Each year we work with retailers and help them hit ASD Market Week show floors running. We share how to prepare, what to bring, and what to ask vendors to provide in order to best sell the products they order at the show. Exhibitors, on the other hand, ask for help on how to best provide what those retailer buyers require. This often involves an understanding of retail terminology – and often, these terms are not always known.
To help, we’ve outlined the top 25 retail terms every exhibitor needs to know:
- Add-On Sale. Items customers buy in addition to items they originally came in to purchase because a store associate suggested that they buy them. Adding-on is an easy way to increase your average sales and store profits.
- Allowance. Price reductions that are taken for numerous reasons, including but not limited to: damaged or discontinued merchandise, floor samples, or late delivery of product.
- Big Data. Large amounts of data that is analyzed to reveal patterns and trends that relate to human behavior and interactions. Datamay include online consumer behavior such as clicks, open rates, the length of time a person spends on a website, income, and Census info, as well as what happens on social media. Big Data is often referred to as “Analytics on steroids”.
- Branding. A brand is not a logo or slogan or merely the name of a store. A brand is the emotional connection – the physical reaction – customers feel when they hear your name, see your logo, visit your website, or walk in your front door or booth. It’s the concept you own in the mind of the customer; it’s the experience they can get only from you.
- Break Even Point. The point where your sales are equal to your expenses. In other words, when a store has no profit and no loss.
- Charge Back. A deduction taken by a retailer on an invoice to account for instances including freight allowances, short orders, or damaged merchandise and more.
- Cash Flow. Money that comes in to a store, and goes back out again, resulting in available cash.
- Customer Relationship Management (CRM). A business strategy utilizing techniques designed to build profit by keeping customers loyal to a store.
- Demographics. The population categorized in groups by age, gender, income, occupation, education, religion, race, family size, life style, and more. Understanding demographics is helpful in determining which products and services to offer to the various consumers in a community.
- Drop Ship. Items not stocked by a retailer that are shipped to the consumer directly from the manufacturer or distributor.
- Factor. A bank or finance company that buys the receivables from a manufacturer. Retailers pay the factor for goods purchased instead of paying a vendor directly.
- Flow. How shoppers move through a store. People shop a store’s sales floor according to how fixtures are set, creating flow.
- GMROI. Gross Margin Return on Investment is commonly defined as “an inventory profitability evaluation ratio that analyzes your store’s ability to turn inventory into cash above the cost of the inventory”.
- Inventory Turnover. “Turn” is the amount of times in a specific time period that inventory is sold and replaced with fresh product.
- Keystone. The retail price charged for an item that is double the wholesale price.
- Loss Leader. An item that is sold at a loss in order to attract more shoppers to the store.
- Margin. The amount of gross profit that is made when an item is sold.
- Markdown. The permanent lowering of the price of a product because it did not sell at full price. Markdowns are necessary in retail to clear inventory and make room for new items.
- Omni-Channel Retailing. Establishing a retail presence on several channels and/or platforms. For example, having a brick and mortar store, an online store, mobile ordering capabilities, online services, etc. that enable customers to engage and interact with a retailer across several channels.
- Open to Buy (OTB). Merchandise that is budgeted for purchase during a specific period of time that has not yet been ordered. OTB helps retailers budget and plan for future purchases. Retailers typically come to ASD Market Week with a specified Open to Buy dollar amount.
- Profit Margin. The amount out of every dollar of sales a business actually keeps as earnings.
- Purchase Order (P.O.). The form retailers use to place orders for goods and/or services. P.O.’s list the type, quantity, and agreed upon price for goods and/or services the seller will provide to the buyer. (Note: We always recommend that retailers use their own P.O. when placing an order.)
- Radio Frequency Identification (RFID).A chip embedded in an item’s label or packaging that contains important information about the product. It is used primarily for tracking purposes.
- Shrinkage. The difference between the amounts of merchandise a store shows on paper and the physical stock on the sales floor and/or back room. This difference is generally caused by shoplifting, employee theft, and administrative errors.
- Stock-Keeping Unit (SKU). An item’s identification code that can be found on tags and/or bar codes that help the retailer track the item for inventory. A SKU lists the important attributes of an item, such as style number, vendor, size, color, etc.
There are many more retail terms… and more are added each week as new technologies are introduced. Be sure you keep up with all that retail and ASD has to offer by attending the upcoming ASD Market Week in Las Vegas! Gain more insight here!
Take advantage of ASD Market Week’s 90+ free retail strategy sessions in Las Vegas!
Contributed by Rich Kizer & Georganne Bender. Kizer & Bender are professional speakers, authors and consultants whose client list reads like a “Who’s Who” in business. Companies internationally depend upon them for timely advice on consumers and the changing retail market place. They are widely referred to as consumer anthropologists because they stalk and study that most elusive of mammals: today’s consumer. KIZER & BENDER are well known for their unique and intensive consumer research. Any speaker can talk about customers, but Georganne and Rich actually become them. In addition to yearly focus groups, one-on-one interviews, and intensive on-site studies, their research includes posing as every kind of customer you can imagine; and maybe even a few that you can’t. The results of their research is literally straight from the customers’ mouth: solid ground level intelligence you can use to better serve your own customers. KIZER & BENDER’s presentations blend brilliant content with colorful examples, humor and insight. You’ll learn while you laugh! And you’ll come away with inspiration, strategies, tactics, tips and techniques you can use the second you return to your business!