Retail Glossary of Terminology

What is an Add-on?

Definition: Add-ons are additional merchandise that could be added-on to the

sale and purchased by the customer.

What is a Barcode?

Definition: A Barcode is an encoded set of lines and spaces of different widths

that can be scanned and interpreted into numbers to identify a product.

Alternate Spellings: Bar-code

General Use: Scanning, identification.

What is a Brand ?

Definition: A brand is a name, logo, slogan, and/or design scheme associated

with a product or service. Brand recognition and other reactions are created by
the use of the product or service and through the influence of advertising, design,
and media commentary. A brand is a symbolic embodiment of all the information
connected to the product and serves to create associations and expectations
around it. A brand often includes a logo, fonts, color schemes, symbols, and
sound, which may be developed to represent implicit values, ideas, and even
personality.

What does Colorize mean?

Definition: Colorize means to display merchandise by color, hue or intensity.

General Use: Visual Merchandising

What is a Consumer?

Definition: A consumer is an individual who utilizes economic goods.

What is a Customer?

Definition: A customer is a person that purchases merchandise or a service.

What is Cost?

Definition: A retailer's cost is the amount paid to obtain an item from a supplier.
It is the wholesale price that a retailer pays.

What is CRM?

Definition: CRM, or Customer Relationship Management, is the business

strategies designed to optimize profitability, revenue, retention, and customer
satisfaction. When used to describe software, rather than business processes,
CRM applications are those that focus on relationships, rather than transactions.

Also known as: Customer Relationship Management

What is a Dump Display?

Definition: A dump display is merchandise displayed by being dumped or

heaped in a pile, usually in a bin or on a table.

Also Known As: Bulk Dump Display, Dump Table Display

General Use: Product merchandising and visual display.

What is Goodwill?

Definition: Goodwill is an intangible asset of a business that is derived from its

reputation, products, or services.

What is Gross Margin?

Definition: Gross Margin is the profit before deducting operating expenses.

What are Impulse Goods?

Definition: Impulse Goods are products generally purchased without prior

planning. Impulse Goods can also be used to describe products placed for
impulse purchasing at the check-out areas of the store.

What is Inventory?

Definition: Inventory is merchandise in-stock and on hand.

Also Known As: Stock

What is Inventory?

Definition: Inventory is merchandise in-stock and on hand.

Also Known As: Stock

What is Inventory Shrink?

Definition: Reduction in physical inventory caused primarily by shoplifting and

employee theft.

What is a Kiosk?

Definitions:

1. A kiosk is a display showing location of departments or stores.

2. A kiosk is an interactive display or terminal giving access to an Intranet or to

the Internet from inside a store for ordering or checking on merchandise.

3. A kiosk is a small leased area, booth, or cart inside a store or mall

What is a Warranty?

Definition: A warranty is a written guarantee of a manufacturer's or retailer's

responsibility. A limited warranty is a statement of under what conditions and for
how long a manufacturer guarantees that an item will work or repair/replace if
there is a problem.

General Use: A warranty is used to help consumers feel confident that they
products they purchase will will work as designed or the problem will be
corrected.

What is Loyalty?

Definition: Loyalty is being faithful to a particular store or brand.

What is Loss Prevention?

Definition: Loss prevention is stopping or reducing loss of from shoplifting,

employee theft, paperwork errors and poor safety procedures. Guarding and
securing the assets of a company.

Also Known As: LP, Asset Protection, Security

Mall
A combination of many stores designed to serve a large geographic area
Manufacturer
Producer of products that people buy.

Mapping
The process of determining locations and adjacencies of departments and
merchandise inside a store.

Markdown
A reduction in selling price.

Markup
The difference between the selling price and the cost of an item.

Mazur Plan
Divides all retail store activities into four major areas: of merchandising, publicity,
store management, and control.

Merchandising
Buying and selling of goods.

What is a Merchandise Credit?

Definition: A Merchandise Credit is a store voucher good for merchandise that is

given for returns instead of cash.

Also Known As: Merchandise Voucher, Store Cash, Store Credit, Store
Voucher

General Use: Most frequently used when an item is returned without a receipt or
past a store's cash refund period.

What is Narrow and Deep?

Definition: Narrow and Deep is an assortment approach where a retailer sells

only a few selections of merchandise, but they are stocked in depth.

General Use: Assortment Planning

Also Known As: Product Depth

What is Non-Marking?
Definition: Non-Marking is a policy where prices are not marked on the
merchandise.

What is a No Frills Retailer?

Definition: A No Frills Retailer is a retailer whose facilities are minimal and

prices are low.

What is Objective-and-Task Method?

Definition: The Objective-and-Task Method is a budget technique that relates

the advertising budget to the sales objective.

General Use: Advertising budget preparation.

What is an Odd Price?

Definition: An odd price is a price just below an even dollar or cents amount,
such as $1.99 instead of $2.00.

General Use: Used to give an illusion of value.

What is Operations?

Definition: Operations is the part of store management that maintains the

facilities, and directs sales supporting activities and customer services.

General Use: Support and facilities management.

What is Initial Markup?

Definition: Initial markup is the first markup on an item from cost to retail price.

Also Known As: Original Markup

What is Percentage-of-Sales Method?

Definition: The Percentage-of-Sales Method is budgeting for an ad based on a

percent of a sales figure, such as past sales, anticipated sales, or a combination
of both.

General Use: The percentage-of-sales method is the most commonly used

method of preparing an advertising budget.

What is a Periodic Inventory?

Definition: A periodic inventory is a method of finding the value of merchandise
at periodic intervals by taking a physical count of the stock.

Definition: What is Perpetual Inventory?

Perpetual Inventory is a method for tracking and knowing the value of inventory
and quantity of merchandise on hand at any time by tracking sales, returns and
receipts with information systems.
Also Known As: Book Inventory

What is Physical Inventory?

Definition: Physical Inventory is physically counting the individual items in stock

at a particular date and time.

Definition: What is a Plano gram?

A Plano gram is a schematic drawings of fixtures that illustrate product
placement.
Also Known As: POG, P-O-G, plan-o-gram
Examples: The visual merchandiser is setting the Plano gram.

What is Push Money?

Definition: Push Money is a cash premium, prize, or additional commission for

pushing or increasing sales of a particular item or type of merchandise.

Also Known As: PM, Spiff

General Use: Employee sales incentive.

What is a Price War?

Definition: A Price War occurs when a retailer under prices the competition,
which can create a cycle of two or more retailers lowering prices in turn to
undercut the other.

What is Promotional Advertising?

Definition: Promotional Advertising is advertising to draw customers to the store

by highlighting items and pricing.

What is Promotional Advertising?

Definition: Promotional Advertising is advertising to draw customers to the store

by highlighting items and pricing.

What is Push Money?

Definition: Push Money is a cash premium, prize, or additional commission for
pushing or increasing sales of a particular item or type of merchandise.

Also Known As: PM, Spiff

General Use: Employee sales incentive.

What is Put-Away?

Definition: Put-Away is placing received goods into the warehouse storage area.

What is a Quantity Discount?

Definition: A quantity discount is a discount based on the volume of purchase.

Also Known As: Bulk purchase discount

Rack Jobber
A wholesaler that is allowed by a store to install, stock, and replenish selected
items on display racks.

Receipt of goods / ROG

The cash discount period for payment begins with the retailer's receipt of
merchandise.

Referral Premium
A gift that is awarded to customers who refer potential new customers.

RFM
Recency, frequency and monetary value. Used to determine the value of a
particular customer's business. Related term: CLV.

Refund
Money or charge credit given to customer, generally for return of merchandise.

Reserve Stock
Merchandise that is stored in an area inaccessible by customers.

Retail Display Allowance / RDA

An additional discount off the cover price of a magazine for guaranteeing
adequate display of the magazine. The RDA is paid on top of the normal discount
off of the cover price.

Retail Merchandise Management System / RMM

A system that tracks the performance of merchandise, reordering good sellers
and identifying poor sellers, enabling store buyers to make timely merchandise
decisions.
Retail Method
A method for estimating the cost of an ending inventory on the basis of a ration of
the cost of the goods available for sale relative to the retail price of the goods
available for sale.

Retail price
Price placed on an item or service for sale to the consumer.

Retailer
An individual or firm that sells goods and services directly to the consumer.

Retailing
The selling of goods and services to the consumer.

Rotate stock
Stock new merchandise behind old merchandise when filling displays. In some
cases this also means replacing old stock completely with new stock.

Salary Supplement
Money or prizes offered to salespeople as an incentive to increase sales of a
particular type of merchandise.

Sales Forecasting
Estimating future sales volume on the basis of current sales figures and
information from manufacturers, wholesalers, accountants, economists, and
bankers.

Sales per square foot of selling space

Net sales divided by the square feet of selling space.

Sales Promotion
Methods used to generate sales, attract customers to the store, build loyalty, and
promote goodwill.

Salvage goods
Merchandise that has been damaged in transit or storage.

What is a Daily Sales Audit?

Definition: A daily sales audit is the review of daily sales journals against the
receipt of funds.

General Use: Verification and reconciliation of cash registers and receipts.

Also Known As: Sales Audit

Scrambled merchandising
Increasing the types of goods that have traditionally been carried by a store.

Seasonal discount
A trade discount given to retailers willing to order, receive, and pay for goods
during the "off season."

Seasonal merchandise
Products that are in demand at a certain time of the year, such as Christmas or
Back-to-School.

Self-liquidator premium
An item of merchandise sold, usually at cost, to a shopper after he or she has
bought a product or tried a new service.

Self-service
Customers select items from open displays and take them to the register for
purchase.

Shrinkage
Merchandise losses due to shoplifting, internal theft, damages, paperwork errors,
etc.

Signage
Signs, labels, shelf tags, and other identification signs to provide directions,
prices, or information on merchandise or policies.

SKU / Stock Keeping Unit

An identification number assigned to a unique item by the retailer. The SKU may
be an internal number to that retailer or may be tied to an item's UPC or EAN.

Special Order
A custom or one-off order for a specific customer, usually of a product not carried
in normal inventory.

Specification buying
A system in which buyers develop product specifications for their purchases
rather than selecting from what is already available in the market.

Staples
Products that are constantly in demand and infrequently influenced by fashion
changes.

Statistics
A set of tools for collecting and summarizing data, and for using the data to draw
inference from the population, which it is supposed to represent.
Step Theory / AIDA
A view customer decision making where the choice to buy or not follows these
steps: attention, interest, desire, action.

Stock turnover
A measure for determining how quickly merchandise is being sold.

Stuffers
An advertising piece that accompanies a billing statement or is placed in
shopping bags.

Syndicator
A retailer that sells goods and services in conjunction with credit card companies

What is Suggestive Selling?

Definition: Suggestive Selling is when the salesperson suggests additional items

that are related to the original item being purchased.

Also Known As: Adding-on, Suggestion Selling

Target Market
A defined group of consumers whom the retailer tries to satisfy.

Tear sheet
An actual copy of an advertisement.

Theme display
A display designed with an idea as a selling theme to stimulate the interest of the
customer.

Trade discount
A reduction in list price given by vendors to volume purchasers.

Trading post
A place where trade may be carried on, by barter or cash, usually in a sparsely
populated area.

Trading up
Selling where the salesperson persuades the customer to buy a more expensive
item or a larger quantity than originally intended.
Trunk show
Vendors present their merchandise directly to store personnel and/or customers
in the store.

What is Unit Control?

Definition: Unit control is a system for gathering information about inventory by

recording the stock in terms of units of merchandise.

What is the Unit-of-Sales Method?

Definition: The Unit-of-Sales Method is a way of preparing an advertising budget

on the basis of the unit, or number, of sales rather than dollar amounts, with a
fixed sum set aside for each unit expected to be sold.

General Use: The unit-of-sales method is used for advertising budget

preparation

What is a Universal Product Code?

Definition: The Universal Product Code is a standard for encoding a set of lines
and spaces that can be scanned and interpreted into numbers to identify a
product.

Also Known As: UPC

General Use: Scanning, item level inventory and identification. UPC-A is the
most common barcode used in retail product marking in North America.

What is Universal Vendor Marking?

Definition: Universal Vendor Marking is the pre-marking of merchandise by

manufacturers that can be read by people and machines.

Also Known As: UVM

What is Universal Vendor Marking?

Definition: Universal Vendor Marking is the pre-marking of merchandise by

manufacturers that can be read by people and machines.

Also Known As: UVM

What are Vendor-Supplied Fixtures?

Definition: Vendor-Supplied Fixtures are display equipment provided by

distributor or manufacturer.
General Use: Vendor-supplied fixtures are used for Plano gram or point-of-
purchase merchandise displays.

What is the Wheel of Retailing?

Definition: The Wheel of Retailing is a theory to explain the institutional changes

that take place when innovators enter the retail arena.

What is a Wholesale Club?

Definition: A Wholesale Club is a retail store that sells a limited assortment of

merchandise to customers who are "members" of the club. Memberships are
generally fee-based, margins are small and there is usually little service provided
to the members in return for the low prices.