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5o Retail Terms
5o Retail Terms
5o Retail Terms
Anchor Store
Also known as “draw tenant”, “anchor tenant”, or “key tenant”, an anchor store is one of the
largest—if not the largest—store in a mall or shopping center. It’s usually a well-known
department store or retail chain. Anchor stores are great neighbors to have if you’re a small or
medium retailer. These stores bring in a ton of foot traffic into your vicinity, which opens up
more opportunities for your business to get discovered.
In retail, AR can be implemented in several ways, including shoppable catalogs, apps that let you
see in-store deals when you point your phone’s camera towards a specific direction, or even
fitting room simulators.
Case in point: Topshop teamed up with AR Door to create a virtual fitting room for its Moscow
location. Using augmented reality technology and Microsoft Kinect, they were able to create a
fitting room simulator that allowed the customer to see how a dress looks on her without actually
trying it on. A built-in camera tracked the shopper’s body and superimposed a 3D model of the
garment, so the dress moved and turned with the customer.
4. Big Data
This refers to sets of data so massive, it would take sophisticated programs and really smart data
scientists to make sense of it all. When you’re dealing with Big Data, you’re not just looking at
traffic or conversions; you’re analyzing behavior (clicks, open rates, time spent on site),
demographic (Census information, income), social information (tweets, shares, etc.), timing, and
so much more. Think of it as analytics on steroids.
Crunching the numbers, analyzing, and extracting action steps from all that information takes a
ton of work, but it usually pays off for retailers because Big Data gives them tremendous
consumer insights. Big Data allows businesses to personalize each customer’s experience and it
even lets them predict consumer behavior (i.e. when a customer is in the mood to buy, when
they’re about to lapse, etc.).
Take Macy’s, for example. With the help of IBM, the US retailer is able to gather torrents of
customer information and behavior at a variety of touch points in order to serve up personalized
experiences and recommendations.
According to IBM’s report, Macy’s combines customer preferences with recent purchase data to
deliver “dynamically customized recommendations (such as a complementary clothing accessory
or color) or personalized promotions.” Macy’s implements this across multiple channels (i.e.
Macy’s physical store or macys.com) to give the customer a seamless experience no matter
where they’re shopping.
On top of that, the retailer also factors in social engagement such as blogs and gift registries to
further connect with its customers.
So, if say, a returning customer walks in, the store’s beacon can send her a “welcome back!”
message, and when that shopper passes by the footwear section and the merchant happens to
have a sale on shoes, the store can give her a heads up via a smartphone alert.
Beacons can also be used for in-store analytics purposes. Most solutions come with tools for
measuring foot traffic, dwell time, and more, enabling retailers to gather data and further get to
know their customers and their store.
7. Cashwrap
This is the main checkout area of a retail store. In other words, this is where shoppers head to
when they’re ready to pay for their items. It’s where merchants set up their POS system and ring
up sales. Most cashwraps even have shelves containing merchandise that shoppers can pick up
on their way out.
9. Cross Merchandising
This refers to the practice of displaying or putting together products from different categories
to drive add-on sales. Picture this: You’re at the grocery store browsing the liquor section when
you see a pack of lemons tacked to the tequila shelf. This is cross merchandising in action.
Groceries know that people often take lemons with their tequila shots, so they strategically
placed the two items together.
10. Clienteling
This is a technique used by retail associates to deepen their relationship with each customer.
Clienteling involves relationship-building activities such as using CRM software to collect and
track customer data, providing personalized shopping experiences, and following up with
shoppers in a relevant and timely way.
11. Contactless Payments
This refers to a system of payments powered by near field communication (NFC). They include
NFC-enabled credit and debit cards, smart cards, and smartphones that allow customers to
complete transactions without physically touching a payment terminal.
Instead of having to swipe their card, shoppers can pay for their purchases just by waving their
card or phone over a terminal.
Retailers can get rid of dead or unmoving inventory through sales or donations, but the best way
to deal with dead stock is not to have it in the first place. Analyze the demand in your market to
determine the items that you should keep in stock. Also, be sure to manage your inventory
well and keep communication lines open between your sales and your purchasing departments.
Dynamic Clustering is all about identifying patterns or opportunities in various and diverse
segments to bring about the best strategies for each cluster. Let’s say you’re a national US
apparel chain that operates stores in all 50 states. By using Dynamic Clustering, you are able to
identify similar patterns and trends in four different states, namely California, New York,
Nevada, and Massachusetts. This then enables you to make better and more relevant sales,
purchasing, or marketing decisions for that cluster of states.
15. Etailing
Short for “Electronic Retailing”, this is the practice of selling goods over the Internet. Etailers
come in all shapes and sizes, from big name giants such as Amazon and Zappos to neighborhood
mom & pop stores selling items on their website.
16. EMV
EMV was developed Europay®, Mastercard® and Visa® (hence the name) as a way to combat
fraud. It’s a technology that powers chip-and-pin cards, a breed of debit and credit cards that’s
far more secure than magnetic stripe (i.e. swipe-and-sign) cards.
See, unlike a mag stripe card, which stores static information about the cardholder, an EMV card
is embedded with a chip, which creates a unique code that changes for every transaction. This
makes it less susceptible to fraud because even if a hacker manages to counterfeit a chip card, the
original transaction code is not usable again and the card would get declined.
One example of a retailer using endless aisles is Nike. Their store Pasadena CA has large touch
screens that enable customers to browse the retailer’s entire inventory. If they see something they
like, the customer can purchase it in-store and Nike will ship the item to them.
18. EPOS
EPOS is an abbreviation for electronic point of sale. Basically, any computerized system used to
record sales and control inventory. Learn more about EPOS for retail.
Zulily, a shopping site for moms, babies and kids, is an example of a flash sale website. Zulily’s
events “open at 6am PDT and usually last 72 hours (some are one-day sales). After that, they
scoot away to make room for new events.”
That’s why customers are encouraged to shop early and shop fast, so they can get their hands on
the widest selection. Zulily does announce its flash sales in advance so moms can mark their
calendars and prep for the sales they wish to attend.
20. Green Retailing
This refers to the environmentally-friendly practices that retailers get into. These can include
switching a product’s packaging to a recyclable one or giving customers reusable shopping bags
instead of plastic. Other practices, such adding solar panels or replacing store lighting with
energy-saving alternatives can also be considered as green retailing.
The use of mobile POS systems is extremely common in High Speed Retail. This is because
aside from being fast, lightweight and easy to set up, mPOS solutions run in the cloud and can
update every aspect of the business (inventory, CRM, payments, etc) in real-time, thus helping
merchants stay up-to-date at all times. Most mPOS systems also come with convenient
capabilities such as emailing receipts and processing mobile payments, making it easy for High
Speed Retailers to conduct business much faster.
How does this apply to retail? Forward-thinking retailers are now using connected devices to
streamline in-store shopping and communicate with shoppers. A few examples of IoT in action
include merchants using in-store devices to track real-time shopping behaviors and send tailored
offers to customers.
28. Markdown
Unlike limited-time sales or promotional discounts, a markdown is a devaluation of a product
due to its inability to be sold at the intended price. The price of the merchandise is permanently
reduced to move inventory and make room for new products.
Pine, in his Harvard Business Review piece entitled Beyond Mass Customization, advised
businesses to take their offering (i.e. product or service) and break it apart into modular elements,
similar to LEGO blocks.
According to Pine: What can you build with LEGO bricks? Anything you want, thanks to the
large number of modules (with different sizes, different shapes, different colors) and the simple
and elegant linkage system for snapping them together.
Then you must work with each individual customer, creating a design experience through some
sort of design tool that helps customers figure out what they want.
If you want to see great Mass Customization in action, take a look at what NIKE is doing.
Through its NIKEiD service, the shoe retailer gives customers a truly personalized footwear
experience, allowing them to build their own pair from scratch.
Customers can simply go online, select the type of shoe they want to design (i.e. running, tennis
shoes, etc.), and customize its look, fit, and performance. Everything about the shoe can be
personalized, from the material that it’s made of, to the color of the famous NIKE swoosh on the
side. Once they’re satisfied, shoppers can just hit the “add to cart” button and proceed to
checkout.
It’s important to note that omni-channel goes beyond simply being on multiple channels or
platforms. Just because you have a website, a mobile app, and a physical store doesn’t
necessarily mean that you’re an omni-channel retailer. In order to truly be one, you must fuse all
those channels together so they give customers a seamless experience.
35. Planogram
This is a visual representation that shows how merchandise should be arranged on store shelves
in order to drive more sales. It’s a model that indicates the best placement and positioning of
your merchandise. Remember that product positioning can influence consumers’ purchases,
so planning how they’re displayed and organized can maximize sales. Planograms can also guide
and assist in store mapping and they enable retailers use space more effectively.
36. Pop-Up Store
Pop-Up-Stores are short-term shops or sales spaces that come and go within a given period.
These stores can be set up in empty retail spaces, mall booths, or even in the middle of a park.
Looking to set up one for your business? Here are ten ways to save money on your pop-up store.
Louis Vuitton is a prime example of a retailer with a prestige pricing strategy. The French
fashion house implements premium pricing on all its products; it doesn’t conduct sales, nor does
it have any outlet stores.
42. RFID
An acronym for Radio Frequency Identification, RFID is a chip embedded in an item’s label or
packaging. It stores information about the product and is primarily used for tracking purposes.
Thanks to RFID technology, retailers can increase their inventory accuracy and reduce out of
stocks.
Inventory however, is only the beginning. Retailers are now looking into using RFID to get
additional customer insights that would allow them to implement more effective marketing
strategies and provide better customer experiences.
43. Self-Serve
In retail, this means letting customers select and pay for goods themselves, without requiring the
assistance of a live staff member. Vending machines, kiosks, as well as self-serve checkout lanes
in grocery stores all fall under this category.
44. Shrinkage
This pertains to the difference between the amount of stock that you have on paper and the actual
stock you have available. In other words, it’s a reduction in inventory that isn’t caused by legit
sales. The common causes of shrinkage include employee theft, shoplifting, administrative
errors, and supplier fraud.
You can prevent shrinkage by beefing up security in your store. Monitor customers, employees,
and vendors/suppliers for suspicious behavior. Have accountability policies to reduce human
error. Also, do inventory counts regularly especially when it comes to high-theft items.
Mashable provides a great rundown of the types of Social Commerce on the web. According to
the site, the seven species of Social Commerce are:
As an example, let’s look at Threadless. Threadless is an online apparel store that sources its
designs from its community. The company enables artists to earn money and recognition for
their designs by allowing them to submit their creations to the site.
The Social Commerce aspect kicks in when the Threadless community votes and scores the
submissions in order to determine which designs are chosen for print. The winning artists are
then paid with cash prizes as well as royalties from their shirt sales.
47. Showrooming
Showrooming is the consumer practice of examining products in a store, only to buy them for a
lower price online. Shopping and price check apps perpetuate showrooming because they allow
shoppers to compare prices and products using their phone as they browse the store.
48. Tribetailing
This term refers to the retail practice of tailoring everything you do--from your store design, to
your ads, to your employees--for a specific tribe or group of people. With Tribetailing, you’re
not trying to please the public or the masses. Instead, you’re zeroing in on a particular niche and
are catering to them and only them.
50. Webrooming
This is the practice of looking at products online before buying them in actual brick-and-mortar
stores. It’s the opposite of showrooming, where customers look at products in physical stores
only to buy them online. Image-based websites and social networks such as Pinterest or
Instagram help perpetuate webrooming. Users see items that they like while browsing these sites
and then go out in the real world to test or try them on.
Wearable technology can have some interesting applications in retail. For instance, merchants
can potentially use them to gain insights into customer movement, activity, and behavior as they
move about the real world.
On the backend, wearable tech can allow retail employees to do tasks such inventory counts
hands-free. It can also aid communication by enabling team members to communicate with each
other without having to use hand-held devices.