Table of Contents
Table of Contents
Understanding retail terminology is essential for anyone in the industry, from store owners to employees and suppliers. Whether you’re managing inventory, analyzing sales, or optimizing customer experience, knowing the right terms can help you navigate the business more effectively.
In this guide, we’ll break down key retail terms from A to Z, covering everything from merchandising and point-of-sale systems to shrinkage and omnichannel retail. Whether you’re new to retail or looking to expand your knowledge, this glossary will help you stay ahead in the ever-evolving retail landscape.
Retail terminology: A
Average Transaction Value
Average Transaction Value definition: Average Transaction Value is the average amount spent by customers per transaction. It is calculated by dividing the total revenue by the number of transactions.
Assortment Planning
Assortment Planning definition: Assortment Planning is the process of selecting the collection of products that will be available for sale, ensuring the right mix to meet customer demand while maximizing profits.
Retail terminology: B
Brick and Mortar
Brick and Mortar definition: Brick and Mortar refers to physical retail stores with a street presence as opposed to online or virtual marketplaces.
Basket Value
Basket Value definition: Basket Value is the total value of a single customer’s shopping basket or cart, representing the total amount a customer is willing to spend in a single transaction.
Retail terminology: C
Customer Retention
Customer Retention definition: Customer Retention is the process of engaging existing customers to continue purchasing products or services from a business.
Cross-Selling
Cross-Selling definition: Cross-Selling is a sales technique used to get a customer to spend more by purchasing a product that’s related to what’s being bought already.
Retail terminology: D
Dropshipping
Dropshipping definition: Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a product is sold, it purchases the item from a third party and has it shipped directly to the customer.
Dead Stock
Dead Stock definition: Dead Stock refers to inventory that hasn’t been sold or has been sitting in stock for a long time, often due to obsolescence or changing customer preferences.
Discount Abuse
Discount Abuse definition: Discount Abuse occurs when customers or employees exploit discount offers, coupons, or promotional codes in ways not intended by the retailer, such as using them multiple times or combining them in unauthorized ways, leading to revenue loss for the business.
Retail terminology: E
Endcap
Endcap definition: Endcap is a display for a product placed at the end of an aisle, which encourages impulse buying as it prominently features particular products.
E-Tailing
E-Tailing definition: E-Tailing is the selling of retail goods on the Internet, a short form of “electronic retailing”.
Employee Theft
Employee Theft definition: Employee Theft refers to any stealing, use, or misuse of an employer’s assets without permission, which can include stealing physical items, taking intellectual property, misusing time or resources, or embezzling money, negatively impacting the organization’s bottom line.
Elasticity of Demand
Elasticity of Demand definition: Elasticity of Demand measures the change in quantity demanded in response to a change in price, with higher elasticity indicating greater sensitivity to price changes.
Retail terminology: F
Footfall
Footfall definition: Footfall refers to the number of people entering a retail store or shopping area within a given time.
Fulfillment Center
Fulfillment Center definition: Fulfillment Center is a large warehouse designed to receive, package, and ship orders to customers in the most efficient manner.
Frictionless Commerce
Frictionless Commerce definition: Frictionless Commerce is a method of using data from devices, apps, and websites to integrate buying opportunities as simply and seamlessly as possible into consumers’ everyday activities and natural environments.
Retail terminology: G
Gross Margin
Gross Margin definition: Gross Margin is the difference between revenue and the cost of goods sold, divided by the revenue, expressed as a percentage.
Gift Card Breakage
Gift Card Breakage definition: Gift Card Breakage is the amount of gift card value that consumers either lose or do not redeem.
Geofencing
Geofencing definition: Geofencing is a location-based service that triggers a pre-programmed action when a mobile device enters or exits a virtual boundary set up around a geographical location, often used for targeted marketing promotions.
Retail terminology: H
High Street
High Street definition: High Street refers to the main street of a town where most retail stores, banks, and other businesses are located.
Hyperlocal
Hyperlocal definition: Hyperlocal refers to the targeting of consumers within a very specific, localized area, sometimes just a few blocks or streets, often with the use of mobile or location-based services.
Hardlines
Hardlines definition: Hardlines are non-textile goods, such as electronics, appliances, furniture, sporting goods, etc., sold by retailers.
Retail terminology: I
Inventory Turnover
Inventory Turnover definition: Inventory Turnover is a ratio showing how many times a company’s inventory is sold and replaced over a certain period.
Integrated Marketing
Integrated Marketing definition: Integrated Marketing is a marketing strategy featuring a mix of online and offline communication, promotional, and sales activities designed to work together and reinforce each other.
Impulse Purchase
Impulse Purchase definition: Impulse Purchase is an unplanned decision to buy a product or service, made just before a purchase.
Retail terminology: J
Just In Time (JIT)
Just In Time (JIT) definition: Just In Time is an inventory management system where materials or products are produced or acquired only as demand requires.
Juxtapositioning
Juxtapositioning definition: Juxtapositioning in retail refers to placing products next to each other in a store to encourage multi-product sales.
Retail terminology: K
Kiosk
Kiosk definition: A Kiosk is a small, stand-alone booth placed in high-traffic areas for business purposes, usually to dispense information or conduct sales.
Keystone Pricing
Keystone Pricing definition: Keystone Pricing is a pricing method where the retail price is set at double the wholesale price.
Retail terminology: L
Loss Leader
Loss Leader definition: A Loss Leader is a product sold at a loss to attract customers. The strategy is that the lost profit will be recouped as customers buy additional profitable items.
Loyalty Program
Loyalty Program definition: Loyalty Program is a rewards program offered by a company to customers who make frequent purchases, incentivizing customer loyalty.
Lead Time
Lead Time definition: Lead Time is the amount of time that elapses between when a process starts and when it is completed, often used to describe the time between ordering goods and receiving them.
Retail terminology: M
Markdown
Markdown definition: Markdown is a reduction from the original selling price of merchandise, usually to stimulate slow-moving or outdated inventory.
Mobile Commerce
Mobile Commerce definition: Mobile Commerce refers to buying and selling of goods and services through wireless handheld devices such as smartphones and tablets.
Multichannel Retailing
Multichannel Retailing definition: Multichannel Retailing involves selling merchandise or services through more than one channel, such as physical stores, catalogs, and online platforms.
Retail terminology: N
Net Profit Margin
Net Profit Margin definition: Net Profit Margin is the percentage of revenue remaining after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company’s total revenue.
Non-Store Retailing
Non-Store Retailing definition: Non-Store Retailing refers to the selling of goods and services outside the confines of a retail facility, such as online sales, catalog sales, and vending machines.
NFC (Near Field Communication)
NFC definition: NFC is a technology that allows two devices to communicate wirelessly when they are close together, commonly used for contactless payment.
Retail terminology: O
Omnichannel Retailing
Omnichannel Retailing definition: Omnichannel Retailing is a multi-channel approach to sales that seeks to provide customers with a seamless shopping experience, whether they are shopping online, from a desktop or mobile device, by telephone, or in a brick-and-mortar store.
Overhead Costs
Basket Value definition: Basket Value is the total value of a single customer’s shopping basket or cart, representing the total amount a customer is willing to spend in a single transaction.
Open-To-Buy (OTB)
Open-To-Buy definition: Open-To-Buy is the budgeted amount a retailer has available for merchandise purchases at any point in time.
Operational Shrink
Operational Shrink definition: Operational Shrink refers to the loss of inventory or revenue due to internal operational inefficiencies, errors, or mismanagement, such as pricing mistakes, unrecorded markdowns, damaged goods, or administrative errors, which can negatively impact a retailer’s profitability.
Retail terminology: P
Private Label
Private Label definition: Private Label refers to products manufactured by one company for sale under another company’s brand.
Planogram
Planogram definition: A Planogram is a visual diagram that details where every product in a retail store should be placed in order to maximize sales.
Pop-Up Shop
Pop-Up Shop definition: Pop-Up Shop is a temporary retail space that a retailer occupies for a short period, often to test a new market, promote a new product, or take advantage of a seasonal trend.
Price Skimming
Price Skimming definition: Price Skimming is a pricing strategy where a retailer sets a relatively high initial price for a product or service at first, then lowers the price over time as the demand of the first customers is satisfied and competition enters the market.
Personal Shopper
Personal Shopper definition: A Personal Shopper is a person who helps others shop by giving advice and making suggestions, often providing a more personalized shopping experience and assisting customers in making style and fashion choices.
Retail terminology: Q
Quick Response (QR) Code
Quick Response (QR) Code definition: Quick Response Code is a type of matrix barcode that can be read using smartphones and dedicated QR reading devices, linking directly to text, emails, websites, phone numbers, and more.
Quantitative Inventory
Quantitative Inventory definition: Quantitative Inventory is an inventory management approach that focuses on the quantity of products to determine stocking levels, order points, and order quantities.
Queue Management
Queue Management definition: Queue Management involves controlling, or managing, business operations in terms of meeting customer needs and expectations in terms of waiting times.
Retail terminology: R
Retail Therapy
Retail Therapy definition: Retail Therapy refers to the act of shopping to make oneself feel happier.
Return on Investment (ROI)
Return on Investment definition: ROI is a performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the net profit by the initial cost of the investment.
Resale
Resale definition: Resale involves selling used goods or merchandise to consumers, often associated with thrift stores and second-hand shops.
Restocking Fee
Restocking Fee definition: A Restocking Fee is a charge customers must pay when they return an item as a compensation to some retailers for restocking the returned product.
Retail terminology: S
Solink
Solink definition: Solink is a cutting-edge platform integrating video monitoring with point-of-sale (POS) data, enabling retail organizations to optimize security, operations, and gain valuable insights into customer behavior and business performance. Its capabilities in detecting suspicious activities, reducing shrinkage, analyzing trends, and assessing employee performance make it an indispensable tool for fostering the success of retail organizations.
Shoplifting
Shoplifting definition: Shoplifting is the theft of goods from a retail establishment, typically by concealing items on one’s person and leaving the store without paying.
SKU (Stock Keeping Unit)
SKU (Stock Keeping Unit) definition: SKU is a unique identifier that enables a retailer to track each specific product in inventory.
Seasonal Goods
Seasonal Goods definition: Seasonal Goods are products that are traditionally sold during specific times of the year, such as holiday decorations, summer wear, or winter coats.
Shrinkage
Shrinkage definition: In retail, Shrinkage refers to the difference between the amount of stock on the books and the actual stock available, typically due to theft, damage, miscounting, or supplier fraud.
Retail terminology: T
Turnover
Turnover definition: Turnover is the rate at which inventory or assets of a business are replaced or sold within a set period.
Trade Credit
Trade Credit definition: Trade Credit is an arrangement between businesses to buy goods and services on account, without paying cash up front, paying the supplier at a later scheduled date.
TurnoverTraffic Count
Traffic Count definition: Traffic Count is the measure of the number of people who enter a store, mall, or a specific area, often used by retailers to determine potential sales opportunities and assess the effectiveness of marketing efforts.
Time Theft
Time Theft definition: Time Theft occurs when employees are paid for time they have not actually worked, either through intentionally recording inaccurate hours, taking extended breaks, conducting personal business on company time, or other forms of non-productive behavior, leading to operational inefficiency and financial loss for the employer.
Retail terminology: U
Upselling
Omnichannel Retailing definition: Omnichannel Retailing is a multi-channel approach to sales that seeks to provide customers with a seamless shopping experience, whether they are shopping online, from a desktop or mobile device, by telephone, or in a brick-and-mortar store.
Unit Load Device (ULD)
Unit Load Device definition: ULD is a pallet or container used to load luggage, freight, and mail onto aircraft.
Unique Selling Proposition (USP)
Unique Selling Proposition definition: USP is a factor that differentiates a product from its competitors, such as the lowest cost, the highest quality, or the first-ever product of its kind.
Retail terminology: V
Visual Merchandising
Visual Merchandising definition: Visual Merchandising is the practice of displaying products to highlight their features and benefits, with the aim of attracting, engaging, and motivating the customer towards making a purchase.
Vertical Integration
Vertical Integration definition: Vertical Integration is a strategy whereby a company owns or controls its suppliers, distributors, or retail locations to control its value or supply chain.
Vendor Management
Vendor Management definition: Vendor Management involves controlling costs, driving service excellence, and mitigating risks to gain increased value from vendors throughout the deal lifecycle.
Variable Pricing
Variable Pricing definition: Variable Pricing is a strategy where a retailer changes the price of a product or service based on its demand, supply, and other external factors.
Retail terminology: W
Wholesale
Wholesale definition: Wholesale refers to the selling of goods in large quantities to be retailed by others.
White Label
White Label definition: White Label products are sold by retailers with their own branding and logo but are manufactured by another company.
Window Display
Window Display definition: Window Display is a collection of objects or products strategically arranged in a store’s front window to attract consumers.
Retail terminology: X
X-Stock
X-Stock definition: X-Stock refers to products that are marked as surplus, and it often includes goods that are obsolete, seasonal, or slightly damaged, and are typically sold at a discounted price.
X-Bar (Crossbar)
X-Bar definition: In retail, X-Bar or Crossbar refers to a fixture used in stores to display and hold merchandise, typically used for hanging clothes.
Retail terminology: Y
Yield
Yield definition: In retail, Yield refers to the amount of profit earned from selling a product, calculated by subtracting the cost of goods sold from the retail price.
YOY (Year Over Year)
YOY definition: Year Over Year is a comparison of a retail business’s performance or financials in a certain time period compared to that same time period the previous year.
Yield Management
Yield Management definition: Yield Management is a pricing strategy, often used by retailers, to maximize profitability by adjusting prices based on demand, inventory levels, and other factors.
Retail terminology: Z
Zone Pricing
Zone Pricing definition: Zone Pricing is a pricing strategy in which the same product has different prices in different geographic locations, usually reflecting variations in competitive situations and cost structures.
Zero-Sum Game
Zero-Sum Game definition: In retail, a Zero-Sum Game refers to a situation in which a gain by one company or individual results in an equal loss by another.
Navigating retail success
This retail dictionary from A to Z serves as your comprehensive guide to the multifaceted world of retail. By understanding and leveraging the terminologies and concepts detailed within, from Assortment Planning to Zone Pricing and beyond, individuals and organizations alike can navigate the retail landscape with confidence and proficiency. Here’s to empowering your retail journey and achieving unparalleled success in the competitive market!
To see how Solink gives you eyes on your entire retail enterprise, sign up for a demo today.
