Navigating the retail landscape can be a daunting task, especially for new brands aiming to carve out their niche. Understanding the language of retail is not just beneficial—it’s essential for effective communication and successful negotiations. When interacting with buyers, clarity in terminology ensures that both parties are aligned, which can significantly influence the decision-making process.
Our comprehensive guide to the top 43 retail terms is designed to arm you with the knowledge needed to converse confidently and close deals more effectively.
Retail Pricing Strategies
Understanding and implementing effective pricing strategies is crucial for any brand entering the retail market. By mastering these terms, brands can set competitive and profitable price points that attract both retailers and consumers, ensuring a healthy margin and market acceptance.
- Keystone Pricing:
A straightforward pricing strategy where the retail price is set at double the wholesale cost, ensuring a 50% profit margin. - MAP / Minimum Advertised Price:
A policy enforced by manufacturers to maintain a product’s price integrity by setting the lowest price at which it can be advertised. - MSRP / Manufacturer’s Suggested Retail Price:
The recommended retail price for a product, set by the manufacturer, though the actual sale price can vary. - Volume Discount:
A discount strategy that offers lower prices per unit when larger quantities are purchased, encouraging bulk buying. - Loss Leader:
A product priced below cost to attract customers, with the strategy to drive additional sales of more profitable items.
Retail Marketing and Promotions:
Effective marketing and promotional strategies are key to increasing product visibility and consumer engagement. Familiarity with these terms helps brands create compelling marketing campaigns and promotional offers that drive sales and enhance retail partnerships.
6. Cross Merchandising:
Displaying products in multiple sections of a store to increase visibility and boost sales, such as selling chapstick in both the cosmetics and checkout areas.
7. Add to Market Basket Strategy:
Encouraging the purchase of additional, complementary items at the point of sale to increase the average transaction value.
8. Co-Op Marketing:
A collaborative advertising effort where a brand supports a retailer's marketing expenses in exchange for product promotion.
9. Promotional Allowance:
Funds provided by a vendor to a retailer to support the marketing and promotion of specific products.
10. Cross-Promotions:
Marketing efforts that promote complementary products from different brands or categories together to boost sales for both.
Retail Sales Enhancements:
Boosting sales is about more than just having a great product; it’s about how you present and promote it. These terms cover strategies to enhance customer interactions and increase sales volumes through engaging demonstrations and attractive bundling offers.
11. Impulse Buy:
A purchase made spontaneously, without prior planning, often triggered by strategic product placement.
12. Product Demonstrations:
Live presentations or trials of a product within a store to engage customers and encourage purchases by highlighting features and benefits.
13. Product Bundling:
Offering several products together at a reduced price compared to buying them separately to increase perceived value.
Retail Navigator: Ultimate Guide for Brands on the Rise
Order and Inventory Management:
Efficient order and inventory management are foundational to a successful retail operation. By understanding these terms, brands can optimize their inventory levels, reduce overhead costs, and meet retailer demands effectively, making their products more appealing for retail stocking.
14. Vendor Minimums / MOQ by STYLE:The smallest quantity of a particular item that must be ordered from a vendor, ensuring economic viability.
15. Sell-Through:
The percentage of inventory sold over a certain period, a key indicator of product demand and inventory effectiveness.
16. Dead Stock/Dead Inventory:
Items that have not been sold and are not expected to be sold in the future, often leading to write-offs.
17. Drop Shipping:
A fulfillment method where a store sells products that are shipped directly from the supplier to the customer, bypassing traditional stocking methods.
18. MOQ Reduction:
Lowering the minimum order quantity temporarily to encourage retailers to try new products with less risk.
19. Consignment:
An arrangement where goods are placed in the hands of another party to sell, but the original owner retains ownership until the items are sold.
20. Seasonal Buybacks:
An agreement where a vendor agrees to repurchase unsold seasonal goods, reducing the retailer’s risk of unsold inventory.
Financial Terms in Retail:
Cash flow management is critical in retail. These financial terms provide insight into various payment structures and financial arrangements that can help brands manage their finances more effectively, ensuring smoother transactions and more favorable terms with retailers.
21: Net Payment Terms:
The conditions under which a payment is due for goods received, such as "Net 30," which requires payment within 30 days.
22. Payment Terms Extension:
Offering longer periods for retailers to make payments, which can improve their cash flow flexibility.
23. Buyback Guarantee:
A vendor’s promise to repurchase unsold inventory, providing a safety net for retailers against overstocking.
Product Placement and Display:
The placement and presentation of products within a retail space can significantly impact sales. These terms help brands understand how best to display their products to attract customer attention and maximize sales potential through strategic positioning and display techniques.
24. Floor Shipper:
A freestanding display placed on the retail floor to increase product visibility and attract customer attention.
25. Counter Display:
Small display units positioned at the checkout area to catch the eye of customers and encourage impulse purchases.
26. Power Wing:
A display attached to store shelving that extends outward, enhancing product visibility and promotional space.
27. Clip Strip:
A vertical strip that holds multiple units of a product, often hung from shelves to maximize space and attract buyers.
28. Shelf Placement Fee:
Fees paid by manufacturers to retailers to secure prime shelf space for their products, also known as slotting fees.
29. Planogram (POG):
A visual diagram that details where and how products should be displayed on retail shelves to maximize sales.
Retail Distribution and Logistics:
A well-managed supply chain is essential for meeting retailer and consumer demands. These terms will guide brands in optimizing their distribution and logistics to ensure timely deliveries and efficient stock management, which are critical for maintaining strong retail relationships.
30. Distribution Center:
A facility that manages product storage and distribution for a retailer or manufacturer, serving as a hub for goods moving to various destinations.
31. Case Packs:
The smallest unit of a product that can be ordered from a supplier, designed to simplify handling and inventory management.
32. Master Packs:
Larger boxes that contain several case packs, used for shipping and handling efficiency.
33. Inner Packs:
Smaller, consumer-sized packages that are part of a larger case pack, making it easier to manage inventory at the retail level.
34. Lead Time:
The time it takes from placing an order to receiving it, critical for inventory planning and management.
Retail Strategies:
Adopting a holistic approach to retail is vital for success in today’s competitive market. These terms encompass strategies that integrate various aspects of retail, from omnichannel selling to sustainability, helping brands align with current retail trends and consumer expectations.
35. Omnichannel Retailing:
A seamless approach to sales that integrates the customer experience across all channels, including online and brick-and-mortar.
36. Green Retailing:
Selling practices that minimize environmental impact, such as offering
sustainable products or using eco-friendly packaging.
37.Exclusivity:
An agreement granting a retailer sole rights to sell a product in a specific area, enhancing the product’s appeal due to its limited availability.
38. Private Label / Private Brand / White Label:
Products branded by retailers and sold exclusively in their stores, typically manufactured by third parties.
39. Retailer-Specific Customization:
Tailoring products or packaging to meet the needs or branding of a particular retailer, enhancing their market appeal.
Retail Review and Feedback:
Continuous improvement based on feedback and performance reviews is vital for maintaining retail presence and growth. Understanding these terms allows brands to assess their product performance effectively, adapt their strategies, and enhance their offerings to meet evolving market needs.
40. Product Line / Line Sheet:
Detailed listings of products available for order by retail buyers, including descriptions, prices, and ordering details.
41. Review:
Periodic evaluation of product performance by retail buyers to decide on continuing, adjusting, or discontinuing stock.
42. Incremental / Residual Sale:
Additional revenue generated from ongoing sales or subsequent purchases linked to an initial sale.
43. Performance Rebates:
Discounts or refunds offered based on the sales volume achieved, used as an incentive for retailers to promote products.
Explore how Volcanic Retail can enhance your B2B retail strategy and drive your business towards sustainable growth. Connect with us to discover more about our innovative solutions tailored for B2B success.
Whether you’re a budding entrepreneur or a seasoned business venturing into retail, mastering these terms will equip you with the tools needed for effective discussions with buyers.
At Volcanic Retail, we are invested in your brand's success. We hope this list was beneficial to you and invite you to download our terminology guide.
The Ultimate Guide for Brands
Dive into our new guide, Retail Navigator: The Ultimate Guide for Brand on the Rise—with concise, impactful, must-know strategies, including:
- Competitive Pricing: Learn how to set prices that attract retailers while keeping your profits healthy.
- Winning Line Sheets: Create captivating line sheets that make retailers take notice.
- Savvy Negotiations: Master the art of negotiating deals that benefit both you and the retailer.
- Effective Communication: Develop communication strategies that resonate with retail buyers.
- Retailer Relationship Insights: Gain insights into building lasting relationships with retail partners.
Transform your approach with our new ebook and watch your brand soar in new markets. It's not just a guide; it's your ticket to success!
