Sharpen your retail vocabulary with Retail Dictionary
Every word has its impact. Learn every jargon in retail and how it helps the business.
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Auto-Replenishment System (ARS)
Noun:
An Inventory Management System that lets retail companies recharge the distributor’s inventory when it goes below the set requirements.
ARS continuously analyzes the sales data for each SKU to ensure that there are no stockouts, stockpiling or expiry returns.
Average Order Value
Noun:
AOV = Revenue/ Number of Orders
The average amount of money spent by customers while ordering from a merchant over a period of time.
This helps businesses determine how much revenue they are earning by selling to distributors & retailers, and also know who are the best buyers.
Bottomline
Noun:
An expression in business that refers to the final profit or loss of a company after all revenues, expenses, taxes, and other financial considerations.
In retail, increasing the bottomline refers to increasing the revenue of the company.”
Bizom
Noun:
The retail intelligence platform that digitally transfoms distribution through sales force automation and real-time analytics.
Bizom connects each node of downstream supply chain briniging end-to-end market visiblity and insights.
Credit Note
Noun:
A commercial receipt or voucher issued by the seller to the buyer, against product(s) the buyer has returned.
This document issues the same credit value to the buyer as that of the product returned, allowing the seller to change an invoice legally.
Drop Size
Noun:
The total product units sent to an outlet in a single delivery.
Drop size gives salesmen an estimate of how much sales each channel partner brings in.
Debit Note
Noun:
A commercial receipt issued by the seller to the buyer, informing them of unpaid debt to the seller, for products bought on credit.
Alternatively, it can also be issued by the buyer while returning products that have already been paid for.
E-tail
Noun:
The sale and purchase of retail products on the world wide web.
Many modern businesses today start selling on e-tail stores before their products find space in retail stores.
Fill Rate
Noun:
Fill Rate = (Orders fulfilled ÷ Orders received) X 100
The percentage of the order that can be fulfilled by providing immediate available stock, without causing any loss in sales.
Managing the fill rates can help companies meet their customer’s expectations, improve inventory management and plan production more coherently.
Grammage
Noun:
A term used in to describe the weight of a packaged product.
In retail, grammage reduction is a common practice done by companies to meet the the rising inflation without increasing prices.
Hypermarket
Noun:
A large retail store that combines the features of a supermarket and a department store.
Hypermarkets are known for their extensive product selection and often include additional services such as cafes, pharmacies, and sometimes even entertainment areas, providing consumers with a wholesome shopping experience. “
Inventory
Noun:
The stock of goods that a business holds at a certain time for the purpose of resale, production, or operational use.
Inventory management is a critical aspect of retail, as it involves tracking, organizing, and controlling the flow of goods to ensure that a company maintains an appropriate level of stock to meet the customer demand, while minimizing carrying costs.”
Just-in-time
Noun:
A manufacturing and inventory management strategy that aims to minimize waste and increase efficiency.
This method denotes that raw materials or goods should be received exactly when they are needed, to avoid excess inventory or idle storage.
Kirana
Noun:
A term commonly used in India, to refer to small, neighborhood convenience stores or grocery shops that make up unorganzied retail.
These mom n pop shops are typically independently owned and operated and serve as essential retail outlets in local communities, offering a wide range of everyday goods and household essentials.
Load-in
Noun:
The process of loading stock from a sales van to the distributor’s inventory.
This helps the van salesmen keep track of the products and quantities that have been sold VS the remaining unsold stock.
Load-out
Noun:
Process of loading the sales van with different product units, to be sold in the local markets.
This helps the warehouse or distributor manager track product inventories and allocate products to different salesmen for sale at the start of the day.
Merchandising
Noun:
The practice of displaying products lucratively at retail stores to increase product sales.
Merchandising consists of different techniques to make products more eye-grabbing and appealing to consumers.
Net Sales
Noun:
The total amount of money generated by a business from selling goods or services to customers.
Net Sales is calculated after deducting any allowances for returns, discounts, and allowances. In other words, it represents the actual income a company earns from its core business activities, excluding any deductions or adjustments.
Net Promoter Score
Noun:
Net Promoter Score = The percentage of promoters – percentage of detractors
A widely used metric by businesses to measure customer loyalty and satisfaction with a company, product, or service.
NPS helps assess the health of customer relationships, identify areas for improvement, track changes in customer sentiment over time and how likely they are to recommend the business to others.
O2O Commerce
Noun:
A business strategy used for attracting online prospects to step into a physical store and buy products.
O2O Commerce motivates shoppers to step out of online interactions and explore the brand and its products more extensively, in-store.
Productive Call
Noun:
(Total outlets the salesman called) – (Total outlets that did not place an order)
This formula measures how well each salesman is performing everyday.
PJP (Permanent Journey Plan)
Noun:
A daily route plan for the travelling salesmen, telling them which retail stores they need to visit today.
PJP keeps the salesmen informed on how many outlets they must visit every day, ensuring their productivity remains high.
Primary Sale
Noun:
The first sale of the product made by the manufacturer to the distributors.
This is the fist step the product takes to reach the consumer market, and is also the fastest way for the manufacturer to realise revenue.
Product Category Volume
Noun:
Total units of category products sold at a retail store x 100 ÷ Total units of category products sold
The percentage sales of a particular product category from each retail outlet.
This helps determine the success of product GTM and take proactive actions to meet set goals.
Point of Purchase
Noun:
A physical location in shops where potential consumers interact with the product and considers buying it.
POP displays help businesses to boost their sales and increase product presence in consumer lives.
Quality Purchase Scheme
Noun:
A strategic trade scheme with a primary objective of stimulating sale of FMCG products.
This trade scheme is systematically introduced to both retailers and wholesalers, to facilitate higher volume sales, fostering stronger partnerships between suppliers and distributors.
Quality Purchase Scheme
Noun:
A strategic trade scheme with a primary objective of stimulating sale of FMCG products.
This trade scheme is systematically introduced to both retailers and wholesalers, to facilitate higher volume sales, fostering stronger partnerships between suppliers and distributors.
Stock Keeping Unit (SKU)
Noun:
It is a unique code given to each variety of item in the inventory.
SKUs help in tracking the movement and performance of different products throughout the supply chain.
Sales Return
Noun:
When the buyer returns goods to the seller in exchange of refund or credit.
Sales return usually happens when retailers and distributors get defective or excess products which they do not want to stock.
Trade Promotions
Noun:
A marketing strategy where retail companies use promotional schemes and discounts to increase product sales.
Companies provide channel partners and customers different offers to entice them to shop more, offline & online.
Tertiary Sale
Noun:
When the retailer sells the product to the consumer for their personal use.
Essentially, a retail transaction aids in tracking the product’s demand in the market and helps in understanding customers’ choices and preferences.
Unified Commerce
Noun:
The practice of connecting the backend of different selling channels into a single platform.
This helps companies manage and maneuver their products, promotions, and inventories across different sales channels, from one location.
Van Sales
Noun:
A type of selling in retail where mobile or on-the-go sales are necessary.
In Van Sales, a company’s sales representatives or agents travel to various locations in specially equipped vans or vehicles to directly sell products to retailers.
Value Chain
Noun:
A sequence of critical activities that facilitates the sale of products to consumers, with each step contributing value to the overall process.
This value chain is comprised of four stages: product creation, inventory management, distribution logistics, & product accessibility.
Weighted Distribution
Noun:
The allocation or distribution of products or goods based on specific criteria or factors.
This can include assigning different weights to different regions, customers, or distribution centers, to determine how to distribute products most effectively.
Wholesale
Noun:
The sale of goods or merchandise in large quantities, typically to retailers or distributors for the purpose of resale or further distribution.
Under this business model where goods are purchased in bulk at a lower unit cost than if they were bought individually.
X Sell Ratio
Noun:
X sell ratio 0r Cross-sell ratio is used to assess the effectiveness of cross-selling efforts.
It measures the success rate or percentage of customers who, in addition to their initial purchase, also choose to buy additional or complementary products or services.
YoY
Noun:
A commonly used financial and performance measurement term that compares data of a period with the same period last year, to assess growth, changes, or trends.
YoY comparisons are critical to understand whether performance is improving, declining, or remaining stable, allowing for more informed decision-making and strategic planning.
Year End
Noun:
The conclusion of a calendar or fiscal year.
It is the last day or the period immediately preceding the beginning of a new financial year, used for various calculations, including financial reporting, accounting, tax assessment, and business planning.
Zone
Noun:
Zones are strategically designed on planograms to enhance the shopping experience, improve product visibility, boost sales, and guide customers through the store.
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