How to Understand Retail Terminology
Let’s be honest – the retail world can feel a bit overwhelming at times. From ‘planograms’ to ‘EPOS’, it’s easy to get lost in the jargon. But understanding these core terms isn’t just about impressing your colleagues; it’s about boosting efficiency, making smarter decisions, and ultimately, driving sales. Here’s a breakdown of the most common retail terminology and their meanings.
Building a Solid Foundation: Essential Retail Terminolgy
This retail terminology list covers everything from product management to customer journeys – understanding these terms will make anybody’s job within the retail industry easier.
- SKU (Stock Keeping Unit): Simply put, it’s a unique number assigned to each product within a retailer’s system. This is how you track and manage your stock.
- UPC (Universal Product Code): The standard barcode that you’ll find on most products. It’s a 12-digit code that’s essential for checkout.
- EAN (European Article Number): The European equivalent of the UPC – a 13-digit barcode, often used in Europe.
- Assortment: This refers to the depth – the number of different variations of a product you stock within a specific category. For example, a shoe brand might have 20 different colours of a particular sneaker.
- Category: Retailers break down their product range into groups based on similarities – think ‘Men’s Shirts,’ ‘Women’s Jeans,’ or ‘Kitchen Appliances’.
- Variety: This is the breadth – the total number of different categories you offer in your store or department. A large department store will have a much wider variety than a specialist boutique.
- Backup Stock (Buffer Stock/Safety Stock): This is extra stock you hold to protect against unexpected surges in demand or delays in deliveries. It’s crucial for ensuring you don’t run out of popular items.
- Space Management: Optimising the layout of your store to maximise sales. This involves considering customer flow, product placement, and visual merchandising.
- Planogram: A detailed diagram showing exactly where each product should be placed on shelves and displays. Planograms are designed to guide merchandising and encourage impulse purchases.
- Shrinkage: Losses of stock due to shoplifting, damage, misplacement, or administrative errors. Minimising shrinkage is a critical part of retail management.
- Stock Out: When a particular product is unavailable – and a key metric to avoid!
- Omni-Channel: A strategy using multiple sales channels – your physical store, your website, social media, and even phone orders – to create a seamless customer experience.
- PLC (Product Life Cycle): Every product goes through phases. The four main stages are: Introduction (launching the product), Growth (increasing sales), Maturity (sales stabilise), and Decline (sales decrease).
- POS (Point of Sale): This is the checkout counter – where sales are processed and payments are taken.
- EPOS (Electronic Point of Sale): Modern checkout systems that use electronic devices to record sales, manage inventory, and track customer data.
Understanding retail terminolgy will make anybody’s job within the retail industry easier.