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Retailing Dictionary A To Z Retail Business


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Retailing Dictionary A To Z Retail Business

Retailing Dictionary A To Z Retail Business

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  • 1. Retailing Management RETAILING DICTIONARY A to Z of Retailing Business
  • 2. Retailing DictionaryANCHOR STOREA major retail store in a shopping centre; used to drive business to smaller retailers. These larger department stores or grocery storesare generally part of a retail chain and are the prominent business in a shopping mall.Asset TurnoverA performance measure based on a retailers net sales and total assets. It is equal to net sales divided by total assets.Big Box StoresLarge stand-alone store with varying market niches.BrandA brand is a name, symbol or other identifying mark for a sellers goods or services. It is distinct from other sellers.Brand AwarenessA gauge of marketing effectiveness measured by the ability of a customer to recognize and/or recall a name, image or other markassociated with a particular brand.Break Even PointThe point in business where the sales equal the expenses. There is no profit and no loss.Brick & MortarBrick and mortar store refers to retail shops that are located in a building as opposed to an online shopping destination, door-to-doorsales, kiosk or other similar site not housed within a structure.Balanced TenancyOccurs when stores in a planned shopping center complement each other in the quality and variety of their product offerings. The kindand number of stores are linked to the overall needs of the surrounding population.Basic Stock List A to z of Retailing Business
  • 3. Retailing DictionarySpecifies the inventory level, color, brand, style category, size, package, and so on for every staple item carried by the retailer.Battle of the BrandsWhen retailers and manufacturers compete for shelf space allocated to various brands and for control over display locations.Bundled PricingInvolves a retailer providing a number of services for one basic price; most often seen in mobility service packages for example.Black FridayIn retail, Black Friday is best known as the shopping day after Thanksgiving in the United Sates when retail stores generate theirhighest sales. Black refers to the accounting term as a business moves from loses in red ink to gains in black ink.Chain StoreOne of a number of retail stores under the same ownership and dealing in the same merchandise.Convenience productsMerchandise that is purchased frequently, without advance planning, including staples, impulse items, and emergency items.Co-operativeA group in which several retailers pool their resources to buy products at a discount from manufacturers; also called group buying.Catchment AreaThe area from where the majority of a shops customers are located.Category Killer StoreAn especially large specialty store featuring an enormous selection in its product category and relatively low prices. It draws consumersfrom wide geographic areas.ChainMultiple retail units under common ownership that engage in some level of centralized (or coordinated) purchasing and decisionmaking.Cash FlowRelates to the amount and timing of revenues received to the amount and timing of expenditures made during a specific time period. Inother words, the movement of money in and out of a business and the resulting availability of cash.Capital ExpendituresRetail expenditures that are long-term investments in fixed assets.Cross MerchandisingA marketing practice based on lateral marketing principle, which includes displaying products from complementary categories, in orderto generate incremental sales. The practice has assumed wider meanings to include cross-promotions and display of non-complementary merchandise too.Category specialistA retail store that offers merchandise in a narrow category but a large assortment of merchandise within that category, usually atcompetitive prices and dominates a retail category. It can also be termed as `Category Killer`.CannibalismThe impact that a new location will have on an existing store’s sales in a chain corporation.Cyber MondayCyber Monday, the Monday following Thanksgiving in the U.S., is one of the busiest shopping days of the year for online retailers. Theterm was coined by, a division of National Retail Federation. Retailers notice a spike in sales on this day as many consumerschose not to shop during Black Friday or did not find what they were looking for, headed to the web on Monday from work or home tofind bargains. Many retailers use Cyber Monday to kick off the holiday shopping season by offering special promotionsDepartment StoreA large retail unit with an extensive assortment (width and depth) of goods and services that is organized into separate departments forpurposes of buying, promotion, customer service, and control. A to z of Retailing Business
  • 4. Retailing DictionaryDepth of AssortmentRefers to the variety in any one goods/service category with which a retailer is involved.Discount StoreA self-service retail store with low markups. Example: Wal-Mart, Kmart.Destination RetailerA retailer to whom consumers will make a special shopping trip. The destination may be a store, a catalog, or a Web site.Destination StoreA retail outlet with a trading area much larger than that of a competitor with a less unique appeal to customers. It offers a bettermerchandise assortment in its product category(ies), promotes more extensively, and creates a stronger image.Durable Goods/DurablesProducts that can be used frequently and have a long life expectancy, such as furniture, jewelry, and major appliances.Dry GroceryGenerally food that is not fresh, eg. Masalas/condiments.Dead AreasAwkward spaces where normal displays cannot be set up.DownsizingExists when unprofitable stores are closed or divisions are sold off by retailers dissatisfied with their performance.Electronic Article SurveillanceInvolves attaching specially designed tags or labels to products to curb shoplifting.Ensemble DisplayAn interior display whereby coordinated merchandise is grouped and displayed together.EtailingInternet retailing as it is usually referred to. Covers retailing using a variety of different technologies or media, mostly the internet.Products are chosen via a published catalog and payments made through credit cards and secure payment gateways.Ease of EntryOccurs for retailers due to low capital requirements and no, or relatively simple, licensing provisions.Everyday Low Pricing (EDLP)A version of customary pricing, whereby a retailer strives to sell its goods and services at consistently low prices throughout the sellingseason.End –UserThe person who uses a product that has been manufactured and marketed. Based on the idea that the “end goal” of a manufacturedproduct is for it to be useful to the consumer(FIFO) First-in, first outA method of stock rotation in which goods that are received first are sold first. Newly received product is stocked behind the oldermerchandise.FadA fashion that gains and loses popularity very quickly.Factory OutletA manufacturer-owned store selling that firms closeouts, discontinued merchandise, irregulars, canceled orders, and, sometimes, in-season, first-quality.Flea MarketHas many retail vendors offering a range of products at discount prices in plain surroundings. Many flea markets are located innontraditional sites not normally associated with retailing. They may be indoor or outdoor.Food-Based Superstore A to z of Retailing Business
  • 5. Retailing DictionaryA retailer that is larger and more diversified than a conventional supermarket but usually smaller and less diversified than a combinationstore. It caters to consumers complete grocery needs and offers them the ability to buy fill-in general merchandise.Forecourt RetailOne stop solution to all the demands of customers coming to petrol pumps.Food courtan area as in a shopping mall where fast food is sold usually around a common eating area.Full-Line Discount StoreA type of department store characterized by (1) a broad merchandise assortment; (2) centralized checkout service; (3) merchandisenormally sold by self-service with minimal assistance; (4) no catalog order service; (5) private-brand nondurable goods and well-knownmanufacturer-brand durable goods; (6) hard goods accounting for a much greater percentage of sales than at traditional departmentstores; (7) a relatively inexpensive building, equipment, and fixtures; and (8) less emphasis on credit sales than in full-service stores.FranchiseA trading entity such as a marketing tool or method, a product or group of products or simply a trade brand.FranchiseeThe party that sells goods and services within the framework of the franchiseFranchisorThe party that established (manages) the franchise.FootfallIn the retail parlance, the number of people visting a retail outlet in a period of time is called a footfall. Even though a footfall indicatesthe number of people who visited a retail outlet, it is only when footfalls are converted into purchases, that makes for retail success.FranchiseThe right under which a franchisee person or company may market a product or service, as granted by the franchisor (the proprietaryowner). A franchise agreement is the contract defining the terms and conditions between the franchisor and franchisee. Franchisesoften give exclusive rights for a specified areaGross MarginGross margin is the difference between what an item costs and for what it sells.GoodsTangible products for sale that can be held or touched.General StoreA shop that sells a variety of goods including food.Generic BrandsNo-frills goods stocked by some retailers. These items usually receive secondary shelf locations, have little or no promotion support,are sometimes of less overall quality than other brands, are stocked in limited assortments, and have plain packages.Goods RetailingFocuses on the sale of tangible (physical) products.Goods/Service CategoryA retail firm line of business.Gray Market GoodsBrand-name products purchased in foreign markets or goods transshipped from other retailers. They are often sold at low prices byunauthorized dealers.Generic BrandsNo-frills goods stocked by some retailers. These items usually receive secondary shelf locations, have little or no promotion support,are sometimes of less overall quality than other brands, are stocked in limited assortments, and have plain packages. A to z of Retailing Business
  • 6. Retailing DictionaryHigh Streeta main street considered as important retail areaHardlinesA store department or product line primarily consisting of merchandise such as hardware, house wares, automotive, electronics,sporting goods, health and beauty aids or toysImpulse PurchaseProducts that people purchase without planning for it, such as magazines or candy barsIndependentA retailer that owns only one retail unitInitial Markup (at Retail)Based on the original retail value assigned to merchandise less the merchandise costs, expressed as a percentage of the original retailpriceInventory ManagementInvolves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and relatedcosts are kept in check.Inventory ShrinkageInvolves employee theft, customer shoplifting, and vendor fraudIsolated StoreA freestanding retail outlet located on either a highway or a street. There are no adjacent retailers with which this type of store sharestraffic.Inventory turnoverA ratio measuring the adequacy and efficiency of the inventory balance, calculated by dividing the cost of goods sold by the amount ofthe average inventoryKIOSKThe term kiosk, as related to retailing, refers to a small stand-alone structure used as a point of purchase. This can be either acomputer or display screen used to disseminate information to customers or may be a free-standing, full-service retail location. Kiosksare often found in malls and other high-traffic locations.KIRANA STORESTraditional formats of low cost retailing stores in India, mostly as stand alone family run, neighbourhood shops. Major strength beingfamiliarization with immediate and regular customers, provision of credit facility, home delivery etc.Keystone PricingKeystone pricing is a method of marking merchandise for resells to an amount that is double the wholesale price.Loss LeaderA selected item that is deliberately sold at less than cost in order to attract customers.Loss PreventionLoss prevention is the act of reducing the amount of theft and shrinkage within a business.LayawayLayaway is the act of taking a deposit to store merchandise for a customer to purchase at a later date.Leased departmentA part of a department store that is actually leased out to another company and operated as an independent store within thedepartment store; common with cosmetics companies.Limited lineDescribes a department store that carries a limited amount of merchandise, usually concentrating on clothing, accessories, and beautysupplies. A to z of Retailing Business
  • 7. Retailing DictionaryLeader PricingOccurs when a retailer advertises and sells selected items in its goods/service assortment at less than usual profit margins. The goal isto increase customer traffic in the hope of selling regularly priced goods and services in addition to the specially priced items.Leveraged Buyout (LBO)An ownership change that is mostly financed by loans from banks, investors, and others.LiabilitiesAny financial obligations a retailer incurs in operating a business.LIFO Method(Last in, first out) Assumes new merchandise is sold first, while older stock remains in inventory. It matches current sales with thecurrent cost structure.Limited Decision MakingOccurs when a consumer uses each of the steps in the purchase process but does not need to spend a great deal of time on each ofthem.LogisticsThe total process of moving goods from a manufacturer to a customer in the most timely and cost-efficient manner possibleMinimum Advertised PriceA suppliers pricing policy that does not permit its resellers to advertise prices below some specified amount. It can include the resellersretail price as well.MarginThe amount of gross profit made when an item is sold.Merchandise MixA merchandise mix is the breadth and depth of the products carried by retailers. Also known as product assortment.Mystery ShoppingA quality check system employed by companies. Dummy customers are sent into stores to check upon quality of service, behaviour andknowledge of store employees etc.Merchandising planA strategy for actual and projected sales for a specific period of time.MergerThe combining of two or more retail organizations into one company.Multiline drugstoreA store that sells a variety of health and beauty products, plus some small appliances and household items, in addition to prescriptiondrugs.MerchandisingThe way that products are displayed in a shop.Multiple (store)Retail Chain.Maintained Markup (at Retail)Based on the actual prices received for merchandise sold during a time period less merchandise cost, expressed as a percentage.Maintenance-Increase-Recoupment LeaseHas a provision allowing for rent increases if a property owner taxes, heating bills, insurance, or other expenses rise beyond a certainpoint.Manufacturer (National) BrandsProduced and controlled by manufacturers. They are usually well known, supported by manufacturer ads, somewhat pre-sold toconsumers, require limited retailer investment, and often represent maximum product quality to consumers. A to z of Retailing Business
  • 8. Retailing DictionaryMarketing Research in RetailingEntails the collection and analysis of information relating to specific issues or problems facing a retailer.Marketing Research ProcessEmbodies a series of activities: defining the issue or problem to be studied, examining secondary data, generating primary data (ifneeded), analyzing data, making recommendations, and implementing findings.Market PenetrationA pricing strategy in which a retailer seeks to achieve large revenues by setting low prices and selling a high unit volume.Market-Segment Product GroupingsPlace various products appealing to a given target market together.Market SkimmingA pricing strategy wherein a firm charges premium prices and attracts customers less concerned with price than service, assortment,and status.Midnight saleA centrewide, merchants` association-sponsored, low-end, off-price promotion, generally continuing untill 11 p.m or midnight: one nightonlyMarkdownPlanned reduction in the selling price of an item, usually to take effect either within a certain number of days after seasonalmerchandise is received or at a specific date. Also, A reduction from selling price to meet the lower price of another retailer, adapt toinventory overstocking, clear out shopworn merchandise, reduce assortments of odds and ends, and increase customer traffic.Markdown PercentageThe total markdown as a percentage of net sales (in dollars).Markup Percentage (at Retail)The difference between retail price and merchandise cost expressed as a percentage of retail price.Markup PricingA form of cost-oriented pricing in which a retailer sets prices by adding per-unit merchandise costs, operating expenses, and desiredprofit.MarqueeA sign used to display a store name and/or logo.Massed Promotion EffortUsed by retailers that promote mostly in one or two seasons.Mass MarketingSelling goods and services to a broad spectrum of consumersMass MerchandisingA positioning approach whereby retailers offer a discount or value-oriented image, a wide and/or deep merchandise assortment, andlarge store facilities.Mazur PlanDivides all retail activities into four functional areas: merchandising, publicity, store management, and accounting and control.MegamallAn enormous planned shopping center with 1-million-plus square feet of retail space, multiple anchor stores, up to several hundredspecialty stores, food courts, and entertainment facilities.Membership ClubAims at price-conscious consumers, who must be members to shop. A to z of Retailing Business
  • 9. Retailing DictionaryMemorandum PurchaseOccurs when items are not paid for by the retailer until they are sold. The retailer can return unsold merchandise. However, it takes titleon delivery and is responsible for damagesMerchandise Available for SaleEquals beginning inventory, purchases, and transportation charges.Merchandise Buying and Handling ProcessComprised of an integrated and systematic sequence of steps from establishing a buying organization through regular re-evaluation.Merchandise SpaceThe area where nondisplayed items are kept in stock or inventory.MerchandisingConsists of the activities involved in acquiring particular goods and/or services and making them available at the places, times, andprices and in the quantity to enable a retailer to reach its goals.MergersInvolve the combination of separately owned retail firms.Micro-MerchandisingA strategy whereby a firm adjusts shelf-space allocations to respond to customer and other differences among local markets.Minimum-Price LawsA strategy whereby a firm adjusts shelf-space allocations to respond to customer and other differences among local markets.Model Stock ApproachA method of determining the amount of floor space to carry and display a proper merchandise assortment.Model Stock PlanThe planned composition of fashion goods, which reflects the mix of merchandise available based on expected sales. The model stockplan indicates product lines, colors, and size distributions.Monthly Sales IndexA measure of sales seasonality that is calculated by dividing each month actual sales by average monthly sales and then multiplyingthe results by 100.Mother Hen with Branch Store Chickens OrganizationExists when headquarters executives oversee and operate the branches. This works well if there are few branches and the buyingpreferences of branch customers are similar to customers of the main store.MotivesThe reasons for consumers behavior.Multidimensional ScalingA statistical technique that allows attitudinal data to be collected for several attributes in a manner that allows data analysis to produce asingle overall rating of a retailer (rather than a profile of individual characteristics).Multiple-Unit PricingA policy whereby a retailer offers discounts to customers who buy in quantity.Mom & Pop StoresSmall independently run stores.M Commerce(mobile commerce) is the buying and selling of goods and services through wireless handheld devices such as cellular telephone andpersonal digital assistants (PDAs). Known as next-generation e-commerce, m-commerce enables users to access the Internet withoutneeding to find a place to plug in. A to z of Retailing Business
  • 10. Retailing DictionaryMaintained markupThe difference between the net sales and the gross cost of merchandise sold. it is the margin on sales before making adjustments forcash discounts earned and alternation costs.Non durable goodsProducts that are purchased frequently and used in a short period of time, such as beauty supplies and cosmetics.NonmarkingA pricing system in which each individual item does not have a price tag, instead a price is labeled on a bin or a shelf.Need-Satisfaction ApproachA sales technique based on the principle that each customer has different wants; thus, a sales presentation should be geared to thedemands of the individual.Negotiated PricingOccurs when a retailer works out prices with individual customers because a unique or complex service is involved and a one-time pricemust be agreed upon.Neighborhood Business District (NBD)An unplanned shopping area that appeals to the convenience-shopping and service needs of a single residential area. The leadingretailer is typically a supermarket, a large drugstore, or a variety store and it is situated on the major street(s) of its residential area.Neighborhood Shopping CenterA planned shopping facility with the largest store being a supermarket and/or a drugstore. It serves 3,000 to 50,000 people who arewithin 15 minutes driving time (usually fewer than 10 minutes).Net LeaseCalls for all maintenance costs, such as heating, electricity, insurance, and interior repair, to be paid by the retailer -- which isresponsible for their satisfactory quality.Net ProfitEquals gross profit minus retail operating expenses.Net Profit Before TaxesThe profit earned after all costs have been deducted.Net Profit MarginA performance measure based on a retailers net profit and net sales. It is equal to net profit divided by net sales.Net SalesThe revenues received by a retailer during a given time period after deducting customer returns, markdowns, and employee discounts.Net WorthComputed as a retailers assets minus its liabilities.Never-Out ListUsed when a retailer plans stock levels for best-sellers. Items accounting for high sales volume are stocked in a manner that ensuresthey are always available.Niche RetailingEnables retailers to identify customer segments and deploy unique strategies to address the desires of those segments.Nondisguised SurveyA technique in which the respondent is told the real purpose of a research study.Nongoods ServicesThe area of service retailing in which intangible personal services (rather than goods) are offered to consumers -- who experienceservices rather than possess them.Nonprobability Sample A to z of Retailing Business
  • 11. Retailing DictionaryAn approach in which stores, products, or customers are chosen by the researcher -- based on judgment or convenience.Nonstore RetailingUtilizes strategy mixes that are not store-based to reach consumers and complete transactions. It occurs via direct marketing, directselling, and vending machines.Odd-Even PricingA form of psychological pricing that suggests buyers are more sensitive to certain ending digits.Open-to-BuyMerchandise budgeted for purchase during a certain time period that has not yet been ordered.Open backgroundDescribes a window display with a completely unobstructed view of the interior of the store.OvererrA mistake made when an employee enters an amount into the register that is more than the sale price.One-stop-shopRetail outlet that caters for virtually every need within a product or service group or across all products and services.OutletShop.Objective-and-Task MethodA promotional budgeting technique by which a retailer clearly defines its promotional goals and then prepares a budget to satisfy thesegoals.ObjectivesThe long-run and short-run performance targets that a retailer hopes to attain. Goals can involve sales, profit, satisfaction of publics,and image.ObservationA form of research in which present behavior or the results of past behavior are observed and recorded. It can be human ormechanical.Odd PricingA strategy in which retail prices are set at levels below even-dollar values, such as $0.49, $4.98, and $199.Off-Price ChainFeatures brand-name apparel and accessories, footwear, linens, fabrics, cosmetics, and/or housewares and sells them at everyday lowprices in an efficient, limited-service environment.Off-Retail Markdown PercentageThe markdown for each item or category of items as a percentage of original retail price.One-Hundred Percent LocationThe optimum site for a particular store. A location labeled as 100 percent for one firm may be less than optimal for another.One-Price PolicyA strategy wherein a retailer charges the same price to all customers buying an item under similar conditions.Open Credit AccountRequires a consumer to pay his or her bill in full when it is due.Open-to-BuyThe difference between planned purchases and the purchase commitments already made by a buyer for a given time period, often amonth. It represents the amount the buyer has left to spend for that month and is reduced each time a purchase is made.Operating Expenditures A to z of Retailing Business
  • 12. Retailing DictionaryThe short-term selling and administrative costs of running a business.Operating ExpensesThe cost of running a retail business.Operations ManagementThe efficient and effective implementation of the policies and tasks necessary to satisfy a firm customers, employees, and management(and stockholders, if a publicly owned company).Opportunistic BuyingNegotiating special low prices for merchandise whose sales have not lived up to expectations, end-of-season goods, items consumershave returned to the manufacturer or another retailer, and closeoutsOpportunitiesThe marketplace openings that exist because other retailers have not yet capitalized on them.Opportunity CostsInvolve forgoing possible benefits that may occur if a retailer could make expenditures in another opportunity rather than the onechosen.Option Credit AccountA form of revolving account that allows partial payments. No interest is assessed if a person pays a bill in full when it is due.Order-Getting SalespersonActively involved with informing and persuading customers, and in closing sales. This is a true "sales" employee.Order Lead TimeThe period from the date an order is placed by a retailer to the date merchandise is ready for sale (received, price-marked, and put onthe selling floor).Order-Taking SalespersonInvolved in routine clerical and sales functions, such as setting up displays, placing inventory on the shelves, answering simplequestions, filling orders, and ringing up sales.Organizational MissionA retailers commitment to a type of business and to a distinctive role in the marketplace. It is reflected in the firms attitudes toconsumers, employees, suppliers, competitors, government, and others.Outside Buying OrganizationA company or person external to the retailer that is .Outside Buying OrganizationA company or person external to the retailer that is hired to fulfill the buying function, usually on a fee basis .Overstored Trading AreaA geographic area with so many stores selling a specific good or service that some retailers will be unable to earn an adequate profit.Owned-Goods ServicesThe area of service retailing in which goods owned by consumers are repaired, improved, or maintainedOnline advertisingis a form of advertising that uses the Internet and World Wide Web in order to deliver marketing messages and attract customersPrecision RetailingUsing data in information systems to make refined merchandising decisions store by store.PlanogramVisual description, diagram or drawing of a stores layout to include placement of particular products and product categoriesProfit Margin A to z of Retailing Business
  • 13. Retailing DictionaryA ratio of profitability calculated as earnings divided by revenues. It measures how much out of every dollar of sales a retail businessactually keeps in earningsProduct Life CycleThe stages that a new product is believed to go through from the beginning to the end: Introduction, Growth, Maturity and DeclinePrivate LabelProducts which are generally manufactured or provided by one company under another companys brandPOSPoint of Sale (POS) refers to the area of a store where customers can pay for their purchases. The term is normally used to describesystems that record financial transactions. This could be an electric cash register or an integrated computer system which records thedata that comprises a business transaction for the sale of goods or servicesProduct DepthProduct depth is the number of each item or particular style of a product on the shelves. Product depth is also known as productassortment or merchandise depthProduct BreadthThe product breadth is the variety of product lines offered by a retailerPurchase OrderA purchase order (PO)is a written sales contract between buyer and seller detailing the exact merchandise or services to be renderedfrom a single vendorPoint-of-Purchase DisplayPoint-of-purchase displays, or POP displays, are marketing materials or advertising placed next to the merchandise it is promoting.These items are generally located at the checkout area or other location where the purchase decision is made. For example, Thecheckout counters of many convenience stores are cluttered with cigarette and candy POP displaysPartial backgroundThe rear of a window display that is partially covered, but allows customers to see through the display into the storePatronage buying motiveA reason customers will shop at one store instead of another, can be rational or emotionalPin ticketThe sort of price ticket used on towels and washcloths that is attached with a pinPoint-of-sale terminalAn electronic machine at a checkout station that feeds information from product tags directly into a computer.PremarkingA system in which the manufacturer, rather than the retailer, marks merchandise with the retail price.PreretailingA system in which a duplicate purchase order is sent to receiving when merchandise is ordered so that as soon as the merchandise isreceived, it can be marked with the correct prices.Product / Service MixThe number and kind of products and services a general merchandise retailer will offer.Product / Service planningThe process of deciding what the product/service mix will be.Profit CenterA section of a store that earns money for the retailer.Pull policyA promotional policy aimed at building strong consumer demand for a product. A to z of Retailing Business
  • 14. Retailing DictionaryPush policyA promotional policy aimed at markets with the intention of getting retailers to stock a product in order to build supply in themarketplace.PalletA large flat board that is used to hold and move products.PitchA plot of land used by street traders As in sales pitch, the approach, emphasis and nuances used when articulating the virtues of aservice or product.PolyesterSynthetic polymer often used to coat household goods such as refrigerators.Polyhook BagA bag that contains a small plastic hangar as an integral part of the top of the bagPrice WarA colloquial phrase denoting aggressive price reductions on the same (or similar) products by competing retailers.Primary PackagingThe immediate packaging around the finished product.ProcurementObtaining Goods.Product OfferProducts attributes, including priceParasite StoreAn outlet that does not create its own traffic and that has no real trading area of its ownPartnershipAn unincorporated retail firm owned by two or more persons, each of whom has a financial interest.Perceived RiskThe level of risk a consumer believes exists regarding the purchase of a specific good or service from a specific retailer, whether or notthat belief is factually correct.Percentage LeaseStipulates that rent is related to the retailers sales or profits.Percentage-of-Sales MethodA promotional budgeting technique whereby a retailer ties its promotion budget to sales revenue.Percentage Variation MethodAn inventory-level planning method where beginning-of-month planned inventory level during any month differs from planned averagemonthly stock by only one-half of that month variation from estimated average monthly sales.Percentage Variation MethodAn inventory-level planning method where beginning-of-month planned inventory level during any month differs from planned averagemonthly stock by only one-half of that months variation from estimated average monthly sales.Performance MeasuresThe criteria used to assess retailer effectiveness. They include total sales, average sales per store, sales by goods/service category,sales per square foot, gross margins, gross margin return on investment, operating income, inventory turnover, markdown percentages,employee turnover, financial ratios, and profitability.Perpetual-Inventory Unit-Control SystemKeeps a running total of the number of units handled by a retailer by ongoing record-keeping entries that adjust for sales, returns, A to z of Retailing Business
  • 15. Retailing Dictionarytransfers to other departments or stores, receipt of shipments, and other transactions. It can be done manually, use tags processed bycomputers, or rely on point-of-sale devices.Personal SellingInvolves oral communication with one or more prospective customers for the purpose of making sales.Physical Inventory SystemInvolves an actual counting of merchandise. A retailer using the cost method of inventory valuation and relying on a physical inventorysystem can derive gross profit only as often as it conducts a full physical inventory.Planned Shopping CenterConsists of a group of architecturally unified commercial establishments built on a site that is centrally owned or managed, designedand operated as a unit, based on balanced tenancy, and surrounded by parking facilities.Point-of-Purchase (POP) DisplayAn interior display that provides consumers with information, adds to store atmosphere, and serves a substantial promotional role.PositioningEnables a retailer to devise its strategy in a way that projects an image relative to its retail category and its competitors, and elicitsconsumer responses to that image.Power CenterA shopping site with (a) up to a half-dozen or so category killer stores and a mix of smaller stores or (b) several complementary storesspecializing in a product category.Power RetailerThe status reached by a company that is dominant in some aspect of its strategy. Consumers view the company as distinctive enoughto become loyal to it and go out of their way to shop there.Power RetailerThe status reached by a company that is dominant in some aspect of its strategy. Consumers view the company as distinctive enoughto become loyal to it and go out of their way to shop there.Predatory PricingInvolves large retailers that seek to destroy competition by selling goods and services at very low prices, thus causing small retailers togo out of business. The practice is restricted by federal and state laws.Prestige PricingAssumes consumers will not buy goods and services at prices deemed too low. It is based on the price-quality association.Price Elasticity of DemandRelates to the sensitivity of customers to price changes in terms of the quantities they will buy.Price GuaranteesProtect retailers against possible price declines. If a retailer cannot sell an item at a given price, the manufacturer pays it; the differencebetween planned retail and actual retail selling prices.Price Line ClassificationsEnable retail sales, inventories, and purchases to be analyzed by retail price category.Price Lining (1)A practice whereby retailers sell merchandise at a limited range of price points, with each price point representing a distinct level ofquality.Price Lining (2)Used by service retailers providing a wide selection of services. A range of prices is matched to service levels.Price-Quality AssociationA concept stating that many consumers feel high prices connote high quality and low prices connote low quality.Primary Customer Services A to z of Retailing Business
  • 16. Retailing DictionaryThose considered basic components of the retail strategy mix; they must be provided.Primary Trading AreaEncompasses 50 percent to 80 percent of a stores customers. It is the geographic area closest to the store and possesses the highestdensity of customers to population and the highest per-capita sales.Private (Dealer) BrandsContain names designated by wholesalers or retailers, are more profitable to retailers, are better controlled by retailers, are not sold bycompeting retailers, are less expensive for consumers, and lead to customer loyalty to retailers.ProductivityProductivity The efficiency with which a retail strategy is carried out.Product Life CycleShows the expected behavior of a good or service over its life. The traditional cycle has four stages: introduction, growth, maturity, anddeclineProduct/Trademark FranchisingAn arrangement in which franchised dealers acquire the identities of their suppliers by agreeing to sell the latters products and/oroperate under suppliers namesProfit-and-Loss (Income) StatementRepresents a summary of a retailers revenues and expenses over a particular period of time, usually on a monthly, quarterly, and/oryearly basisPrototype StoresOccur with an operations strategy that requires multiple outlets in a chain to conform to relatively uniform construction, layout, andoperations standards.Psychological PricingRefers to consumer perceptions of retail prices.Purchase ActAn exchange of money or a promise to pay for ownership or use of a good or service. Purchase variables include the place ofpurchase, terms, and availability of merchandise.Purchase-Motivation Product GroupingsAppeal to the consumers urge to buy a product and the time he or she is willing to spend in shoppingQuantity DiscountA reduction in price based on the amount purchased. May be offered in addition to any trade discount.Quick Response (QR) Inventory PlanningEnables a retailer to reduce the amount of inventory it keeps on hand by ordering more frequently and in lower quantity.RetailingThe sale of goods or commodities in small quantities directly to consumers.Reserve stockMerchandise that is kept somewhere other than the selling floor.Resident Buying officeAn office located in a central merchandising area where buyers can receive information about products from a variety of manufacturers.RetailersBusinesses that buy goods from wholesalers or manufacturers and resell them to customers.Retailing strategyA strategic plan to adapt to changing technology and markets, and meet company goals and objectives through retailing. A to z of Retailing Business
  • 17. Retailing DictionaryReturns percentageThe relationship between returns and allowances, and sales, calculated by dividing returns and allowances by gross sales.Ringseal ticketA pricing ticket shaped like a butterfly bandage, used on jewelry and lampshades.Retail ChainA group of shops operated by the same organization.Reverse LogisticsReverse movement of goods through the supply chain.Rack DisplayAn interior display that hangs or presents products neatly.Rationalized RetailingA strategy involving a high degree of centralized management control combined with strict operating procedures for every phase ofbusiness.ReachThe number of distinct people exposed to a retailers ads in a specified period.RecommendationsThe stage in the research process during which the alternative approach to best solve a problem or issue is presented.RecruitmentThe activity whereby a retailer generates a list of job applicants.Reference GroupsInfluence peoples thoughts and/or behavior. They may be classified as aspirational, membership, and dissociative.Regional Shopping CenterA large, planned shopping facility appealing to a geographically dispersed market. It has at least one or two full-sized department storesand 50 to 150 or more smaller retailers. The market for this center is 100,000-plus people, who live or work up to 30 minutes drivingtime from the center.Regression ModelA computer site-selection model that develops a series of mathematical equations showing the association between potential storesales and various independent variables at each location under considerationReillys Law of Retail GravitationThe traditional means of trading area delineation that establishes a point of indifference between two cities or communities, so thetrading area of each can be determinedRelationship RetailingExists when retailers seek to establish and maintain long-term bonds with customers, rather than act as if each sales transaction is acompletely new encounter with themRented-Goods ServicesThe area of service retailing in which consumers lease and use goods for specified periods of timeRegional Shopping CenterA large, planned shopping facility appealing to a geographically dispersed market. It has at least one or two full-sized department storesand 50 to 150 or more smaller retailers. The market for this center is 100,000-plus people, who live or work up to 30 minutes drivingtime from the center.Regression ModelA computer site-selection model that develops a series of mathematical equations showing the association between potential storesales and various independent variables at each location under considerationReillys Law of Retail Gravitation A to z of Retailing Business
  • 18. Retailing DictionaryThe traditional means of trading area delineation that establishes a point of indifference between two cities or communities, so thetrading area of each can be determinedRelationship RetailingExists when retailers seek to establish and maintain long-term bonds with customers, rather than act as if each sales transaction is acompletely new encounter with themRented-Goods ServicesThe area of service retailing in which consumers lease and use goods for specified periods of timeReorder PointThe stock level at which new orders must be placedResident Buying OfficeAn inside or outside buying organization that is usually situated in important merchandise centers (sources of supply) and providesvaluable data and contacts.Retail AuditThe systematic examination and evaluation of a firms total retailing effort or some specific aspect of it. Its purpose is to study what aretailer is presently doing, appraise how well the firm is performing, and make recommendations for future actionsRetail BalanceRefers to the mix of stores within a district or shopping centerRetail Information SystemAnticipates the information needs of retail managers; collects, organizes, and stores relevant data on a continuous basis; and directsthe flow of information to the proper retail decision makers.Retailing ConceptComprises these four elements: customer orientation, coordinated effort, value-driven, and goal orientation.Retailing Effectiveness ChecklistLets a firm systematically assess its preparedness for the future.Retail InstitutionRefers to the basic format or structure of a business. Institutions can be classified by ownership, store-based retail strategy mix, serviceversus goods retail strategy mix, and nonstore-based retail strategy mix.Retail Life CycleA theory asserting that institutions -- like the goods and services they sell -- pass through identifiable life-cycle stages: innovation,accelerated development, maturity, and decline.Retail Method of AccountingA way by which the closing inventory value is determined by calculating the average relationship between the cost and retail values ofmerchandise available for sale during a period .Retail OrganizationHow a firm structures and assigns tasks (functions), policies, resources, authority, responsibilities, and rewards so as to efficiently andeffectively satisfy the needs of its target market, employees, and management.Retail Performance IndexEncompasses five-year trends in revenue growth and profit growth, and a six-year average return on assets.Retail PromotionAny communication by a retailer that informs, persuades, and/or reminds the target market about any aspect of that firm.Retail ReductionsRepresent the difference between beginning inventory plus purchases during the period and sales plus ending inventory. They shouldencompass anticipated markdowns, employee and other discounts, and stock shortages. A to z of Retailing Business
  • 19. Retailing DictionaryRetail StrategyThe overall plan guiding a retail firm. It has an influence on the firms business activities and its response to market forces, such ascompetition and the economy.Return on Assets (ROA)A performance ratio based on a retailers net sales, net profit, and total assets.Return on Net WorthA performance measure based on a retailers net profit, net sales, total assets, and net worth.Revolving Credit AccountAllows a customer to charge items and be billed monthly on the basis of the outstanding cumulative balance.Robinson-Patman ActBars manufacturers and wholesalers from discrimination in price or sales terms in selling to individual retailers if these retailers arepurchasing products of "like quality" and the effect of such discrimination would be to injure competition.Routine Decision MakingTakes place when a consumer buys out of habit and skips steps in the purchase processRetail Technologysystems which increase retailers efficiency and productivity and often create a competitive edge.Return on Investment(ROI)is the amount of profit or cost saving that will be realized in return for a specific expenditure of money. It is usually expressed as apercentage of the original monetary outlay. The ROI ratio compares the net benefits of a project to its total costsSale-LeasebackThe practice of retailers building new stores and then selling them to real-estate investors who lease the property back to the retailerson a long-term basis.Sales ForecastingLets a retailer estimate expected future sales for a given time period.Sales Opportunity GridRates the promise of new goods, services, procedures, and/or store outlets across a variety of criteria.Sales-Productivity RatioA method for assigning floor space on the basis of sales or profit per foot.Saturated Trading AreaA geographic area having proper amount of retail facilities to satisfy the needs of its population for a specific good or service, as well asto let retailers prosper.Scenario AnalysisLets a retailer project the future by examining the key factors that will affect its long-run performance and then preparing contingencyplans based on alternate scenarios .Scrambled MerchandisingLets a retailer project the future by examining the key factors that will affect its long-run performance and then preparing contingencyplans based on alternate scenarios.Scrambled MerchandisingOccurs when a retailer adds goods and services that are unrelated to each other and to the firms original business.Secondary Business District (SBD)An unplanned shopping area in a city or town that is usually bounded by the intersection of two major streets. It has at least a juniordepartment store, a variety store, and/or some larger specialty stores -- in addition to many smaller stores.Secondary Trading Area A to z of Retailing Business
  • 20. Retailing DictionaryA geographic area with an added 15 percent to 25 percent of a stores customers. It is located outside a primary trading area, andcustomers are more widely dispersed.Selective DistributionTakes place when suppliers sell through a moderate number of retailers. This allows suppliers to have higher sales than in exclusivedistribution and lets retailers carry some competing brands.Self-FulfillmentA life-style concept whereby people express their growing sense of uniqueness through goods and services purchases.Selling Against the BrandThe practice of retailers carrying manufacturers brands and placing high prices on them so rival brands (such as private-label goods)can be sold more easily.Selling SpaceThe area set aside for displays of merchandise, interactions between salespeople and customers, demonstrations, and so on.Separate Store OrganizationTreats each branch as a separate store with its own buying responsibilities. Customer needs are quickly noted, but duplication bymanagers in the main store and the branches is possibleService BlueprintSystematically lists all the service functions to be performed and the average time expected for each ones completion.Service RetailingInvolves transactions between companies or individuals and final consumers where the consumers do not purchase or acquireownership of tangible products. It encompasses rented goods, owned goods, and nongoods.SERVQUALLets retailers assess the quality of their service offerings by asking customers to react to a series of statements in five areas ofperformance: reliability, responsiveness, assurance, empathy, and tangibles.SimulationA type of experiment whereby a computer-based program is used to manipulate the elements of a retail strategy mix rather than testthem in a real setting.Situation AnalysisThe candid evaluation of the opportunities and potential problems facing a prospective or existing retailerSole ProprietorshipAn unincorporated retail firm owned by one person.Sorting ProcessInvolves the retailers collecting an assortment of goods and services from various sources, buying them in large quantity, and offeringto sell them to consumers in small quantities.SpecialogEnables a firm to cater to specific needs of customer segments, emphasize a limited number of items, and reduce its catalog productionand postage costs.Specialty StoreA general merchandise retailer that concentrates on selling a specific kind of product or service.StandardizationA strategy of directly applying a tried and tested retail strategy to newer markets to ensure customers get the same experience acrossall stores of a chain.Standard Merchandise ClassificationA detailed list of common merchandise-reporting categories devised by the National Retail Federation. Its use lets retailers contrasttheir financial data with industry averages. A to z of Retailing Business
  • 21. Retailing DictionaryStock-to-Sales MethodAn inventory-level planning technique wherein a retailer wants to maintain a specified ratio of goods-on-hand to sales.Stock TurnoverRepresents the number of times during a specific period, usually one year, in which the average inventory on hand, is sold. Stockturnover can be computed in units or money (at retail or cost).Storability Product GroupingsClassify and display products needing special handling and storage together.StorefrontThe total physical exterior of a store. It includes the marquee, entrances, windows, lighting, and construction materials.Store LoyaltyExists when a consumer regularly patronizes a particular retailer (store or nonstore) that he or she knows, likes, and trusts.Store MaintenanceEncompasses all the activities involved in managing a retailers physical facilities.Straight LeaseRequires the retailer to pay a fixed amount per month over the life of a lease. It is the simplest, most direct leasing arrangement.Sales FloorThe sales floor is the location in a retail store where goods are displayed and sales transactions take place. For example, the receivingof merchandise takes place in the stock room, but all direct sales and customer interactions are done on the sales floorShopliftingShoplifting is the taking of merchandise offered for sale without payingShrinkageRetail shrinkage is a reduction or loss in inventory due to shoplifting, employee theft, paperwork errors and supplier fraudSKUThe Stock Keeping Unit (SKU) is a number assigned to a product by a retail store to identify the price, product options andmanufacturerSlidingA loss prevention term referring to the act of a cashier passing merchandise around the cash register barcode scanner without actuallyscanning the itemSoftlinesA store department or product line primarily consisting of merchandise such as clothing, footwear, jewelery, linen and towelsStaple GoodsStaple goods are products purchased regularly and out of necessity. Traditionally, these items have fewer markdowns and lower profitmargins. While price shifts may raise or lower demand for certain kinds of products, the demand for staple goods rarely changes whenprices changeScrimA sheer fabric onto which pictures can be painted to be used as a transparent backdrop in the theater and as a visual merchandisingprop in storesServiceA product/service mix that offers only a service, with no accompanying product needed or wanted, such as an insurance policy.Service with accompanying productsA product/service mix in which a service is the primary offering, such as interior decorating, and products, such as curtains and carpet,are offered to accompany and augment the service.Shoplifting detection waferA small device attached to goods, especially clothing, that sets off an alarm if it leaves the store. A to z of Retailing Business
  • 22. Retailing DictionarySpecialty productsProducts that solve a specific want or need for specific customers, often expensive products with special characteristics or brandidentity.Specification buyingDemands made by retailers and wholesalers to manufacturers of the products they sponsor and sell.Store OperationsIncludes all functions of operating a store except merchandising, such as customer service, protection, maintenance, and distribution.String TicketA pricing ticket attached with a piece of string.Supportive ServicesFree services offered to customers to increase convenience, make shopping easier, and entice customers to buy more.Sales PromotionA time-limited period when a product or group of products are given extra publicity and intense marketing support. Generally used togive a boost to sales of a certain product category/brand.Secondary PackagingThe container in which several finished packs would be distributed (and sometimes displayed in).Self-ServiceA store where customers can pick the goods directly from the display and take them to the checkout for payment.Shadow BoxA cabinet display built into a wall.Same Store SalesA statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. This statistic allowsinvestors to determine what portion of new sales has come from sales growth and what portion from the opening of new stores. Samestore sales are usually released by retail companies on a monthly basis. This is also known as "comps."T-StandA type of merchandising fixture commonly used to display apparel, with either straight or waterfall arms.Triple Net LeaseA triple net lease is a rental agreement on a commercial property where the tenant agrees to pay all real estate taxes, buildinginsurance, and maintenance on the propertyT-StandA type of merchandising fixture commonly used to display apparel, with either straight or waterfall arms.Triple Net LeaseA triple net lease is a rental agreement on a commercial property where the tenant agrees to pay all real estate taxes, buildinginsurance, and maintenance on the property A to z of Retailing Business