The 40 Retail Terms All Modern Point of Sale Retailers Should Know

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Publié par	seorumer
Publié le	18 juin 2015
Nombre de lectures	2
Langue	English

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The 40 Retail Terms All Modern Point of Sale Retailers Should Know It has been said that approximately 4,000 words are added to the English dictionary every year. Incidentally, chief executive of Oxford University Press, Nigel Portwood, feels it unlikely that it will ever be printed again. This is obvious when you consider that the second edition, published in 1989, was an astounding 21,728 pages filling 20 volumes. With modern technology, Webster’s Dictionary has about 2 million visitors each month so in no way are they moving into obscurity, but they are proving to be eco-friendly (and eco-friendly was added to the dictionary in 1989 in case you were wondering). And speaking of new words, many of them are based on the fascinating technology obsessed world we live in. Regardless, if you have a degree in business or extensive experience in management, there are mountains of new terms that are hitting the retail world. So sit back and buckle up as we quickly and concisely get you up to date on the latest lingo in capitalism. Anchor Store- Also known as “draw tenant”, “anchor tenant”, or “key tenant”, an anchor store is one of the largest (or the largest) store in a mall or shopping center. It’s tends to be a well-known department store or retail chain with the benefit of bringing in a ton of foot to neighboring small or medium retailers. Big Box Store– As its name indicates, big box store is an enormous square or rectangular shaped establishment, which is usually part of a major retail chain. Examples of such stores include Target, Home Depot, and Best Buy. Big Data- This refers to sets of data so detailed and extensive that it would take sophisticated programs and genius data scientists to make sense of it all. When you’re dealing with Big Data, you’re not just looking at traffic or conversions; you’re analyzing behavior (clicks, open rates, time spent on site), demographic (Census information, income), social information (tweets, shares, etc.), timing, and a plethora of additional configurations. Think of it as analytics on steroids. Brick and Click- This term refers to retailers that conduct business in their brick and mortar store with conjunction with their ecommerce site. Most brick and click companies include seamless web-to-store services such as in-store pick ups and returns. Cashwrap- This is the main checkout area of a retail store. Basically, this is where shoppers head to when they’re ready to pay for their items. It’s where merchants set up their POS system and ring up sales. This also includes the shelves containing impulse merchandise that shoppers can pick up on their way out.

Click and Collect- This is a service that retailers provide so that shoppers can purchase items online and pick them up in their physical stores. Like Bricks and Clicks, Click and Collect stores put the best of two channels (ecommerce + physical retail) together. Customers are increasingly drawn to this form of shopping since they can make a purchase from the comfort of their own home, pick up the item whenever it’s convenient for them, and avoid paying costly shipping fees. Cross Merchandising- This refers to the tactic of displaying or grouping products from different categories together to drive add-on sales. For example, if you’re at the grocery store browsing the liquor section, you might see a pack of lemons tacked to the tequila shelf. This is cross merchandising in action. Groceries know that people often take lemons with their tequila shots, so they strategically display the two items together. Dead Stock- Sometimes called dead inventory, this is one thing no retailer wants to have, ever. Dead stock refers to merchandise that has never been sold or has been in inventory for a while. It may be because a particular item is seasonal, but other times it’s because the product simply isn’t in demand. Drop Shipping- This refers to an agreement between a retailer and a manufacturer/distributor in which the retailer accumulates customer orders and passes them to the manufacturer/distributor who then ships the merchandise directly to the consumer. Simply put, the retailer doesn’t keep products in stock. Instead, it sends orders and shipment information to the manufacturer/distributor and they will be the ones who will ship to the consumer. Dynamic Clustering– With the increase in e-commerce, many businesses found that they have a fragmented customer base (i.e. their customers are scattered across different locations or fall under various socio-economic categories). This means that companies who are trying to growing their business as whole can be quite challenged. This is where Dynamic Clustering comes in. Dynamic Clustering focuses on identifying patterns or opportunities in various and diverse segments to bring about the best strategies for each cluster. Pretend that you’re a national US apparel chain that operates stores in all 50 states. Through using Dynamic Clustering, you are able to identify similar patterns and trends in four different states, therefore allowing you to make better and more relevant sales, purchasing, or marketing decisions for that cluster of states. Etailing- Short for “Electronic Retailing”, this is the practice of selling products over the Internet. E-tailers come in all shapes and sizes, from big name giants such as Amazon

and Zappos, to neighborhood stores selling items on their website or to stay-at-home moms selling their crafts online. Flash Sales– Flash sales are discount events that take place for a limited time. They can last anywhere from several hours to a couple of days and attract consumers with huge bargains (usually 50% and up). The catch is that shoppers have to complete the purchase ASAP or otherwise risk losing the items to other shoppers or they may even run out of time. Green Retailing- Environmentally-friendly practices that retailers adopt is called green retailing. This can include switching a product’s packaging to a recyclable one or giving customers reusable shopping bags instead of plastic. This can also include structural changes such adding solar panels or replacing store lighting with energy-saving alternatives. High Speed Retail– People are impatient, therefore faster service with less wait time has created a demand for high speed retail. This is all about making the customer’s shopping experience go by quickly and seamlessly. Examples of High Speed Retail can include drive-thru grocery stores, pop-up stores, mobile businesses such as food trucks, or any retailer that implements urgent promotions or limited-time sales. The use of mobile POS systems is extremely valuable and gaining popularity in High Speed Retail. Not only is it fast, lightweight and easy to set up, mPOS solutions run in the cloud and can update every aspect of the business (inventory, CRM, payments, etc.) in real-time, thus helping merchants stay up-to-date at all times. Most mPOS systems also come with convenient capabilities such as emailing receipts and processing mobile payments, making it easy for High Speed Retailers to conduct business much faster. Integrated Supply Chain- This is a team effort in which businesses and contractors work and coordinate closely together to manufacture, transport, distribute, and sell retail goods. This is different than a traditional supply chain, which tends to be more of a linear process that follows a product from one phase to the next. On the other hand, an Integrated Supply Chain is more collaborative and can entail joint product development, shared information, and common systems. Keystone Pricing- This is the basic formula of selling merchandise at a rate that’s double its wholesale price. Retailers use this calculation because it’s simple and it usually covers costs while providing a decent profit margin.

Layaway / Lay-By- This is an agreement between the retailer and the customer in which the retailer puts an item on hold for the shopper until it is paid for in full. The consumer pays for the product in interest-free installments with the understanding that they will receive the item once all payments are made. This arrangement is conducive to both parties in that it makes it easier for the consumer to afford the products that they want while minimizing risk on the retailer’s side. Leveraged Buy-Out- An LBO is the purchase of a company using borrowed funds. The purchaser will use the company’s assets as collateral so they can get the loan to buy it, and then they plan on using the acquired company’s cash flow (i.e. retail sales) to repay said loan. Loss Leader– A well known marketing strategy in retail, a loss leader is an item that’s sold at a loss in order to attract more customers into a store. Once they’re inside, the retailer counts on the customer to buy other things together with the loss leader to generating profits for the business. Markdown– As opposed to a limited-time sales or promotional discounts, a markdown is a devaluation of a product due to its inability to be sold at the intended price. The price of the merchandise is permanently reduced to move inventory and make room for new products (aka a clearance item).

Mass Customization- Mass Customization refers to the practice of offering products that can be tailored to each person’s preferences, but can still be produced with mass-production efficiency. Author B. Joseph Pine II likens this process to LEGO bricks. The company has all of the pieces created and the customer can mix and match them to produce their own personalized product. Mobile Payments- This refers to the services and technology that enable consumers to pay using their mobile devices, in place of traditional forms of payment such as cash or credit cards. Mobile payment solutions come in many forms including NFC-based solutions such as ISIS or Google Wallet and app-based solutions like PayPal. Mobile Shopping- With smart phones and tablets becoming so commonplace, mobile shopping is the practice of purchasing goods or services using a mobile device. It’s similar to shopping online using a computer, only with a smaller screen. Mobile shoppers can complete their transactions either on a retailer’s mobile site or with the use of an app. Mystery Shopping- This is an activity practiced by market research companies, watchdog groups, or even retailers themselves to evaluate product or service quality or

compliance. The mystery shopper acts like a regular customer and performs tasks like asking questions, submitting complaints, or simply completing a purchase like they normally would. After, they provide feedback or write reports detailing their experience with the retailer. Niche Retailing- If you’re a niche retailer, you specialize in a particular type of product (or sometimes a few closely related ones) to a specific customer segment. Niche retailers can afford to be more nimble with their strategies because they cater to a particular audience. This allows them to easily identify market segments and deploy unique and more targeted strategies to address their market’s needs. Omni-Channel Retailing- Consider this as the next generation of cross-channel and multi-channel retail. Omni-channel means establishing a presence on several channels and platforms (i.e. brick-and-mortar, mobile, online, catalog etc) and enabling customers to pay, interact, and engage across these channels simultaneously or even interchangeably. Giving the customer the convenience and flexibility to purchase an item using your shopping app, and then letting them pick up the merchandise in your store, plus allowing them to process a return via your website, is an example of omni-channel retailing. However, just because you have a website, a mobile app, and a physical store doesn’t necessarily mean that you’re an omni-channel retailer; you must fuse all those channels together so they give customers a seamless experience. Planogram- This is a visual representation that shows how merchandise should be arranged on store shelves in order to drive more sales. It’s a model that indicates the best placement and positioning of your merchandise especially since product positioning can influence consumers’ purchases hopefully resulting in maximized sales. Planograms can also guide and assist in store mapping and they enable retailers use space more effectively. Pop-Up Store- Think of this as the offline cousin of flash sale websites. Pop-Up-Stores (sometimes referred to as Pop-Up Retail) are short-term shops or retail spaces that come and go within a given period of time. These stores can be set up in empty store fronts, mall booths, or even in the middle of a park. Pop-up stores usually emerge unannounced, quickly attract crowds, and then either disappear or morph into a different store the next time around. Prestige Pricing- Usually implemented by high-end retailers and lifestyle brands, prestige pricing is a strategy in which an item is exorbitantly high in order to denote

exclusivity, high quality, or luxury. When an item is prestigiously priced, it is meant to attract status-conscious individuals or consumers who want to buy premium products. Product Life Cycle- This term is used to describe the series of stages that each commercial product goes through when it hits the market. These stages include introduction, growth in sales revenue, maturity, and decline. It is crucial to pay attention to the life cycle of each of your products at each stage to gather info that you can use to improve future products or offerings. Relationship Retailing- This is a practice that businesses implement to create loyalty and establish long-term relationships with customers. Relationship Retailing can come in the form of loyalty programs, personalized experiences, or superb customer service. RFID- An acronym for Radio Frequency Identification, RFID is a chip embedded in an item’s label or packaging. It stores information about the product and is primarily used for tracking purposes. Thanks to RFID technology, retailers can increase their inventory accuracy and reduce out of stocks. (However, retailers are also looking into using RFID to get additional customer insights that would allow them to create more effective marketing strategies and provide better customer experiences.) Self-Serve- In retail, this means letting customers select and pay for goods themselves without requiring the assistance of an actual staff member. Vending machines, kiosks, as well as self-serve checkout lanes in grocery stores all fall under this category. Shrinkage- This is the amount of stock that you have on paper minus the actual stock you have available. In other words, it’s a reduction in inventory that isn’t caused by legit sales. Common causes include employee theft, shoplifting, administrative errors, and supplier fraud. Stock-Keeping Unit- More commonly known as SKU, this is the unique identification of a particular product. It’s used in inventory management and enables retailers to track and distinguish products from one another. A SKU represents all the attributes of an item that make it unique including style, brand, size, color, and more. Social Commerce- S-Commerce refers to retail models or e-commerce practices that incorporate social media, user-generated content, or social interaction. However, the role of social networks like Facebook or Twitter in S-Commerce isn’t necessarily to serve as platforms for buying and selling; many times they’re meant to assist the process and help drive customers to the company’s website. Mashableprovides a great rundown of the types of Social Commerce on the web.

According to the site, the seven species of Social Commerce are:

1. Peer-to-peer sales platforms (eBay, Etsy, Amazon Marketplace) 2. Social network-driven sales (Facebook, Pinterest, Twitter) 3. Group buying (Groupon, LivingSocial) 4. Peer recommendations (Amazon, Yelp, JustBoughtIt) 5. User-curated shopping (The Fancy, Lyst, Svpply) 6. Participatory commerce (Threadless, Kickstarter, CutOnYourBias) 7. Social shopping (Motilo, Fashism, GoTryItOn) Tribetailing- This term refers to the retail practice of tailoring everything you do--from your store design, to your ads, to your employees--for a specific “tribe” or group of people. With Tribetailing, your goal is not to please the public or the masses, but instead you’re focusing in on a particular niche and are catering to them and only them. Unified Brand Experience- In retail, this concept is all about establishing a consistent brand or identity throughout multiple channels or platforms including brick-and-mortar, ecommerce, or mobile. Regardless if you’re marketing and selling to customers face-to-face, on your mobile app, or doing it online, you’ll want to deliver the same messages and give them the same great experience across all platforms. Successfully implementing this involves properly training your staff, investing in the right tools, and more importantly, having one clear strategy and message. Virtual Augmentation- This concept is all about combining the user’s physical world with a virtual service so they appear to coexist in the same environment. Virtual augmentation brings computer-generated objects into the real world--kind of like how in the movie Space Jam, Michael Jordan can be seen playing basketball with Looney Tunes characters. In retail, this can be implemented in several ways including apps that let you see in-store deals when you point your phone’s camera towards a specific direction or even fitting room simulators. One recent example is when Topshop teamed up with AR Door to create a virtual fitting room for its Moscow location. Using augmented reality technology and Microsoft Kinect, they were able to create a fitting room simulator that allowed the customer to see how a dress looks on her without actually trying it on. A built in camera tracked the shopper’s body and superimposed a 3D model of the garment, so the dress moved and turned with the customer.

Webrooming- This is the practice of looking at products online before buying them in actual brick-and-mortar stores (as opposed to showrooming, where customers look at products in physical stores only to buy them online). Image-based websites and social networks such as Pinterest or Polyvore are helping to promote webrooming. Users see items that they like while browsing these sites and then go out in the real world to test or try them on. Whew! Now you are 40 terms smarter when it comes to modern day retail and implementing groundbreaking technology. Want to be even smarter still? Check out Vend’s point of sale systemthat is on the cutting edge of combining these innovations with your business structure. You’ll be able to track your click and collect sales, analyze the success of your keystone prices, create accurate reports based on your SKU numbers, and prevent dead stock pile-up based on your current analytics. The right POS software cannot only keep you abreast of your products, but it can also keep you on track with current retail technology trends. To learn more retail point of sale terminology, pos software, and access to great tips for retail success, you should visit Vendtoday and have a look around.