Retail Industry – Glossary

Here’s what you need to know about the retail industry.

Anchor store
The large – if not the largest – retail stores in malls or shopping centers. These department or grocery stores drive traffic supporting its smaller retailers in the same center. Also known as department stores, draw tenant, anchor tenant, or key tenant.

Brick-and-mortar store
The term brick-and-mortar is used more often to describe physical buildings for retail stores (owned or leased), factory production facilities, or warehouses for operations.

Backorder
When quantities of a certain item cannot be delivered by the requested date, it’s on backorder.

Big-box store
A big-box store is a retailer usually owned by a major chain such as Target or Best Buy.

Cross merchandising
Cross merchandising is a practice retailers arrange where products from different categories or vendors are displayed or pictured together to create additional sales – or add-on sales. For example, a grocery store may display an end cap of chips, soda and other party foods around the time of Super Bowl.

Consumer packaged goods
Consumer packaged goods are products ready to sell to the consumer when they arrive at the retailer (from the wholesaler or manufacturer).

Drop shipping
A supply chain management process in which retailers transfer customer orders to another manufacturer, another retailer or another wholesale who then ships the product directly to the consumer.

Flash sales
Flash sales are sales available to consumers for a brief amount of time.

Franchise
A method allowing some business to epxand by allocating their goods and services through a licensing relationship.

Merchandising
The way merchandise is presented and displayed by a retailer; merchandising should encourage customers to purchase the products.

Mystery shopping
Mystery shopping is the act of a market research company or the retailer, sending decoy shoppers to assess, appraise and review a retailer’s customer experience: the products offered, the store’s associate’s customer service, etc.

Net sales
Net sales are the amount of revenue a retailer earns during a precise amount of time after substracting returns from customers, sale items and discounts.

Omnichannel
The integrations of different methods by which consumers can shop for a good or service, i.e., brick-and-mortar store, online, catalog or phone.

Procurement
A process of sourcing, negotiating, and tactically choosing products and goods for retailers.

Stock-keeping unit (SKU)
A SKU is a number (often eight alphanumeric digits) retailers assign to products to keep track of inventory and ensure stock is managed internally.

Wholesale
The sale of goods – such as food or hard lines – in large quantities to retailers, who then resell them to consumers.

Phygital
The blend of physical with digital. Phygital retail comprises of physical retail outlet that uses digital data and methods to boost sales.

Click & Collect
A shopping facility that lets a customer order a product online and pick it up from a store.

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