Retailing Dictionary A To Z Retail Business

Retailing Management

RETAILING DICTIONARY

A to Z of Retailing Business

Retailing Dictionary

ANCHOR STORE
A major retail store in a shopping centre; used to drive business to smaller retailers. These larger department stores or grocery stores
are generally part of a retail chain and are the prominent business in a shopping mall.

Asset Turnover
A performance measure based on a retailers net sales and total assets. It is equal to net sales divided by total assets.

Big Box Stores
Large stand-alone store with varying market niches.

Brand
A brand is a name, symbol or other identifying mark for a sellers goods or services. It is distinct from other sellers.

Brand Awareness
A gauge of marketing effectiveness measured by the ability of a customer to recognize and/or recall a name, image or other mark
associated with a particular brand.

Break Even Point
The point in business where the sales equal the expenses. There is no profit and no loss.

Brick & Mortar
Brick and mortar store refers to retail shops that are located in a building as opposed to an online shopping destination, door-to-door
sales, kiosk or other similar site not housed within a structure.

Balanced Tenancy
Occurs when stores in a planned shopping center complement each other in the quality and variety of their product offerings. The kind
and number of stores are linked to the overall needs of the surrounding population.

Basic Stock List
A to z of Retailing Business

Specifies the inventory level, color, brand, style category, size, package, and so on for every staple item carried by the retailer.

Battle of the Brands
When retailers and manufacturers compete for shelf space allocated to various brands and for control over display locations.

Bundled Pricing
Involves a retailer providing a number of services for one basic price; most often seen in mobility service packages for example.

Black Friday
In retail, Black Friday is best known as the shopping day after Thanksgiving in the United Sates when retail stores generate their
highest sales. Black refers to the accounting term as a business moves from loses in red ink to gains in black ink.

Chain Store
One of a number of retail stores under the same ownership and dealing in the same merchandise.

Convenience products
Merchandise that is purchased frequently, without advance planning, including staples, impulse items, and emergency items.

Co-operative
A group in which several retailers pool their resources to buy products at a discount from manufacturers; also called group buying.

Catchment Area
The area from where the majority of a shops customers are located.

Category Killer Store
An especially large specialty store featuring an enormous selection in its product category and relatively low prices. It draws consumers
from wide geographic areas.

Chain
Multiple retail units under common ownership that engage in some level of centralized (or coordinated) purchasing and decision
making.

Cash Flow
Relates to the amount and timing of revenues received to the amount and timing of expenditures made during a specific time period. In
other words, the movement of money in and out of a business and the resulting availability of cash.

Capital Expenditures
Retail expenditures that are long-term investments in fixed assets.

Cross Merchandising
A marketing practice based on lateral marketing principle, which includes displaying products from complementary categories, in order
to generate incremental sales. The practice has assumed wider meanings to include cross-promotions and display of non-
complementary merchandise too.

Category specialist
A retail store that offers merchandise in a narrow category but a large assortment of merchandise within that category, usually at
competitive prices and dominates a retail category. It can also be termed as `Category Killer`.

Cannibalism
The impact that a new location will have on an existing store’s sales in a chain corporation.

Cyber Monday
Cyber Monday, the Monday following Thanksgiving in the U.S., is one of the busiest shopping days of the year for online retailers. The
term was coined by Shop.org, a division of National Retail Federation. Retailers notice a spike in sales on this day as many consumers
chose 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 to
find bargains. Many retailers use Cyber Monday to kick off the holiday shopping season by offering special promotions

Department Store
A large retail unit with an extensive assortment (width and depth) of goods and services that is organized into separate departments for
purposes of buying, promotion, customer service, and control.


Depth of Assortment
Refers to the variety in any one goods/service category with which a retailer is involved.

Discount Store
A self-service retail store with low markups. Example: Wal-Mart, Kmart.

Destination Retailer
A retailer to whom consumers will make a special shopping trip. The destination may be a store, a catalog, or a Web site.

Destination Store
A retail outlet with a trading area much larger than that of a competitor with a less unique appeal to customers. It offers a better
merchandise assortment in its product category(ies), promotes more extensively, and creates a stronger image.

Durable Goods/Durables
Products that can be used frequently and have a long life expectancy, such as furniture, jewelry, and major appliances.

Dry Grocery
Generally food that is not fresh, eg. Masalas/condiments.

Dead Areas
Awkward spaces where normal displays cannot be set up.

Downsizing
Exists when unprofitable stores are closed or divisions are sold off by retailers dissatisfied with their performance.

Electronic Article Surveillance
Involves attaching specially designed tags or labels to products to curb shoplifting.

Ensemble Display
An interior display whereby coordinated merchandise is grouped and displayed together.

Etailing
Internet 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 Entry
Occurs 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 selling
season.

End –User
The person who uses a product that has been manufactured and marketed. Based on the idea that the “end goal” of a manufactured
product is for it to be useful to the consumer
(FIFO) First-in, first out
A method of stock rotation in which goods that are received first are sold first. Newly received product is stocked behind the older
merchandise.

Fad
A fashion that gains and loses popularity very quickly.

Factory Outlet
A manufacturer-owned store selling that firms closeouts, discontinued merchandise, irregulars, canceled orders, and, sometimes, in-
season, first-quality.

Flea Market
Has many retail vendors offering a range of products at discount prices in plain surroundings. Many flea markets are located in
nontraditional sites not normally associated with retailing. They may be indoor or outdoor.

Food-Based Superstore

A retailer that is larger and more diversified than a conventional supermarket but usually smaller and less diversified than a combination
store. It caters to consumers complete grocery needs and offers them the ability to buy fill-in general merchandise.

Forecourt Retail
One stop solution to all the demands of customers coming to petrol pumps.

Food court
an area as in a shopping mall where fast food is sold usually around a common eating area.

Full-Line Discount Store
A type of department store characterized by (1) a broad merchandise assortment; (2) centralized checkout service; (3) merchandise
normally sold by self-service with minimal assistance; (4) no catalog order service; (5) private-brand nondurable goods and well-known
manufacturer-brand durable goods; (6) hard goods accounting for a much greater percentage of sales than at traditional department
stores; (7) a relatively inexpensive building, equipment, and fixtures; and (8) less emphasis on credit sales than in full-service stores.

Franchise
A trading entity such as a marketing tool or method, a product or group of products or simply a trade brand.

Franchisee
The party that sells goods and services within the framework of the franchise

Franchisor
The party that established (manages) the franchise.

Footfall
In the retail parlance, the number of people visting a retail outlet in a period of time is called a footfall. Even though a footfall indicates
the number of people who visited a retail outlet, it is only when footfalls are converted into purchases, that makes for retail success.

Franchise
The right under which a franchisee person or company may market a product or service, as granted by the franchisor (the proprietary
owner). A franchise agreement is the contract defining the terms and conditions between the franchisor and franchisee. Franchises
often give exclusive rights for a specified area

Gross Margin
Gross margin is the difference between what an item costs and for what it sells.

Goods
Tangible products for sale that can be held or touched.

General Store
A shop that sells a variety of goods including food.

Generic Brands
No-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 Retailing
Focuses on the sale of tangible (physical) products.

Goods/Service Category
A retail firm line of business.

Gray Market Goods
Brand-name products purchased in foreign markets or goods transshipped from other retailers. They are often sold at low prices by
unauthorized dealers.

Generic Brands
No-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.


High Street
a main street considered as important retail area

Hardlines
A store department or product line primarily consisting of merchandise such as hardware, house wares, automotive, electronics,
sporting goods, health and beauty aids or toys

Impulse Purchase
Products that people purchase without planning for it, such as magazines or candy bars

Independent
A retailer that owns only one retail unit

Initial Markup (at Retail)
Based on the original retail value assigned to merchandise less the merchandise costs, expressed as a percentage of the original retail
price

Inventory Management
Involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related
costs are kept in check.

Inventory Shrinkage
Involves employee theft, customer shoplifting, and vendor fraud

Isolated Store
A freestanding retail outlet located on either a highway or a street. There are no adjacent retailers with which this type of store shares
traffic.

Inventory turnover
A ratio measuring the adequacy and efficiency of the inventory balance, calculated by dividing the cost of goods sold by the amount of
the average inventory

KIOSK
The term kiosk, as related to retailing, refers to a small stand-alone structure used as a point of purchase. This can be either a
computer or display screen used to disseminate information to customers or may be a free-standing, full-service retail location. Kiosks
are often found in malls and other high-traffic locations.

KIRANA STORES
Traditional formats of low cost retailing stores in India, mostly as stand alone family run, neighbourhood shops. Major strength being
familiarization with immediate and regular customers, provision of credit facility, home delivery etc.

Keystone Pricing
Keystone pricing is a method of marking merchandise for resells to an amount that is double the wholesale price.

Loss Leader
A selected item that is deliberately sold at less than cost in order to attract customers.

Loss Prevention
Loss prevention is the act of reducing the amount of theft and shrinkage within a business.

Layaway
Layaway is the act of taking a deposit to store merchandise for a customer to purchase at a later date.

Leased department
A part of a department store that is actually leased out to another company and operated as an independent store within the
department store; common with cosmetics companies.

Limited line
Describes a department store that carries a limited amount of merchandise, usually concentrating on clothing, accessories, and beauty
supplies.



Leader Pricing
Occurs when a retailer advertises and sells selected items in its goods/service assortment at less than usual profit margins. The goal is
to 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.

Liabilities
Any 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 the
current cost structure.

Limited Decision Making
Occurs 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 of
them.

Logistics
The total process of moving goods from a manufacturer to a customer in the most timely and cost-efficient manner possible
Minimum Advertised Price
A suppliers pricing policy that does not permit its resellers to advertise prices below some specified amount. It can include the resellers
retail price as well.

Margin
The amount of gross profit made when an item is sold.

Merchandise Mix
A merchandise mix is the breadth and depth of the products carried by retailers. Also known as product assortment.

Mystery Shopping
A quality check system employed by companies. Dummy customers are sent into stores to check upon quality of service, behaviour and
knowledge of store employees etc.

Merchandising plan
A strategy for actual and projected sales for a specific period of time.

Merger
The combining of two or more retail organizations into one company.

Multiline drugstore
A store that sells a variety of health and beauty products, plus some small appliances and household items, in addition to prescription
drugs.

Merchandising
The 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 Lease
Has a provision allowing for rent increases if a property owner taxes, heating bills, insurance, or other expenses rise beyond a certain
point.

Manufacturer (National) Brands
Produced and controlled by manufacturers. They are usually well known, supported by manufacturer ads, somewhat pre-sold to
consumers, require limited retailer investment, and often represent maximum product quality to consumers.



Marketing Research in Retailing
Entails the collection and analysis of information relating to specific issues or problems facing a retailer.

Marketing Research Process
Embodies a series of activities: defining the issue or problem to be studied, examining secondary data, generating primary data (if
needed), analyzing data, making recommendations, and implementing findings.

Market Penetration
A pricing strategy in which a retailer seeks to achieve large revenues by setting low prices and selling a high unit volume.

Market-Segment Product Groupings
Place various products appealing to a given target market together.

Market Skimming
A pricing strategy wherein a firm charges premium prices and attracts customers less concerned with price than service, assortment,
and status.

Midnight sale
A centrewide, merchants` association-sponsored, low-end, off-price promotion, generally continuing untill 11 p.m or midnight: one night
only

Markdown
Planned reduction in the selling price of an item, usually to take effect either within a certain number of days after seasonal
merchandise is received or at a specific date. Also, A reduction from selling price to meet the lower price of another retailer, adapt to
inventory overstocking, clear out shopworn merchandise, reduce assortments of odds and ends, and increase customer traffic.

Markdown Percentage
The 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 Pricing
A form of cost-oriented pricing in which a retailer sets prices by adding per-unit merchandise costs, operating expenses, and desired
profit.

Marquee
A sign used to display a store name and/or logo.

Massed Promotion Effort
Used by retailers that promote mostly in one or two seasons.

Mass Marketing
Selling goods and services to a broad spectrum of consumers

Mass Merchandising
A positioning approach whereby retailers offer a discount or value-oriented image, a wide and/or deep merchandise assortment, and
large store facilities.

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

Megamall
An enormous planned shopping center with 1-million-plus square feet of retail space, multiple anchor stores, up to several hundred
specialty stores, food courts, and entertainment facilities.

Membership Club
Aims at price-conscious consumers, who must be members to shop.



Memorandum Purchase
Occurs when items are not paid for by the retailer until they are sold. The retailer can return unsold merchandise. However, it takes title
on delivery and is responsible for damages

Merchandise Available for Sale
Equals beginning inventory, purchases, and transportation charges.

Merchandise Buying and Handling Process
Comprised of an integrated and systematic sequence of steps from establishing a buying organization through regular re-evaluation.

Merchandise Space
The area where nondisplayed items are kept in stock or inventory.

Merchandising
Consists of the activities involved in acquiring particular goods and/or services and making them available at the places, times, and
prices and in the quantity to enable a retailer to reach its goals.

Mergers
Involve the combination of separately owned retail firms.

Micro-Merchandising
A strategy whereby a firm adjusts shelf-space allocations to respond to customer and other differences among local markets.

Minimum-Price Laws
A strategy whereby a firm adjusts shelf-space allocations to respond to customer and other differences among local markets.

Model Stock Approach
A method of determining the amount of floor space to carry and display a proper merchandise assortment.

Model Stock Plan
The planned composition of fashion goods, which reflects the mix of merchandise available based on expected sales. The model stock
plan indicates product lines, colors, and size distributions.

Monthly Sales Index
A measure of sales seasonality that is calculated by dividing each month actual sales by average monthly sales and then multiplying
the results by 100.

Mother Hen with Branch Store Chickens Organization
Exists when headquarters executives oversee and operate the branches. This works well if there are few branches and the buying
preferences of branch customers are similar to customers of the main store.

Motives
The reasons for consumers behavior.

Multidimensional Scaling
A statistical technique that allows attitudinal data to be collected for several attributes in a manner that allows data analysis to produce a
single overall rating of a retailer (rather than a profile of individual characteristics).

Multiple-Unit Pricing
A policy whereby a retailer offers discounts to customers who buy in quantity.

Mom & Pop Stores
Small independently run stores.

M Commerce
(mobile commerce) is the buying and selling of goods and services through wireless handheld devices such as cellular telephone and
personal digital assistants (PDAs). Known as next-generation e-commerce, m-commerce enables users to access the Internet without
needing to find a place to plug in.



Maintained markup
The difference between the net sales and the gross cost of merchandise sold. it is the margin on sales before making adjustments for
cash discounts earned and alternation costs.

Non durable goods
Products that are purchased frequently and used in a short period of time, such as beauty supplies and cosmetics.

Nonmarking
A 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 Approach
A sales technique based on the principle that each customer has different wants; thus, a sales presentation should be geared to the
demands of the individual.

Negotiated Pricing
Occurs when a retailer works out prices with individual customers because a unique or complex service is involved and a one-time price
must 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 leading
retailer 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 Center
A planned shopping facility with the largest store being a supermarket and/or a drugstore. It serves 3,000 to 50,000 people who are
within 15 minutes driving time (usually fewer than 10 minutes).

Net Lease
Calls for all maintenance costs, such as heating, electricity, insurance, and interior repair, to be paid by the retailer -- which is
responsible for their satisfactory quality.

Net Profit
Equals gross profit minus retail operating expenses.

Net Profit Before Taxes
The profit earned after all costs have been deducted.

Net Profit Margin
A performance measure based on a retailers net profit and net sales. It is equal to net profit divided by net sales.

Net Sales
The revenues received by a retailer during a given time period after deducting customer returns, markdowns, and employee discounts.

Net Worth
Computed as a retailers assets minus its liabilities.

Never-Out List
Used when a retailer plans stock levels for best-sellers. Items accounting for high sales volume are stocked in a manner that ensures
they are always available.

Niche Retailing
Enables retailers to identify customer segments and deploy unique strategies to address the desires of those segments.

Nondisguised Survey
A technique in which the respondent is told the real purpose of a research study.

Nongoods Services
The area of service retailing in which intangible personal services (rather than goods) are offered to consumers -- who experience
services rather than possess them.

Nonprobability Sample

An approach in which stores, products, or customers are chosen by the researcher -- based on judgment or convenience.

Nonstore Retailing
Utilizes strategy mixes that are not store-based to reach consumers and complete transactions. It occurs via direct marketing, direct
selling, and vending machines.

Odd-Even Pricing
A form of psychological pricing that suggests buyers are more sensitive to certain ending digits.

Open-to-Buy
Merchandise budgeted for purchase during a certain time period that has not yet been ordered.

Open background
Describes a window display with a completely unobstructed view of the interior of the store.

Overerr
A mistake made when an employee enters an amount into the register that is more than the sale price.

One-stop-shop
Retail outlet that caters for virtually every need within a product or service group or across all products and services.

Outlet
Shop.

Objective-and-Task Method
A promotional budgeting technique by which a retailer clearly defines its promotional goals and then prepares a budget to satisfy these
goals.

Objectives
The long-run and short-run performance targets that a retailer hopes to attain. Goals can involve sales, profit, satisfaction of publics,
and image.

Observation
A form of research in which present behavior or the results of past behavior are observed and recorded. It can be human or
mechanical.

Odd Pricing
A strategy in which retail prices are set at levels below even-dollar values, such as $0.49, $4.98, and $199.

Off-Price Chain
Features brand-name apparel and accessories, footwear, linens, fabrics, cosmetics, and/or housewares and sells them at everyday low
prices in an efficient, limited-service environment.

Off-Retail Markdown Percentage
The markdown for each item or category of items as a percentage of original retail price.

One-Hundred Percent Location
The optimum site for a particular store. A location labeled as 100 percent for one firm may be less than optimal for another.

One-Price Policy
A strategy wherein a retailer charges the same price to all customers buying an item under similar conditions.

Open Credit Account
Requires a consumer to pay his or her bill in full when it is due.

Open-to-Buy
The difference between planned purchases and the purchase commitments already made by a buyer for a given time period, often a
month. It represents the amount the buyer has left to spend for that month and is reduced each time a purchase is made.

Operating Expenditures

The short-term selling and administrative costs of running a business.

Operating Expenses
The cost of running a retail business.

Operations Management
The 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 Buying
Negotiating special low prices for merchandise whose sales have not lived up to expectations, end-of-season goods, items consumers
have returned to the manufacturer or another retailer, and closeouts

Opportunities
The marketplace openings that exist because other retailers have not yet capitalized on them.

Opportunity Costs
Involve forgoing possible benefits that may occur if a retailer could make expenditures in another opportunity rather than the one
chosen.

Option Credit Account
A 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 Salesperson
Actively involved with informing and persuading customers, and in closing sales. This is a true "sales" employee.

Order Lead Time
The period from the date an order is placed by a retailer to the date merchandise is ready for sale (received, price-marked, and put on
the selling floor).

Order-Taking Salesperson
Involved in routine clerical and sales functions, such as setting up displays, placing inventory on the shelves, answering simple
questions, filling orders, and ringing up sales.

Organizational Mission
A retailers commitment to a type of business and to a distinctive role in the marketplace. It is reflected in the firms attitudes to
consumers, employees, suppliers, competitors, government, and others.

Outside Buying Organization
A company or person external to the retailer that is .

Outside Buying Organization
A company or person external to the retailer that is hired to fulfill the buying function, usually on a fee basis .

Overstored Trading Area
A 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 Services
The area of service retailing in which goods owned by consumers are repaired, improved, or maintained

Online advertising
is a form of advertising that uses the Internet and World Wide Web in order to deliver marketing messages and attract customers

Precision Retailing
Using data in information systems to make refined merchandising decisions store by store.

Planogram
Visual description, diagram or drawing of a stores layout to include placement of particular products and product categories

Profit Margin

A ratio of profitability calculated as earnings divided by revenues. It measures how much out of every dollar of sales a retail business
actually keeps in earnings

Product Life Cycle
The stages that a new product is believed to go through from the beginning to the end: Introduction, Growth, Maturity and Decline

Private Label
Products which are generally manufactured or provided by one company under another companys brand

POS
Point of Sale (POS) refers to the area of a store where customers can pay for their purchases. The term is normally used to describe
systems that record financial transactions. This could be an electric cash register or an integrated computer system which records the
data that comprises a business transaction for the sale of goods or services

Product Depth
Product depth is the number of each item or particular style of a product on the shelves. Product depth is also known as product
assortment or merchandise depth

Product Breadth
The product breadth is the variety of product lines offered by a retailer

Purchase Order
A purchase order (PO)is a written sales contract between buyer and seller detailing the exact merchandise or services to be rendered
from a single vendor

Point-of-Purchase Display
Point-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, The
checkout counters of many convenience stores are cluttered with cigarette and candy POP displays

Partial background
The rear of a window display that is partially covered, but allows customers to see through the display into the store

Patronage buying motive
A reason customers will shop at one store instead of another, can be rational or emotional

Pin ticket
The sort of price ticket used on towels and washcloths that is attached with a pin

Point-of-sale terminal
An electronic machine at a checkout station that feeds information from product tags directly into a computer.

Premarking
A system in which the manufacturer, rather than the retailer, marks merchandise with the retail price.

Preretailing
A system in which a duplicate purchase order is sent to receiving when merchandise is ordered so that as soon as the merchandise is
received, it can be marked with the correct prices.

Product / Service Mix
The number and kind of products and services a general merchandise retailer will offer.

Product / Service planning
The process of deciding what the product/service mix will be.

Profit Center
A section of a store that earns money for the retailer.

Pull policy
A promotional policy aimed at building strong consumer demand for a product.



Push policy
A promotional policy aimed at markets with the intention of getting retailers to stock a product in order to build supply in the
marketplace.

Pallet
A large flat board that is used to hold and move products.

Pitch
A plot of land used by street traders As in sales pitch, the approach, emphasis and nuances used when articulating the virtues of a
service or product.

Polyester
Synthetic polymer often used to coat household goods such as refrigerators.

Polyhook Bag
A bag that contains a small plastic hangar as an integral part of the top of the bag

Price War
A colloquial phrase denoting aggressive price reductions on the same (or similar) products by competing retailers.

Primary Packaging
The immediate packaging around the finished product.

Procurement
Obtaining Goods.

Product Offer
Products attributes, including price

Parasite Store
An outlet that does not create its own traffic and that has no real trading area of its own

Partnership
An unincorporated retail firm owned by two or more persons, each of whom has a financial interest.

Perceived Risk
The level of risk a consumer believes exists regarding the purchase of a specific good or service from a specific retailer, whether or not
that belief is factually correct.

Percentage Lease
Stipulates that rent is related to the retailers sales or profits.

Percentage-of-Sales Method
A promotional budgeting technique whereby a retailer ties its promotion budget to sales revenue.

Percentage Variation Method
An inventory-level planning method where beginning-of-month planned inventory level during any month differs from planned average
monthly stock by only one-half of that month variation from estimated average monthly sales.

Percentage Variation Method
An inventory-level planning method where beginning-of-month planned inventory level during any month differs from planned average
monthly stock by only one-half of that month's variation from estimated average monthly sales.

Performance Measures
The 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 System
Keeps a running total of the number of units handled by a retailer by ongoing record-keeping entries that adjust for sales, returns,

transfers to other departments or stores, receipt of shipments, and other transactions. It can be done manually, use tags processed by
computers, or rely on point-of-sale devices.

Personal Selling
Involves oral communication with one or more prospective customers for the purpose of making sales.

Physical Inventory System
Involves an actual counting of merchandise. A retailer using the cost method of inventory valuation and relying on a physical inventory
system can derive gross profit only as often as it conducts a full physical inventory.

Planned Shopping Center
Consists of a group of architecturally unified commercial establishments built on a site that is centrally owned or managed, designed
and operated as a unit, based on balanced tenancy, and surrounded by parking facilities.

Point-of-Purchase (POP) Display
An interior display that provides consumers with information, adds to store atmosphere, and serves a substantial promotional role.

Positioning
Enables a retailer to devise its strategy in a way that projects an image relative to its retail category and its competitors, and elicits
consumer responses to that image.

Power Center
A shopping site with (a) up to a half-dozen or so category killer stores and a mix of smaller stores or (b) several complementary stores
specializing in a product category.

Power Retailer
The status reached by a company that is dominant in some aspect of its strategy. Consumers view the company as distinctive enough
to become loyal to it and go out of their way to shop there.

Power Retailer
The status reached by a company that is dominant in some aspect of its strategy. Consumers view the company as distinctive enough
to become loyal to it and go out of their way to shop there.

Predatory Pricing
Involves large retailers that seek to destroy competition by selling goods and services at very low prices, thus causing small retailers to
go out of business. The practice is restricted by federal and state laws.

Prestige Pricing
Assumes consumers will not buy goods and services at prices deemed too low. It is based on the price-quality association.

Price Elasticity of Demand
Relates to the sensitivity of customers to price changes in terms of the quantities they will buy.

Price Guarantees
Protect retailers against possible price declines. If a retailer cannot sell an item at a given price, the manufacturer pays it; the difference
between planned retail and actual retail selling prices.

Price Line Classifications
Enable 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 of
quality.

Price Lining (2)
Used by service retailers providing a wide selection of services. A range of prices is matched to service levels.

Price-Quality Association
A concept stating that many consumers feel high prices connote high quality and low prices connote low quality.

Primary Customer Services

Those considered basic components of the retail strategy mix; they must be provided.

Primary Trading Area
Encompasses 50 percent to 80 percent of a store's customers. It is the geographic area closest to the store and possesses the highest
density of customers to population and the highest per-capita sales.

Private (Dealer) Brands
Contain names designated by wholesalers or retailers, are more profitable to retailers, are better controlled by retailers, are not sold by
competing retailers, are less expensive for consumers, and lead to customer loyalty to retailers.

Productivity
Productivity The efficiency with which a retail strategy is carried out.

Product Life Cycle
Shows the expected behavior of a good or service over its life. The traditional cycle has four stages: introduction, growth, maturity, and
decline

Product/Trademark Franchising
An arrangement in which franchised dealers acquire the identities of their suppliers by agreeing to sell the latter's products and/or
operate under suppliers' names

Profit-and-Loss (Income) Statement
Represents a summary of a retailer's revenues and expenses over a particular period of time, usually on a monthly, quarterly, and/or
yearly basis

Prototype Stores
Occur with an operations strategy that requires multiple outlets in a chain to conform to relatively uniform construction, layout, and
operations standards.

Psychological Pricing
Refers to consumer perceptions of retail prices.

Purchase Act
An exchange of money or a promise to pay for ownership or use of a good or service. Purchase variables include the place of
purchase, terms, and availability of merchandise.

Purchase-Motivation Product Groupings
Appeal to the consumer's urge to buy a product and the time he or she is willing to spend in shopping

Quantity Discount
A reduction in price based on the amount purchased. May be offered in addition to any trade discount.

Quick Response (QR) Inventory Planning
Enables a retailer to reduce the amount of inventory it keeps on hand by ordering more frequently and in lower quantity.

Retailing
The sale of goods or commodities in small quantities directly to consumers.

Reserve stock
Merchandise that is kept somewhere other than the selling floor.

Resident Buying office
An office located in a central merchandising area where buyers can receive information about products from a variety of manufacturers.

Retailers
Businesses that buy goods from wholesalers or manufacturers and resell them to customers.

Retailing strategy
A strategic plan to adapt to changing technology and markets, and meet company goals and objectives through retailing.


Returns percentage
The relationship between returns and allowances, and sales, calculated by dividing returns and allowances by gross sales.

Ringseal ticket
A pricing ticket shaped like a butterfly bandage, used on jewelry and lampshades.

Retail Chain
A group of shops operated by the same organization.

Reverse Logistics
Reverse movement of goods through the supply chain.

Rack Display
An interior display that hangs or presents products neatly.

Rationalized Retailing
A strategy involving a high degree of centralized management control combined with strict operating procedures for every phase of
business.

Reach
The number of distinct people exposed to a retailer's ads in a specified period.

Recommendations
The stage in the research process during which the alternative approach to best solve a problem or issue is presented.

Recruitment
The activity whereby a retailer generates a list of job applicants.

Reference Groups
Influence people's thoughts and/or behavior. They may be classified as aspirational, membership, and dissociative.

Regional Shopping Center
A large, planned shopping facility appealing to a geographically dispersed market. It has at least one or two full-sized department stores
and 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' driving
time from the center.

Regression Model
A computer site-selection model that develops a series of mathematical equations showing the association between potential store
sales and various independent variables at each location under consideration

Reilly's Law of Retail Gravitation
The traditional means of trading area delineation that establishes a point of indifference between two cities or communities, so the
trading area of each can be determined

Relationship Retailing
Exists when retailers seek to establish and maintain long-term bonds with customers, rather than act as if each sales transaction is a
completely new encounter with them

Rented-Goods Services
The area of service retailing in which consumers lease and use goods for specified periods of time

Regional Shopping Center
A large, planned shopping facility appealing to a geographically dispersed market. It has at least one or two full-sized department stores
and 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' driving
time from the center.

Regression Model
A computer site-selection model that develops a series of mathematical equations showing the association between potential store
sales and various independent variables at each location under consideration

Reilly's Law of Retail Gravitation

The traditional means of trading area delineation that establishes a point of indifference between two cities or communities, so the
trading area of each can be determined

Relationship Retailing
Exists when retailers seek to establish and maintain long-term bonds with customers, rather than act as if each sales transaction is a
completely new encounter with them

Rented-Goods Services
The area of service retailing in which consumers lease and use goods for specified periods of time

Reorder Point
The stock level at which new orders must be placed

Resident Buying Office
An inside or outside buying organization that is usually situated in important merchandise centers (sources of supply) and provides
valuable data and contacts.

Retail Audit
The systematic examination and evaluation of a firm's total retailing effort or some specific aspect of it. Its purpose is to study what a
retailer is presently doing, appraise how well the firm is performing, and make recommendations for future actions

Retail Balance
Refers to the mix of stores within a district or shopping center

Retail Information System
Anticipates the information needs of retail managers; collects, organizes, and stores relevant data on a continuous basis; and directs
the flow of information to the proper retail decision makers.

Retailing Concept
Comprises these four elements: customer orientation, coordinated effort, value-driven, and goal orientation.

Retailing Effectiveness Checklist
Lets a firm systematically assess its preparedness for the future.

Retail Institution
Refers to the basic format or structure of a business. Institutions can be classified by ownership, store-based retail strategy mix, service
versus goods retail strategy mix, and nonstore-based retail strategy mix.

Retail Life Cycle
A 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 Accounting
A way by which the closing inventory value is determined by calculating the average relationship between the cost and retail values of
merchandise available for sale during a period .

Retail Organization
How a firm structures and assigns tasks (functions), policies, resources, authority, responsibilities, and rewards so as to efficiently and
effectively satisfy the needs of its target market, employees, and management.

Retail Performance Index
Encompasses five-year trends in revenue growth and profit growth, and a six-year average return on assets.

Retail Promotion
Any communication by a retailer that informs, persuades, and/or reminds the target market about any aspect of that firm.

Retail Reductions
Represent the difference between beginning inventory plus purchases during the period and sales plus ending inventory. They should
encompass anticipated markdowns, employee and other discounts, and stock shortages.



Retail Strategy
The overall plan guiding a retail firm. It has an influence on the firm's business activities and its response to market forces, such as
competition and the economy.

Return on Assets (ROA)
A performance ratio based on a retailer's net sales, net profit, and total assets.

Return on Net Worth
A performance measure based on a retailer's net profit, net sales, total assets, and net worth.

Revolving Credit Account
Allows a customer to charge items and be billed monthly on the basis of the outstanding cumulative balance.

Robinson-Patman Act
Bars manufacturers and wholesalers from discrimination in price or sales terms in selling to individual retailers if these retailers are
purchasing products of "like quality" and the effect of such discrimination would be to injure competition.

Routine Decision Making
Takes place when a consumer buys out of habit and skips steps in the purchase process

Retail Technology
systems 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 a
percentage of the original monetary outlay. The ROI ratio compares the net benefits of a project to its total costs

Sale-Leaseback
The practice of retailers building new stores and then selling them to real-estate investors who lease the property back to the retailers
on a long-term basis.

Sales Forecasting
Lets a retailer estimate expected future sales for a given time period.

Sales Opportunity Grid
Rates the promise of new goods, services, procedures, and/or store outlets across a variety of criteria.

Sales-Productivity Ratio
A method for assigning floor space on the basis of sales or profit per foot.

Saturated Trading Area
A geographic area having proper amount of retail facilities to satisfy the needs of its population for a specific good or service, as well as
to let retailers prosper.

Scenario Analysis
Lets a retailer project the future by examining the key factors that will affect its long-run performance and then preparing contingency
plans based on alternate scenarios .

Scrambled Merchandising
Lets a retailer project the future by examining the key factors that will affect its long-run performance and then preparing contingency
plans based on alternate scenarios.

Scrambled Merchandising
Occurs when a retailer adds goods and services that are unrelated to each other and to the firm's 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 junior
department store, a variety store, and/or some larger specialty stores -- in addition to many smaller stores.

Secondary Trading Area

A geographic area with an added 15 percent to 25 percent of a store's customers. It is located outside a primary trading area, and
customers are more widely dispersed.

Selective Distribution
Takes place when suppliers sell through a moderate number of retailers. This allows suppliers to have higher sales than in exclusive
distribution and lets retailers carry some competing brands.

Self-Fulfillment
A life-style concept whereby people express their growing sense of uniqueness through goods and services purchases.

Selling Against the Brand
The 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 Space
The area set aside for displays of merchandise, interactions between salespeople and customers, demonstrations, and so on.

Separate Store Organization
Treats each branch as a separate store with its own buying responsibilities. Customer needs are quickly noted, but duplication by
managers in the main store and the branches is possible

Service Blueprint
Systematically lists all the service functions to be performed and the average time expected for each one's completion.

Service Retailing
Involves transactions between companies or individuals and final consumers where the consumers do not purchase or acquire
ownership of tangible products. It encompasses rented goods, owned goods, and nongoods.

SERVQUAL
Lets retailers assess the quality of their service offerings by asking customers to react to a series of statements in five areas of
performance: reliability, responsiveness, assurance, empathy, and tangibles.

Simulation
A type of experiment whereby a computer-based program is used to manipulate the elements of a retail strategy mix rather than test
them in a real setting.

Situation Analysis
The candid evaluation of the opportunities and potential problems facing a prospective or existing retailer

Sole Proprietorship
An unincorporated retail firm owned by one person.

Sorting Process
Involves the retailer's collecting an assortment of goods and services from various sources, buying them in large quantity, and offering
to sell them to consumers in small quantities.

Specialog
Enables a firm to cater to specific needs of customer segments, emphasize a limited number of items, and reduce its catalog production
and postage costs.

Specialty Store
A general merchandise retailer that concentrates on selling a specific kind of product or service.

Standardization
A strategy of directly applying a tried and tested retail strategy to newer markets to ensure customers get the same experience across
all stores of a chain.

Standard Merchandise Classification
A detailed list of common merchandise-reporting categories devised by the National Retail Federation. Its use lets retailers contrast
their financial data with industry averages.


Stock-to-Sales Method
An inventory-level planning technique wherein a retailer wants to maintain a specified ratio of goods-on-hand to sales.

Stock Turnover
Represents the number of times during a specific period, usually one year, in which the average inventory on hand, is sold. Stock
turnover can be computed in units or money (at retail or cost).

Storability Product Groupings
Classify and display products needing special handling and storage together.

Storefront
The total physical exterior of a store. It includes the marquee, entrances, windows, lighting, and construction materials.

Store Loyalty
Exists when a consumer regularly patronizes a particular retailer (store or nonstore) that he or she knows, likes, and trusts.

Store Maintenance
Encompasses all the activities involved in managing a retailer's physical facilities.

Straight Lease
Requires the retailer to pay a fixed amount per month over the life of a lease. It is the simplest, most direct leasing arrangement.

Sales Floor
The sales floor is the location in a retail store where goods are displayed and sales transactions take place. For example, the receiving
of merchandise takes place in the stock room, but all direct sales and customer interactions are done on the sales floor

Shoplifting
Shoplifting is the taking of merchandise offered for sale without paying

Shrinkage
Retail shrinkage is a reduction or loss in inventory due to shoplifting, employee theft, paperwork errors and supplier fraud

SKU
The Stock Keeping Unit (SKU) is a number assigned to a product by a retail store to identify the price, product options and
manufacturer

Sliding
A loss prevention term referring to the act of a cashier passing merchandise around the cash register barcode scanner without actually
scanning the item

Softlines
A store department or product line primarily consisting of merchandise such as clothing, footwear, jewelery, linen and towels

Staple Goods
Staple goods are products purchased regularly and out of necessity. Traditionally, these items have fewer markdowns and lower profit
margins. While price shifts may raise or lower demand for certain kinds of products, the demand for staple goods rarely changes when
prices change

Scrim
A sheer fabric onto which pictures can be painted to be used as a transparent backdrop in the theater and as a visual merchandising
prop in stores

Service
A product/service mix that offers only a service, with no accompanying product needed or wanted, such as an insurance policy.

Service with accompanying products
A 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 wafer
A small device attached to goods, especially clothing, that sets off an alarm if it leaves the store.


Specialty products
Products that solve a specific want or need for specific customers, often expensive products with special characteristics or brand
identity.

Specification buying
Demands made by retailers and wholesalers to manufacturers of the products they sponsor and sell.

Store Operations
Includes all functions of operating a store except merchandising, such as customer service, protection, maintenance, and distribution.

String Ticket
A pricing ticket attached with a piece of string.

Supportive Services
Free services offered to customers to increase convenience, make shopping easier, and entice customers to buy more.

Sales Promotion
A time-limited period when a product or group of products are given extra publicity and intense marketing support. Generally used to
give a boost to sales of a certain product category/brand.

Secondary Packaging
The container in which several finished packs would be distributed (and sometimes displayed in).

Self-Service
A store where customers can pick the goods directly from the display and take them to the checkout for payment.

Shadow Box
A cabinet display built into a wall.

Same Store Sales
A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. This statistic allows
investors to determine what portion of new sales has come from sales growth and what portion from the opening of new stores. Same
store sales are usually released by retail companies on a monthly basis. This is also known as "comps."

T-Stand
A type of merchandising fixture commonly used to display apparel, with either straight or waterfall arms.

Triple Net Lease
A triple net lease is a rental agreement on a commercial property where the tenant agrees to pay all real estate taxes, building
insurance, and maintenance on the property

T-Stand
A type of merchandising fixture commonly used to display apparel, with either straight or waterfall arms.

Triple Net Lease
A triple net lease is a rental agreement on a commercial property where the tenant agrees to pay all real estate taxes, building
insurance, and maintenance on the property


Retailing Dictionary A To Z Retail Business

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