Anchor store: A large retail store, usually part of a retail chain, prominently located in a

shopping mall that drives business to other small retailers.

Aisle interrupter: A sign that juts into the aisle from the shelf.

Back office: The place where tasks dedicated to running the store takes place. Some of the
key activities that takes place in the back office are cash management, workforce
management, etc.

Barcode: Series of black bars and white spaces of varying widths printed on labels to
uniquely identify items. Barcodes help track information about the product, such as the
origin, description, price, promotion, tax category, etc.

Boutique: A small shopping outlet that specializes in elite and fashionable items such as
clothing and jewelry.

Brick and click: A business model that integrates brick-and-mortar stores with their
ecommerce site.

Brick and mortar: A physical retail store as opposed to a virtual or online store.

Call and Collect: A facility that allows customers to call and place an order in a store, and
then collect the product later from the store.

Cash On Delivery (COD): A type of transaction in which payment for a product is made at
the time of delivery. If the purchaser does not make payment when the good is delivered,
then the product is returned to the seller.

Click and Collect: A service provided by omni-channel retailers that allows shoppers to
purchase items online and pick them up in a physical store.

Clearance: See closeouts

Closeouts: Closeouts are leftovers from the previous season. These products are in new
condition, but are not worth advertising because only a small quantity remains and because
most manufacturers do not want to advertise last year's products. Closeouts are marked
down to half price.

Distribution center: A warehouse or other specialized building, often with refrigeration or air
conditioning, which is stocked with products to be redistributed to retailers, wholesalers, or
directly to consumers.

Demographic data: Demographic data provides retailers with information about basic
human characteristics of a market or population such as age, income, education, etc.

Dangler: A sign that sways when a consumer walks by it.

Dump bin: A bin in which products are dumped.

End-of-Day (EOD): There are several end-of-day activities that take place in a store such as
cash reconciliation.

Etailing: The practice of selling goods over the Internet.

Flyer: A form of paper advertisement used to drive store traffic and sales.

Fulfillment center: A place where orders are received, picked, packaged, and readied for
delivery to the customer.

Green retailing: The sustainable and environmentally-friendly retail practices, such as

opting for recyclable product packaging or using reusable shopping bags instead of plastic.

Glorifier: A small stage that elevates a product above other products.

Irregulars: Irregulars are products which are in new condition and are not damaged, but do
not match the samples which are on display. For instance, a fabric manufacturer may make
up a batch of fabric which comes out in a darker shade than the sample. It cannot be
shipped to customers because it does not match the sample they ordered from. However,
there is nothing wrong with the fabric itself. Irregulars are usually available at half price.

Kiosk: A small stand-alone structure used as a point of purchase. This can be either a
computer or a display screen used to disseminate information to customers. Kiosks help
create a synergy between the store and the Internet site, and provide additional product
choices that are not available in the store.

Layaway/Lay-By: An agreement between the retailer and the customer in which the retailer
puts an item on hold for the shopper until it is paid for in full. The consumer pays for the
product in installments, and will only receive the item once the payments are complete.

Lipstick board: A board on which messages are written in crayon.

Loss prevention: A set of policies, procedures, and business practices employed by stores
to prevent the loss of inventory or money.

Loyalty program: An incentive plan that allows a retail business to gather data about its
customers. Customers are offered product discounts, coupons, mileage points, or some
other reward in exchange for their voluntary participation in the program. Loyalty card
programs also help build repeat business by offering the participating customers something
that is not available to the non-participating customers.

Merchandising: A retail function that involves selecting, pricing, displaying, and advertising
items for sale in a retail store.

Merchandise mix: The breadth and depth of products in a retail store. Also known as
product assortment. For example, in a menswear section, the merchandise line would
comprise of formal wear, casual wear, accessories, etc. The breadth of the formal wear
shirts would be multi-brand shirts available in different sizes, colors, styles, and price points.

Mobile POS (mPOS): The use of smartphones or tablets instead of traditional checkout
register or other point-of-sale terminals to facilitate payment for products.

Multichannel retailing: A marketing strategy that offers customers a choice of ways to buy
products—store, website, telephone ordering, mail orders, and catalog.

Necker: A coupon placed on the 'neck' of a bottle.

Omni-channel retailing: A marketing strategy that offers customers a seamless shopping
experience across touchpoints—store, website, telephone ordering, mail orders, catalog—
offering the same brand value.

Point-of-service (POS): A counter or area where goods are checked out. It is the point at
which customers make payments and transactions are authorized. Also called point-of-sale.

Psychographic data: Psychographic data expands upon demographic data by providing

information about consumer lifestyles. Information about consumer attitudes, interests, and
opinion provide an opportunity to develop a complete consumer profile.

Pallet: A horizontal platform device used as a base for assembling, storing, handling, and
transporting materials and products as a unit load. A pallet provides protection to the product
on it. A pallet affixed with RFID or GPS technology can also offer benefits of information and
or location tracking both for the pallet itself, as well as for the merchandise it is carrying.

Reconciliation: The process of verifying the amount of cash in a cash register at the close
of business (COB). The verification can also take place whenever a different cashier takes
over a cash register.

RFM Value: A marketing analysis tool used to identify a retailer’s best customers by
measuring certain factors. The RFM model is based on three quantitative factors:

 Recency - How recently a customer has made a purchase

 Frequency - How often a customer makes a purchase
 Monetary - How much money a customer spends on purchases

RFM analysis often supports the marketing adage that "80% of business comes from 20% of
the customers."

Scan and Go: A program offered by retailers that allows customers to scan goods with their
smartphones, pass through self-checkout, and exit the store.

Self checkout: A customer operated point of sale where customers scan, pay for, and bag
their own merchandise without interacting with a cashier.

Self-serve: A retail strategy that allows customers to select and pay for goods themselves,
without requiring the assistance of a staff member. Vending machines, kiosks, and self-serve
checkout lanes in grocery stores are examples of self-serve.

Shelf label: A label used by retailers for displaying product information on shelves. For
example, price, weight, size, manufacturer, etc.

Shrinkage: The loss of merchandise at a retail outlet due to shoplifting, internal theft, or
bookkeeping errors.

Showrooming: The act of examining merchandise in a physical store and then buying it
online at a lower price.

Signage: A visual representation that gives information to the customers about a store.
Signages are usually used to attract customers into the store and help customers to locate
products. Also called sign board.
Social commerce: A retail model that incorporates social media or social interaction to
assist online buying and selling of products and services.

Stock keeping unit (SKU): An individual item of merchandise assigned a unique identifier
for easy tracking of inventory. The unique identifier is based on attributes such as
manufacturer, style, number, size, color, and unit price.

Touchpoints: The channels or outlets through which customers connect with a retailer.
Traditional retail touchpoints include physical stores, call centers, and e-commerce websites.
Modern touchpoints include social networking sites, online communities, blogs, and mobile
applications.
Visual merchandising: The use of attractive sales displays and retail floor plans to engage
customers and boost sales activity.

Webrooming: The practice of looking at products online before buying them in stores. It is
the opposite of showrooming, where customers look up products in physical stores only to
buy them online.

Wobbler: A sign that jiggles from a shelf.

Today, in most stores, the POS systems are integrated with the store inventory management
(SIM) systems. When a transaction is made at the POS, the inventory level in the SIM is
automatically updated to reflect the sale. When the merchandise reaches the minimum stock
level defined by the retailers, the ordering process is initiated.

Ordering merchandise involves the following activities:

1. Monitoring the current stock levels

2. Filling up the order form or purchase order (PO)
3. Getting the order approved by the head office, if required
4. Placing orders with the vendors

There are two ways of storing merchandise: forward stock and reserve stock.

 Forward stock: Merchandise that is stored on the sales floor near the selling
department. For example, in the drawers or cupboards below the shelves and
cabinets above the racks.
 Reserve stock: Merchandise that is stored off the sales floor, either in the stock
room or at the central warehouse.
Overview of Store Management Systems

Retailers deploy store management systems to automate and simplify many store activities.
Store management systems are categorized into the following:

 POS systems: A POS system includes all the software and hardware required to
perform customer facing activities such as recording sale transactions, returns, and
exchanges, and management of loyalty programs, promotions, and payments. The
POS sales-channel systems include POS Registers, kiosks, mobile POS (mPOS),
and self-checkouts for processing store-level transactions.
 Back Office applications (applications to manage store operations): These
applications include the Back Office client (integrated with the Cash Office client),
Store Inventory Management (SIM) client, and Workforce Management (WFM) client.
Typically, these applications are web-based and are deployed on store servers. Store
managers and associates can launch these applications through URLs from a
desktop.
 Store servers: The client applications such as the Back Office client, SIM client, and
WFM client are installed on servers deployed at the store level. In the case of small
retailers, all the client applications may be deployed on a single server, whereas
large retailers may deploy them on separate servers. In most cases, the Back Office
and POS servers are installed on the same application server (referred to as the
Store server), while the WFM client is installed on a separate server.

Note: The above deployment varies based on the specific product implementation.

The deployment strategy can vary across vendors. Some vendors may implement
POS without the store server, while others may set up a store server.

Some Basics on POS Systems

The main function of a POS system in a retail store is to process transactions and record
transaction data. A transaction can be a sale or a refund, generation or redemption of a
credit note or a gift voucher, processing of a layby, or simply recording a customer’s details
in the store’s database (DB).

POS systems not only ring transactions but also provide retailers with a chance to interact
with customers and enhance the shopping experience. By providing the right promotional
information, inventory lookup capability, recommendations on cross-selling opportunities,
and making product recommendations based on the shopping patterns of customers, new
generation POS systems help improve sales.

In a retail store, the POS system might be situated on a checkout counter, may be a mobile
version that store associates carry with them, or may be deployed as a kiosk. There might
be just one POS in a store, or several, as in a department store. Although all POS systems
have the same basic composition, they vary from a very basic cash register-looking type to
high-end systems with touch screen facilities based on the following factors:

 Environment in which they are used, such as clothing boutiques, book stores, and
supermarkets.
 Type of information to be gathered or recorded, such as information on repeat
customers and method of payment.
  Store type, such as apparel, grocery, quick service restaurants (QSR), and
electronics.
 Amount of money the retailer is willing to spend.

Components of a POS System

A POS system consists of:

 Hardware peripherals. Hardware peripherals such as the cash drawer, scanner,

magnetic stripe reader (MSR), pole display, signature capture device, PIN pad, and
printer are connected to a POS Register. These peripherals are used to perform
activities such as scanning and weighing items, displaying item details, storing and
managing cash, printing receipts, and processing credit card and other payment
types in the POS Register. The Application Programming Interface (API) required to
integrate these devices with the POS application are provided by the respective
device vendors. To support payments, the POS application should be integrated with
the Electronic Fund Transfer (EFT) client applications provided by third parties.
 POS software. POS software is an application which has the capability to record
customer transactions such as sales and refund, reconcile financial transactions
during the day, update inventory status based on sales, and provide customer with
details of products, price, and promotions. Most POS software has the client and
server components. Client POS software may have multiple variations based on the
type of client such as mPOS, self-checkouts, and kiosks.
 Peripheral integration layers. POS software connects to the peripherals (such as
MSRs, PIN pads, printers, and coin dispensers) via standardized interfaces such as
OPOS, JavaPOS, or UnifiedPOS. These standards have helped make peripheral
integration platform independent.
EAN is a linear, all-numeric product code for European countries. It has two basic formats,
EAN-13 and EAN-8. EAN-13 (comprising 13 characters) is the international barcode for
marking products often sold at retail point of sale. The first two characters are the flag
characters that identify the country of origin, the next ten characters are the data characters,
and the last character is the check character. EAN-8 (comprising 8 digits) barcodes are used
on products where only limited space is available.

UPC is a linear, all-numeric product barcode, uniquely assigned to each product. Its most
common form, the UPC-A, consists of 12 numerical digits, with ten digits at the bottom of the
code and one small number to each side. Each UPC barcode begins and ends with 101, and
has 01010 in the middle.

A QR code is a 2D matrix barcode that can be read by an imaging device, such as camera
and smartphone. It has fast readability and greater storage capacity compared to standard
UPC barcodes.

Cash Float: The amount of change in the cash drawer at the commencement of trade. The
cash is broken down into a range of denominations, enabling the cashier to give change to
customers from the commencement of trade. There is no set amount for the cash float that
suits all retailers, nor is there a magic breakdown of denominations. The size and breakdown
of the float is largely determined by factors such as the:

 Store policy and procedures

 Size of the store
 Time of day

Cash Pickup: The transfer of cash from the Till to the Safe at periodic intervals to avoid theft
and robbery, and manage store finances better. Cash pickup is done by the manager. The
cash is matched with the revenue report of the Till.

End of Day: The closing procedures of a store including the reconciliation of the Till amount,
validation of the cash received from sales transactions, reconciliation of the electronic sale,
changing the trading date to the next date, closing the store, etc.
Final Sign-Off: An action to mark the end of day on Tills. The closing process in a store
includes the final sign-off (cashiers logoff from all POS terminals) of all the Tills before the
day is marked as CLOSED on the store server. This process also triggers the reconciliation
of sales.

Safe: The chest which holds the money at a store in the back office. This would include the
balance left after the previous day’s bank remittance.

Start of Day: The opening procedures of a store including the validation of the trading date,
validation of the safe count, disbursement of float to Tills, etc.

Till Over/Short: During the reconciliation for any Till, if the cash present is more than the
amount reported by the system, it is called ‘over’. If the amount is short, it is called ‘short’.
Both scenarios are to be resolved during the end of day process.

Trading Date: The date used for all financial transactions. It may differ from the current date
in few scenarios. For example, in 24/7 stores, where the end of day is run after 00:01 hours,
the trading date may be the previous day date.