In the past, the retail environment has been more forgiving. Single stores, Mom & Pops if you like, have had the luxury to organically build their business through relationships, trial and error and good old fashioned luck. Today, it’s increasingly difficult to build a successful retail business without knowing the nuts and bolts of retailing. Challenge awaits at every turn, but understanding today's retail trends and terminology will help you ask the right questions, whether you're hiring a store manager, buying for next season or deciding on the right POS system software for your store. So, whether you're starting, managing or expanding your retail business, here’s a quick primer on key retail business terms you should know.
Glossary for the Modern Retailer
Brick and Click
Fairly obvious, this refers to retailers who combine their 'offline' brick and mortar presence with their 'online' ecommerce store. Globally, this is becoming imperative for sucessful single store and multi-channel stores alike. Customers are expecting a seamless brick + click shopping experience. Here's a good article on this growing trend.
In retail, beacons operate via Bluetooth and sending out signals to other bluetooth enabled devices. Used to tailor marketing notifications or for in-store analytics such as traffic counting, this technology is increasingly being piloted by large and mid-size retailers. Learn how beacons will drive U.S. retail in the coming years.
Pop into your local grocery. Front and center you might see a display that combines canned chili, cornbread mix and maybe even bottled beer. That's cross merchandising at work. Bringing disparate product categories together to engage the customer and sell more!
Technically, according to Wikipedia clienteling, "is a technique used by retail sales associates to establish long-term relationships with key customers based on data about their preferences, behaviors and purchases." How do you do that? With CRM (Customer Relationship Management) software which is often built into today's retail POS systems. Collecting, analyzing and acting upon customer data is essential to keeping customers engaged and loyal. See how retailers both big and small are using clienteling in 2017.
Powered by NFC (Near Field Communication), this type of payment option allows customers to pay without even touching a terminal. Just place your smart phone or card near an enabled device and voila, you're done!
No retailer wants dead stock – unsold merchandise that hangs around way too long. Increasingly, using retail management software, retailers are far more tactical about analyzing data to help ensure that they are making the right purchasing decisions and avoiding the pitfall of dead stock.
Stands for Europay, Mastercard and Visa and is a global standard for cards equipped with chip + pin. This new breed of technology is far more effective in combating fraud. In the period of April 2015 to April 2016, Mastercard reported a 54% reduction in counterfeit fraud with chip enabled merchants. 8 FAQ's can be found here.
Using a kiosk, ipad or similar customer facing device (often touch screen), retailers create an endless aisle experience by allowing customers in-store digital access to their entire product offering. This allows retailers to streamline their in-store SKU's and dial-in their inventory planning.
Enterprise Resource Planning
ERP is the integrated management of core business processes, often in real-time, facilitated by software. These business activities can include; purchasing, inventory management, marketing, customer service, shipping, payment, finance etc... This software is essential to large, enterprise-sized retailers but increasingly small multi-channel retailers are using their POS system software to drive many ERP functions.
Internet of Things
Otherwise know as IoT, this terminology refers to smart objects (your watch for instance) that connects to the web sending data back and forth. Because of IoT the shopping experience will become increasingly personalized and targeted. Here's a cool article on where this IoT trend is headed and you can be sure it will revolutionize retail in the near future!
Simply, a pricing method of marking merchandise for resale to an amount that is double the wholesale price.
This retail marketing strategy involves pricing certain products at a loss with the goal of attracting buyers in store. Ultimately, the goal is for customers to buy the loss leader along with additional merchandise at full price for a net gain. This type of strategy must be closely managed with a smart point of sale and retail management system.
This generally refers to payment services operated under financial regulation and performed from or via a mobile device. Apple Pay and Google Wallet are good examples and increasingly customers are demanding this type of payment option.
This is a cross-channel business model that involves a retailer entering multiple channels - brick and mortar, mobile, social media ecommerce - in order to provide a seamless, cohesive and singular shopping experience for the customer.
Point of Sale
Literally, it's the time and place where a retail transaction is completed. However, POS systems are increasing more than just the point at which a product is sold. They are becoming the hub of the retail enterprise including; purchasing, receiving, inventory management, customer relationship management, marketing, loyalty, reporting and more.
Radio-frequency identification uses electromagnetic fields to automatically identify and track tags attached to objects. The tags contain electronically stored information that doesn't require line-of-sight like the traditional bar code does. In retail it is currently used to optimize inventory.
This is the difference between product on hand and product recorded on paper or in your POS system. Theft, error and fraud are the usual culprits and need to be combated with tight adherence to inventory management best practices such as regular partial and full cycle counts.
Yup. No service required. You select and pay for goods all on your own through a kiosk, vending machine or self-check out. Even smaller retailers are testing the waters with technology like QueueHop.
Or stock keeping unit, is an identification code for a product, often a machine-readable bar code that helps track the item particulars - style, brand, size, color etc... for inventory and POS purposes.
Shopping in-store but buying online for a lower price.
Shopping online (social media sites like Pinterest or Instagram are great examples) but heading in-store to buy.
Retail is changing rapidly. Understanding this key retail terminology is the first step. Plan proactively with technology that supports your unique strategic vision and your retail business will be more productive, prosperous and prepared.
Interested in learning more about how Springboard Retail's POS and retail management platform can help you sell more and grow profitably? Click here to watch a demo!
Topics: Business of Retail