Retail Dic...

8/9/2019 Retail Dic...

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Retail 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 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.

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.


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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 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.

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.


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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.

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.


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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 thanin 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.


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Footfall

In the retail parlance, the number of people visiting 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


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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


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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 standalone 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.


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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


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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


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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


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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


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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.


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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 salespresentation 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.


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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.


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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.


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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 monthand 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.


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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 theshelves, 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.


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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


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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.


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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.


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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


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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


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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


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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 relativelyuniform 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.


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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


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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.

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.


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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 .


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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.


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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.

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


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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.


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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.


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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


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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 havefewer 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.


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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 forpayment.

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.


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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.

Vertical Retailer

Retailers that sell only their own branded merchandise; these goods are not found anywhere except in

their own stores or catelogues (also called lifestyle retailer).

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