchandise stores that stock everything Irom
Iood to appliances

Result for the keyword. I

Impulse product
Occurs when consumers purchased products and or brands they had not planned
to buy beIore entering a store as a result oI some stimulus at the store e.g. an
attractive product display.

Independent stores
ReIers to a single store, which is not part oI any chain. The bulk oI stores in
India Iall in this category.

Introduction stage
The stage in the product liIe cycle that occurs when products are usually
accepted by only a Iew people

Inventory
Merchandise on-hand Ior sale to customers in the ordinary course oI business.
Also called Stock.

Result for the keyword. J

ust In Time Inventory
A computerized method oI tracking inventory needs and writing purchase
orders timed so that inventory arrives only on the day it is needed.

Result for the keyword. K

eystone Markup
A markup equal to the cost oI the merchandise. Retail price is determined by
doubling the cost oI an item.

irana Stores
A small Indian neighborhood mom- and pop store dealing with basis grocery
and top-up convenience products, oIIering personalized service. It is small, has
average to above average prices and average atmosphere and customer services.

Result for the keyword. L

Laggards
Consumers who accept a style when it is in the decline stage oI the product liIe
cycle.

Landed cost
The importer`s Iinal cost Ior Ioreign merchandise, which includes the
merchandise cost, duties and tariIIs, 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 Irom the date an order is placed by a retailer to the date
merchandise is ready Ior sale (received, price marked, and put on the selling
Iloor)

Licensed Brands
Brands Ior which the licensor ( owner oI a well known name) enters into a
contract with a licensee ( a retailer or a third party) The license either
manuIacturers or contracts with a manuIacturer to produce the licensed product
and pays a royalty to the licensor.

Lifetime value
The potential oI a customer to give business over his/ her liIetime. E.g. iI a
person spends Rs 10,000 a year on shirts then over his active shopping liIetime
(assuming it to be 40 adult years) he will spend 400,000/-.

LIFO
Last in First out method oI inventory control that assumes the merchandise that
was received last was sold Iirst

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

List Price
A retail level price generally set by manuIacturers

Lock in period
When reIerring to real estate transactions, the lock in period reIers to a period
during which the tenant and the landlord are committed to the terms oI the
contract. This is the minimum period Ior which the transaction is valid. Any exit
clause is applicable only aIter this period. Vacating the space beIore the
stipulated lock-in period means IorIeiture oI deposit, and in some cases a
penalty, depending on the contract drawn up by the two sides.

Logistics
The total process oI moving goods Irom manuIacturer to a customer in the most
timely and cost eIIicient manner possible

Loss leader
A pricing strategy where a particular item is sold below cost in an eIIort to
stimulate other, more proIitable sales. For example, during the Thanksgiving
season, turkeys are Irequently sold at pennies per pound in the hopes that the
grocery store will proIit Irom other groceries purchased at the same time.

Loyalty programs
Promotion programs run by retail chains where customers are given tangible
rewards Ior patronizing a store. The higher the patronage the greater the reward.

Result for the keyword. M

Made ups
ReIers to the line oI home textiles that includes linen, tapestry, curtains etc.
Also known as soIt Iurnishings.

Mall
A shopping mall or shopping centre is a building or set oI buildings that contain
a variety oI retail units, with interconnecting walkways enabling visitors to
easily walk Irom unit to unit. In a sense it is an enclosed market.

Mandi
A whole sale market Ior Iruits and vegetables in India

Mapping
A technique to evaluate the trading area oI store by determining the distance
people are likely to travel to get to the store, the population density oI the
geographic area surrounding the store, and the travel patterns and times Irom
various locations

Margin
The diIIerence between the cost oI an item and its price E.g. iI cost oI goods is
Rs 100/ and the retail price oI Rs 150/- then the rupee margin is Rs 50/-

Margin percentage
The gross proIit or margin expressed as a percentage oI the retail price. E.g iI
cost oI goods is Rs 100/- and the retail price oI Rs 150/- then the rupee margin
is Rs 50/- and the margin percentage is 33.33.

Markdown
A reduction in the original retail price, primarily taken Ior clearance oI end oI
season merchandise or Ior promotional reasons.

Markdown percentage
A control tool used by buyers. It is calculated by dividing total Rupee
markdowns by total sales. E.g. iI 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 Iirm charges premium prices and attracts
customers less concerned with price than service assortment and status.

Markup
The amount oI money added to the cost oI goods to calculate retail price. E.g. iI
cost oI goods is Rs 100/ and you add Rs 50/- to this to arrive at the retail price
oI Rs 150/- then the mark up is Rs 50/-

Markup Percentage
The Rupee mark up expressed as a percentage oI the cost price. E.g. iI cost oI
goods is Rs 100/ and you add Rs 50/- to this to arrive at the retail price oI Rs
150/- then the mark up is Rs 50/- and the mark up percentage is 50.

Marquee
A sign used to display a store`s name and or logo

Maximum Retail Price (MRP)
The selling price marked on the product, inclusive oI taxes payable by the end
customer. This is a terminology used in India. As per statutory regulation all
packaged goods in India must have a marked MRP. Retailers are permitted to
sell below MRP but not above.

MBO
Multi Brand Outlet. This reIers to a retail store that keeps multiple brands e.g.
Shoppers Stop.

Merchandise Mix
The types or mix oI products that are available Ior customers to purchase.

Minimum order
The smallest sale permitted by a manuIacturer or wholesaler (vendor).

Result for the keyword. M

MIS (Management Information System)
MIS is a planned system oI collecting, storing and disseminating data in the
Iorm oI inIormation and reports needed to carry out the Iunctions oI
management.

Mix and match
Normally used Ior the salwaar, kameez and dupatta category. These are the
three elements oI a popular Indian dress Iorm where each piece is sold
separately and customers can put the ensemble together as they like.

Model Stock Plan
The planned composition oI Iashion goods, which reIlects the mix oI
merchandise available based on expected sales. The model stock plan indicates
product lines, colors and size distributions. It is the ideal stock plan.

Mom and pop stores
Independent stores that are owned and run by the Iamily unit ( by mom and
pop). The bulk oI the stores in India Iall in this category.

Moment Of Truth
This is a customer service concept coined by Jan Carlzon Iormer Chairman oI
Scandinavian Airlines. It reIers to all the points oI contact or interaction
between a customer and a Iirm that gives the customer an opportunity to Iorm
or change their impression about the Iirm e.g. a customers impression about a
retailer is aIIected by the advertising they see, by the store, by the sales staII,
the cashier etc. A customer may be satisIied by the entire experience but iI (s)he
is made to stand in a billing queue Ior 20 minutes, that one moment oI truth is
capable oI spoiling the entire experience. (Also see First Moment oI Truth)

MRTP(Monopolies and Restrictive Trade Practices)
An act introduced by the Govt. oI India to protect the consumer by preventing
the Iormation oI cartels and monopolies and by investigating and ruling against
unIair trade practices.

Mystery Shoppers
People hired by retailers to pose as customers and observe their operations right
Irom sales presentations to how well displays are maintained to in home service
calls

Result for the keyword. N

Narrow and deep
ReIers to a product merchandising approach oI stocking large amounts oI a Iew
product categories or brands.

Net sales
The revenues received by a retailer during a given time period aIter deducting
customers returns, markdowns , and employee discounts.

Niche
A clearly identiIiable segment oI 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 Iloor space used in supporting activity including stock rooms, cash oIIice ,
entrances, show windows, elevators, oIIices, generator rooms, alteration spaces.

Non-durables
Products that are used up in a Iew uses e.g. soaps, shampoos

Number of weeks cover
The number oI weeks oI current sales represented by the current stock e.g. iI the
current sales is Rs 1 lac per week and the current stock is Rs 12 lac then the
store is carrying 12 weeks oI stock.

Result for the keyword. O

Obsolescence
The outmoding oI a product due to a change in Iashion/ technology beIore its
useIulness has been exhausted.

Off - price chain
Stores that sell branded apparel and accessories, Iootwear etc and sell them at a
discounted or everyday low prices in an eIIicient, limited services environment.
Occurs when retailers purchase manuIacturers overruns at deep discounts Ior
the purpose oI oIIering consumers low prices on branded merchandise

Open to Buy
The diIIerence between the planned purchases and purchase commitments
already made by a buyer Ior a given time period, oIten a month. It is what the
buyer has leIt to spend at any point in a month

Opportunity Costs
BeneIits that are given up by choosing one type oI opportunity over another e.g.
II an individual puts money in a business then the opportunity cost he incurs is
the interest that the money would earn iI he put it in a bank instead.

Organization Chart or Organogram
A graphically display oI the reporting relationships within a Iirm

Over stored Trading Area
A geographic area with so many stores selling a speciIic good or service that
some retailers will be unable to earn an adequate proIit

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 Ior a merchandising period.

Result for the keyword. P

Packing Slip
A slip that accompanies each carton oI goods in a shipment and that gives the
list oI products and quantities oI each product in the carton.

Penetration pricing
A pricing strategy that uses low proIit margins to generate greater sales; usually
used to quickly gain market share.

Per sq ft per day (PSFPD)
This reIers to sales per sq. It. per day. It reIers to the sales achieved on a per
Ioot basis everyday. Also see Sales Per Foot (SPF).

Periodic inventory
A method oI determining the value oI retail merchandise at periodic intervals by
perIorming a physical count oI the items in stock.

Perpetual inventory control
A method oI inventory control in which the number oI units and the total value
oI inventory can be obtained at any time Irom the stock records. In this method
all additions (purchases) and withdrawals (sales) are recorded as they occur, in
order to provide a running stock balance. Physical veriIication oI the same is
done by counting a certain number oI items on a regular basis (daily, weekly or
monthly) so that, by the year end, every item has been physically counted at
least once. II there is any mismatch (due to human error, leakage, pilIerage,
loss) between the physical quantity and the quantity shown in the inventory
records, the records are adjusted accordingly.

Picking ticket
A list oI items used at the warehouse Ior physically gathering items Ior
shipment. Picking tickets typically include item and customer inIormation,
where the item is physically located (the bin), quantity ordered, and a place to
write the actual quantity oI the item being shipped.

Pilferage
TheIt in a store. This could be theIt by consumers or by staII.

Pilferage
TheIt. Goods that go missing because they are stolen.

Planogram
A planogram is a visual plan showing the physical allocation oI products within
a Store.

Point -of Purchase (POP)
The physical location at which goods or services are sold to customers. Also
called Point oI Sale.

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

Post-Purchase Dissonance
A condition oI conIlict or anxiety post making a purchase. This could be as a
result oI inconsistency between one's belieIs and one's actions e.g. being against
the slaughter oI animals and buying a snakeskin bag, or on account oI Ieeling
that one has made an incorrect decision e.g. the product was beyond the budget.

Predatory Pricing
A pricing strategy that attempts to destroy competition by selling goods and
service at extremely low prices.

Prestige pricing
A pricing strategy that assumes consumers will not buy goods and services at
prices deemed too low, since they may Iear it is oI poor quality

Price Club
A price club is a retail store, usually selling a wide variety oI merchandise, in
which customers pay annual membership Iees in order to shop. The clubs are
able to keep prices low due to the no-Irills Iormat oI the stores. In addition,
customers are required to buy large, wholesale quantities oI the store's products,
which makes these clubs attractive to both bargain hunters and small business
owners.
Also known as a cash and carry store.

Price Elasticity of demand
It is a measure oI how consumers react to a change in price. It reIers to the
change that is likely to happen to demand Ior a product as the price changes. In
other words, it is percentage change in quantity demanded by the percentage
change in price oI the same commodity. Price inelastic demand means a
producer can raise prices without much hurting demand Ior its product and price
elastic demand would indicate that a small increase in price will lead to a
relatively larger Iall in demand.

Result for the keyword. P

Price Line
A price point that is selected by a company Ior its business. DiIIerent price lines
are chosen to appeal to target customers. Stores carry product only at these
selected price points.

Price Range
The width oI price points that a store carries Irom the lowest or lead in price
point to the highest price point e.g. a store may have a price range Ior t/shirts
starting at Rs 199/- and ending at Rs 699/-.

Price war
A situation in a very competitive environment when one retailers attempts to
underprice another, and results in retailers continuing to lower prices in turn to
undercut the other. Increased sales may result, but usually at the expenses oI
proIits.

Private label
Merchandise that is developed by retailers under their own labels .

Product facings
this reIers to the number oI units in a retail display which Iace the customer. A
single unit oI a product is one Iacing wide, because its Iace ( Iront side oI the
product ) takes up one space. The overall shelI display is measured in terms oI
the number oI Iacings per product. For e.g. iI a supermarket shelI has 50
shampoo bottles. These are stacked as Iollows : 10 bottles Iace the consumer
and each bottle has 5 bottles stacked behind, then the number oI product Iacings
Ior shampoo is seen to be 10 since these are the number oI units that Iace the
customer.

Product life Cycle
A graphic representation oI the expected behavior oI a good or service over its
liIe. The traditional cycle has Iour stages introduction , growth maturity and
decline ( picture ?)

Product line
A board category oI products that have similar characteristics and uses e.g.
Trousers or shirts.

Profit center
A distinct area within your company Ior which sales, expenses, and proIits can
be calculated separately Irom the total sales and expenses oI the whole company
e.g. each department in a retail store may be treated as a separate proIit center.

Promotional calendar
A calendar that shows the promotions planned over a given period. The
promotion calendar is normally made well in advance Ior the whole Iinancial
year. This allows all the departments concerned Store operations,
Merchandising and Buying and Marketing to plan eIIiciently.

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

Proof of Delivery
VeriIication provided by a Ireight company that a shipment was delivered at a
certain time and place and was signed Ior by the recipient

Psychographic data
InIormation on the liIestyles, interests, and opinions oI consumers

Psychological Obsolescence
The loss oI value or useIulness resulting Irom advances in technology and the
passage oI time. e.g. changes in Iashion makes us change our clothes even iI
they are not worn out , but in our minds they are no longer wearable.

Psychological Pricing
Psychological pricing is a marketing practice based on the theory that certain
prices have a psychological impact Ior e.g. prices that are market at Rs 99/-. The
assumption is that consumers will perceive a price point oI Rs 199/- as
signiIicantly lesser than a price point oI Rs 200/-.

Purchase order (PO)
A record containing the details oI an order Ior merchandise that has been placed
with a vendor. Typically, the PO includes the items purchased, costs, discount
terms, and shipping inIormation.

Result for the keyword. Q

Quantity discount
A reduction in price oIIered on the purchase oI large volumes oI product.

Quick Response (QR)
Enables a retailer to reduce the amount oI inventory it keeps on hand by
ordering more Irequently and in lower quantity.

Result for the keyword. R

Rack jobber
Special type oI vendor who is assigned shelI space in a store with the
responsibility Ior keeping it stocked with quick-turning merchandise

Range plan
A seasonal plan that has an item wise list oI the lines to be ordered, along with
the quantities , costs and margins.

Rate of sale
The number oI pieces selling per option per outlet per week Ior all outlets
stocking the option e.g Rate oI sale Ior a white, Iull sleeve shirt with button
down collar that sold 450 pcs across 10 stores over 15 weeks will be 3 i.e 3 pcs
sold per week per store Ior this option.

Reach
ReIers to the number oI people who will be exposed to one or more promotional
messages

Reductions
All 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 Iirm that consists oI multiple retail units under common ownership and
usually has some centralization oI decision making.

Retail Life Cycle
A theory asserting that institutions like the goods and services they sell pass
through identiIiable cycles with Iour stages innovation, accelerated
development, maturity and decline

Retail Merchandising
The science oI oIIering the right goods to ultimate customers at the right price,
at the right location, and at the right time.

Retail Mix
The mix oI variables which Iorm the overall retailing strategy. including
location, merchandise, communications, price, services, physical attributes and
personnel,

Retail POS System (Retail Point of Sale System)
A computerized system made up oI retail soItware and point oI sale hardware. It
is used Ior billing and Ior recording transactional data.

ROI
Returns on Investment (annual proIit)/(investment capital) . This is a Iinancial
calculation and reIers to the ratio oI money gained or lost on an investment
relative to the amount oI 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 cash
than 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 ROI
Rs 20/Rs 100 20 ROI

Rotating stock
A method oI moving stock around on the shop Iloor to ensure that new and old
merchandise is alternately given an opportunity Ior display .

Result for the keyword. S

Safety Stock
The extra inventory kept on hand to protect against out oI stock conditions due
to unexpected demand and delays in delivery

Sale leaseback
The practice oI retailers building new stores and selling them to real estate
investors, 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 oI Iuture sales Ior a speciIied period under a proposed marketing
plan

Sales per square foot (SPF)
Net sales divided by the square Ieet oI retail selling space. It can be calculated
on a daily, weekly, monthly or annual basis. It is calculated as sales/ square Ieet
oI space. E.g. iI a 1000 sq It stores does a daily sale oI Rs 30,000/- then the
daily SPF is Rs 30/-.

Same store sales
A comparative measure used to compare sales oI stores that have been open Ior
more than one year. This allows us to compare the business growth that has
taken place in the existing stores Irom one year to another.

Seasonal merchandise
Merchandise purchased Ior a speciIic season that is only in demand Ior a short
period oI time (e.g., summer, Christmas, back to school, etc.).

SEC
Socio Economic ClassiIication. A method oI classiIying the target audience on
the parameters oI education and occupation only. Under this method oI
classiIication SEC A normally reIers to the well heeled , while SEC D and E
reIer to the less prosperous and less educated members oI society.

Seconds
Merchandise that contains deIects or damages.

Selling area
Total area used in selling including display area, customer aisles, Iitting rooms,
and billing area.

Shelf talkers
Form oI signage used in a store to announce the oIIers/prices/product Ieatures
etc. Usually placed on shelves or Iixtures near the products Ior 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 on
consignment terms. The area is managed and branded by the brand.

Shoplifting
The act oI stealing merchandise normally by people posing as customers -
Irom a store that is open Ior business.

Shrinkage
The diIIerence between actual physical stock in the store and book records oI
stock. Shrinkage represents actual losses oI merchandise through shopliIting,
employee theIt, record keeping errors, breakage, etc.

Skimming
A pricing strategy that aims when stores charge the highest price possible. They
are willing to make do with lower sales since the proIit margin on each item is
high.

Result for the keyword. S

Soft furnishings
ReIers to the line oI home textiles that includes linen, tapestry, curtains etc.
Also known as made ups.

Soft Goods
Apparel and linens are collectively termed as soIt goods.

Specialty Department Store
A department store Iormat that Iocuses on apparel and soIt home goods ( e.g.
Westside)

Specialty Store
A retailer that concentrates on selling one product or service line. In other
words, a store specializing in one category oI merchandise, Irequently Iashion-
related e.g. Van Heusen stores are men`s wear specialty stores.

Stock - to - sales ratio
A Iigure that indicates the relationship between planned sales and the amount oI
inventory required to produce those sales. SpeciIically it is the ratio between the
beginning oI month stock Iigure and the planned sales Ior the same month.

Stock eeping unit (S&)
ReIers to a unique product description. E.g. For men`s shirts a SKU would
represent a unique size / style / color combination - a white men's shirt with
Irench cuIIs and a size 40 neck in halI sleeve. All items that Iit this description
will come under the same SKU.

Stock Turnover
Represents the number oI times during a speciIic 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/ Average
stock. E.g. iI sales Ior 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 per
year.

Store directory
A Iorm oI store signage that lists all the departments in a store and indicates
their locations. Normally put at the store entrance and at key vantage points.

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

Store layout
The spatial arrangement oI selling and non-selling departments, aisles, Iixtures,
display Iacilities and equipment in the proper relationship to each other and the
Iixed elements oI the structure.

String Store Market
An unplanned shopping area comprising a group oI retail stores, oIten with
similar or compatible product lines, located along a street or highway

Super built up area
Total area oI a store Ior which rent is being paid. Besides the physical area oI
the store it includes a proportional share oI areas devoted to common Iacilities
like liIts, corridors, verandah`s etc.

Super Saturday
An American term used Ior the Saturday that comes beIore Christmas. It is
normally a bumper day Ior retail sales.

Super specialty store
A store that is very highly specialized in a particular kind oI product e.g. The
T/shirt store

Supermarket
A retail store which sells groceries, dairy products, meats and produce along
with some non Iood items

Supply chain
Supply Chain reIers to the distribution channel oI a product, Irom its sourcing,
to its delivery to the end consumer (also known as the value chain). The supply
chain is typically comprised oI multiple companies.

Result for the keyword. T

Tag /ticket/ swing ticket
A physical label attached to merchandise Ior sale. Normally carried inIormation
on the product or the company and carries the bar code and the price
inIormation.

Target market
The speciIic group or groups oI consumers on which a retailer Iocuses its
marketing activities

Tariff
Tax on goods coming into a country

Tearsheet
Sheets oI magazines that are torn to be used later. Designers Ior instance
maintain tear sheets oI Iashion styles to use them as reIerences when planning
the new seasons lines.

Terms of sale
Arrangements between merchandise source and retailer relative to time period
Ior payment oI invoice.

Ticket Size
This reIers to the value oI the bill e.g. iI you have bought two items worth Rs
1000/- each then the value oI the bill or the ticket size is Rs 2000/-

Ticket Value
The value oI a single bill

Top- down planning
Involves the top level oI management estimating total sales Ior 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 oI trade Irom an existing store or centre as a result oI a new retail
development taking place, usually measured as a percentage oI its turnover
beIore the opening oI the new development.

Trading Area
The geographic area Irom where a store gets the bulk oI its customers.

Trading down (down trading)
ReIers to the act oI replacing current purchases with items that may have less
Ieatures/ poorer quality but are less expensive. In periods oI high inIlation,
customers tend to trade down to manage their household budgets.

Trading up
This reIers to the act oI replacing current purchases with items that have more/
better Ieatures and are consequently more expensive. In periods oI prosperity
customers tend to trade up to enjoy a better product experience.

Traffic
ReIers to the people in an area or those walking into a store. A high traIIic store
is one which sees a lot oI walk ins.

Trunk show
Retail events where suppliers present their merchandise directly to the Iinal
customer. Designer Trunk shows are a popular retail event. The designer is
normally present at the store at the time and interacts directly with the Iinal
customer.

Result for the keyword. U

&p market
Appealing to high income consumers

&PC (&niversal Product Code)
The standard Ior encoding a set oI lines and spaces (or barcodes) that can be
scanned and interpreted by retail soItware to identiIy a product.

Result for the keyword. J

Variety Store
A retail establishment selling a wide assortment oI inexpensive and popularly
priced goods and services , such as stationery, giIt items, women`s accessories,
health and beauty aids , light hardware, toys, house wares, and conIectionary
items.

Vendor
An individual or organization Irom which a retailer purchases merchandise Ior
resale. Also called a supplier.

Visual merchandising
A display arrangement including the layout oI store Iacilities and the placement
oI merchandise in the store to attract the consumers attention and stimulate
customers desire.

Result for the keyword. W

ant book
A note book in which store employees record items desired by customers but un
stocked or out oI stock

arehouse Store
A warehouse store is a large Iormat retailer with an every-day-low-price cum
discount oIIer in a no Irills setting. The basic shed-like environment lends it the
name warehouse retailer e.g. Wal-mart.

aterfalls
Wall mounted display Iixtures which are sloping.

heel of Retailing
A theory stating that retail innovators oIten Iirst appear as low-price operators
with a low-cost structure and low proIit margin requirements. Over time these
innovators upgrade the products they carry and improve store Iacilities and
customer services. They then become vulnerable to new discounters with lower
cost structures.

hite goods
ReIers to a category oI products typically large household appliances, as
ovens and reIrigerators, Iormerly Iinished with white enamel, but now oIten
colored.

holesaler
A business intermediary who buys goods in bulk Irom the manuIacturer and re-
sells them to the retailer in smaller quantities. Also known as a Distributor.

idth of Assortment
ReIers to the number oI distinct goods/service categories which a retailer
carries.

ord -of Mouth Communication
ReIers to the passing oI inIormation by verbal means, especially
recommendations, but also general inIormation, in an inIormal, person-to-
person manner. Word oI mouth is typically considered a Iace-to-Iace spoken
communication, although phone conversations web dialogue, such as online
proIile pages, blog posts, message board etc. are now included in the deIinition
oI word oI mouth.

Result for the keyword. Y

Year To Date (YTD)
A term used to describe the perIormance oI a business so Iar in the business
year. For example iI a company works a Jan- Dec year , the sales oI a company
are Rs 60 lacs in the period Jan to May then the YTD sales as oI June 1 are Rs
60 lacs.

Result for the keyword. Z

ero -Based Budgeting
The practice Iollowed when a Iirm starts each new budget Irom scratch and
outlines the expenditures needed to reach its goals during that period. All costs
must be justiIied each time a budget is done