Retail Dictionary

A

• AOV (Average Order Volume): The average amount spent by customers in a single transaction.
• Assortment SKUs Count: The total count of stock keeping unit (SKU), i.e., the number of styles that a brand offers within a dataset.

B

• Brand Equity: The value derived from consumer perception of the brand name of a particular product or service, rather than from the product or service itself.

C

• Carryover Inventory: Products from a previous season that are stored for future collections to prevent overstocking and manage buying budgets effectively.
• CRO (Conversion Rate Optimization): The process of increasing the percentage of users who perform a desired action on a website.
• C (Cost of Goods Sold): The direct costs attributable to the production of the goods sold by a company.

D

• DaaS (Data as a Service): A model where data is provided on demand to the user, regardless of geographic or organizational separation of provider and consumer.
• Demand-Driven Merchandising: Strategies that focus on aligning product offerings with current market demand, utilizing data analytics to inform buying and pricing decisions.

E

• EPC (Electronic Product Code): A universal identifier that provides a unique identity for every physical object anywhere in the world, for use in RFID.
• EOL (End of Life): The phase in a product's lifecycle indicating the product is at the end of its useful life from the vendor's point of view.
• EDLP (EveryDay Low Price): A pricing strategy promising consumers a low price without the need to wait for sale price events or comparison shopping.
• EAN (European Article Number): Now called International Article Number, it's a standard describing a barcode symbology and numbering system used in global trade to identify a specific retail product type.
• Escapism Fashion: Trends that allow consumers to detach from reality, often influenced by media, outdoor activities, or a desire for adventure.

F

• Fashionability: The attributes of a product that determine its perceived value and price, often used in the ‘good-better-best’ pricing strategy.

G

• Good-Better-Best Pricing: A pricing strategy that sets prices in tiers based on the perceived value of an item, with higher prices for products with better attributes.

I

• IPQ (Initial Purchase Quantity): The amount of product a retailer buys to start selling a new item.
• Inventory Ageing: The segmentation of inventory based on age to spot issues and manage stock levels efficiently.
• ISBN (International Standard Book Number): A numeric commercial book identifier which is intended to be unique.

K

• KPI (Key Performance Indicator): A measurable value that demonstrates how effectively a company is achieving key business objectives.

L

• LTV (Customer Lifetime Value): The prediction of the net profit attributed to the entire future relationship with a customer.
• LBO (Leveraged BuyOut): The acquisition of another company using a significant amount of borrowed money to meet the cost of acquisition.

M

• MSRP (Manufacturer Suggest Retail Price): The amount of money for which the company that produces a product recommends that it be sold in stores.
• MRP (Maximum Retail Price): The maximum price at which a product can be sold to a customer, inclusive of all taxes.
• MAP (Minimum Advertised Price): The lowest price a retailer can advertise the product for sale, as mandated by the manufacturer.
• Markdown Cycle: The sequence and depth of markdowns determined by the length of time products have been in stock, aimed at clearing aged inventory.
• Median Price: The middle value in a list of numbers, used to understand the central tendency of retail prices in a dataset.
• Mean Price: The average price of products in a dataset.
• Product Matching: A process of comparing similar products across different retailers or platforms to ensure competitive pricing and product offerings.

O

• OTB (Open To Buy): A budget for retail merchandise that a retailer can spend in a specific period without overstocking.
• OOS (Out of Stock): A situation when the inventory of a product is depleted and it is not available for sale.

P

• PLU (Price Look Up): A code used in supermarkets to ring up fresh produce and other items that do not have a barcode.
• POP (Point of Purchase): The physical location where consumers decide whether or not to buy a product.
• POS (Point of Sale): The time and place where a retail transaction is completed.
• POSA (Point of Sale Activation): A technology that allows cards that are sold inactive to be activated upon checkout.
• Perceived Value: The value that a customer believes a product has, which can influence pricing strategies and product positioning.
• Price Index: A measurement that shows how the average price of a set of goods changes over time.

R

• RFID (Radio Frequency Identification): A technology uses electromagnetic fields to automatically identify and track tags attached to objects.
• RRP (Recommended Retail Price): The price which the manufacturer recommends that the retailer sells the product.
• RSI (Retail Sales Index): An index of the total dollar value of all sales in the retail sector, except for services and automotive.

S

• SG&A (Sales General & Administrative Costs): The sum of all direct and indirect selling expenses and all general and administrative expenses of a company.
• SKU (Stock Keeping Unit): A unique identifier for each distinct product and service that can be purchased.
• Staggered Markdown Method: A discounting strategy that determines the depth and timing of markdowns by the length of time the products have been in stock.

T

• Taxonomy: The practice of classifying and organizing retail products in a consistent and robust way, often using image and text recognition software.
• Trend Score: The average popularity score in the last 6 months, indicating the relative popularity of a category compared to others.

U

• UPC (Universal Product Code): A barcode symbol that is widely used in the United States and in other countries for tracking trade items in stores.

V

• Visual Merchandising: The practice of displaying products according to well-planned themes to captivate consumers and encourage purchases.

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