Other Retailing Industry Terminology

A/B Testing

A controlled experiment that compares two versions of a page, offer, layout, or flow (A vs. B) to determine which performs better on a target metric (e.g., conversion rate, AOV).

We’re A/B testing the free-shipping banner on the PDP.; Variant B of the checkout cut drop-off by 8%.; Let’s A/B test price badges before rolling them chainwide.

ADA Compliance

Adhering to accessibility requirements (and commonly WCAG guidelines) so digital and physical retail experiences are usable by people with disabilities, reducing legal risk and improving inclusivity.

Run an ADA compliance audit on our mobile site.; We added alt text and keyboard navigation to meet ADA/WCAG standards.; Redesign the fitting rooms for ADA accessibility.

Affiliate Marketing

A performance-based channel where external partners (publishers, creators) promote a retailer’s products and earn commissions for tracked sales or leads.

Our affiliate channel drove 12% of Q4 revenue at a 10% CPA.; Recruit niche publishers for the new category launch.; Validate affiliate attribution with last-click vs. multi-touch models.

Attribution Modeling

Methods to assign credit for conversions across marketing touchpoints (e.g., first click, last click, multi-touch, data-driven) to guide budget allocation.

Switch from last-click to data-driven attribution to value upper-funnel touchpoints.; Attribution suggests paid social assisted 35% of conversions.; Test MMM to validate our attribution model.

Average Order Value (AOV)

The average revenue per order, calculated as total revenue divided by number of orders; a key lever for profitability.

AOV rose from $72 to $81 after bundling.; Add cross-sells in cart to lift AOV.; Free shipping threshold is set just above current AOV.

Basket Analysis

A data-mining technique that identifies items commonly purchased together to inform merchandising, promotions, and store layout.

Basket analysis shows socks frequently co-purchased with running shoes.; Use association rules to build bundles.; Planograms should co-locate high-affinity SKUs.

BORIS (Buy Online, Return In Store)

An omnichannel returns option allowing customers to return online purchases at physical stores, improving convenience and lowering reverse-logistics costs.

Enable BORIS to reduce return shipping costs.; BORIS drives store traffic and add-on sales.; Train associates on BORIS workflows in POS.

BOPIS (Buy Online, Pick Up In Store)

An omnichannel fulfillment method where customers order online and collect items at a store, speeding delivery and saving shipping costs.

BOPIS penetration reached 28% of eCom orders this quarter.; Tighten BOPIS SLA to 2 hours.; Expand BOPIS to 150 additional locations.

Brand Equity

The intangible value a brand adds (awareness, trust, loyalty), enabling price premiums, higher conversion, and lower acquisition costs.

Premium pricing is supported by strong brand equity.; Measure brand equity via NPS and awareness lifts.; Protect brand equity by enforcing MAP.

Buy Box

On marketplaces, the default add-to-cart position for a product; winning it drives the majority of sales and depends on price, fulfillment, and seller performance.

We lost the Buy Box on our top ASIN due to price parity.; Improve seller rating to win the Marketplace Buy Box.; Automate repricing to defend the Buy Box.

CAC (Customer Acquisition Cost)

The average cost to acquire a new customer, typically total acquisition spend divided by new customers; used to assess payback and unit economics.

Our blended CAC is $41, down 9% QoQ.; Cap CAC at 30% of first-order margin.; Optimize creative to reduce CAC in paid social.

Card-Not-Present (CNP)

Payment transactions where the cardholder isn’t physically present (e.g., online, in-app), carrying higher fraud and interchange risk than card-present.

CNP fraud rose after we launched in two new markets.; Apply 3-D Secure to high-risk CNP transactions.; Tune fraud thresholds for CNP authorizations.

Chargeback

A forced payment reversal initiated by the cardholder’s bank due to fraud, disputes, or processing errors; excessive rates trigger fines and higher fees.

Chargeback rate exceeded the card network threshold.; Submit compelling evidence to dispute friendly fraud.; Reduce chargebacks by clarifying billing descriptors.

CLV (Customer Lifetime Value)

The net profit expected from a customer over their relationship with the retailer; guides acquisition spend and loyalty investments.

Segment by predicted CLV to prioritize retention offers.; Ensure CAC/CLV ratio stays under 1:3 for growth.; Subscription customers show 2.4x CLV.

CRO (Conversion Rate Optimization)

A process of improving a site or app to increase the percentage of visitors who complete desired actions (purchase, signup), using data, testing, and UX best practices.

CRO increased conversion by streamlining checkout fields.; Test urgency badges on PDPs.; Use heatmaps to guide CRO hypotheses.

CRM (Customer Relationship Management)

Systems and strategies to manage customer data, interactions, and campaigns across channels to drive retention and personalization.

Integrate POS data into the CRM for a 360° profile.; Automate lapsed-customer journeys in CRM.; Use CRM segments for targeted SMS campaigns.

Dark Store

A non-customer-facing facility optimized for rapid picking and local fulfillment (e.g., click-and-collect, quick commerce).

Convert the underperforming location into a dark store for faster delivery.; Dark stores improved picker efficiency by 30%.; Use dark stores to expand 30-minute delivery zones.

Demand Forecasting

Estimating future demand by SKU/channel/location using historical data and external signals to guide inventory, staffing, and replenishment.

Move to probabilistic demand forecasting at the SKU/store level.; Forecast error drove OOS in seasonal items.; Incorporate weather into demand models.

Direct-to-Consumer (DTC)

Selling directly to end customers without intermediaries, typically via owned e-commerce and stores, enabling control over brand, pricing, and data.

Launch a DTC site to capture first-party data.; DTC margins offset wholesale declines.; Balance DTC growth with channel conflict.

Drop Shipping

A fulfillment model where a supplier ships orders directly to the customer on the retailer’s behalf, reducing inventory holdings but adding coordination risk.

Expand assortment via vendor drop ship.; Monitor drop-ship SLAs for on-time delivery.; Drop shipping reduced inventory carrying costs.

Dynamic Pricing

Real-time or rules-based price adjustments using demand, inventory, and competitor signals to optimize revenue and margin.

Deploy dynamic pricing on long-tail SKUs.; Match competitor prices hourly within guardrails.; Dynamic markdowns cleared end-of-season inventory.

EDI (Electronic Data Interchange)

Standards for computer-to-computer exchange of business documents (e.g., POs, invoices, ASNs) between retailers and suppliers.

Onboard vendors to EDI 850/856/810.; EDI reduced invoice mismatches by 70%.; Require ASNs via EDI for dock scheduling.

Endless Aisle

Extending in-store assortment by enabling customers to order non-stocked items for delivery, often via kiosks or associate devices.

Offer endless aisle via kiosks for out-of-stock sizes.; Ship-to-home from DC to complete the endless-aisle promise.; Endless aisle lifted attachment rate in small stores.

ERP (Enterprise Resource Planning)

Core back-office system that manages finance, procurement, and sometimes inventory and order data; acts as the system of record for many retail processes.

Integrate OMS with ERP for real-time inventory.; ERP upgrade will standardize item masters.; Sync GL accounts to the ERP nightly.

First-Party Data

Customer data collected directly by the retailer (e.g., purchases, site behavior, preferences), critical for personalization and measurement.

Grow first-party data through loyalty enrollment.; Shift to 1P data as third-party cookies deprecate.; Use 1P purchase data for lookalike audiences.

Footfall

The count of people entering a store or area; a key physical retail traffic metric used for staffing and sales forecasting.

Footfall rose 12% after the store refresh.; Use Wi‑Fi tracking for accurate footfall counts.; Correlate footfall with BOPIS adoption.

Fulfillment Center

A facility designed to pick, pack, and ship orders efficiently for e-commerce, wholesale, or store replenishment.

Open a new FC to serve the Southeast.; Zone picking boosted FC throughput.; Divert returns to the regional FC for processing.

GMROI (Gross Margin Return on Investment)

A profitability metric: gross margin dollars earned for every dollar invested in inventory; balances sales, margin, and inventory productivity.

Focus open-to-buy on categories with higher GMROI.; Improve GMROI via tighter markdown cadence.; Vendor terms boosted GMROI by 80 bps.

GTIN (Global Trade Item Number)

A standardized product identifier (e.g., UPC, EAN) used in barcodes and listings to uniquely identify trade items across systems.

Submit GTINs to improve marketplace discoverability.; Mismatch between GTIN and UPC caused listing errors.; Standardize GTINs in the item master.

Headless Commerce

An architecture that separates the front-end experience from back-end commerce services via APIs, enabling faster iteration and multi-channel delivery.

Go headless to decouple the storefront from the commerce engine.; Use a CMS and APIs to power omnichannel experiences.; Headless reduced page load by 30%.

Heatmap

A visual analysis of where users click, scroll, or dwell (digital) or how shoppers move and cluster (in-store), used to optimize layouts and interfaces.

Scroll heatmaps show low engagement below the fold.; Use in-store heatmaps to optimize endcaps.; Heatmaps informed our CRO roadmap.

IMU (Initial Markup)

The difference between cost and the original selling price, expressed as a percentage of the selling price; a merchandising profitability lever.

Target 58% IMU for private label basics.; Raise IMU to offset freight increases.; IMU erosion led to margin shortfalls.

Inventory Turnover

How many times inventory is sold and replaced over a period; higher turns indicate efficient inventory utilization.

Turn improved from 3.2x to 3.8x YoY.; Slow turns indicate over-assortment.; Increase turns by tightening replenishment.

JIT (Just-in-Time) Inventory

An inventory strategy that minimizes on-hand stock by syncing replenishment closely with demand, reducing holding costs but increasing supply risk.

Shift seasonal basics to JIT to reduce carrying costs.; Supplier reliability is critical for JIT.; JIT failed under port congestion risks.

Kitting

Assembling individual items into a ready-to-ship bundle or set, often to simplify fulfillment or create value-added offerings.

Create gift sets by kitting complement SKUs.; Kitting upstream reduces pick times in the FC.; Track kitted bundles for inventory accuracy.

Last-Mile Delivery

The final leg of delivery from a local node to the customer; often the costliest and most complex part of fulfillment.

Partner with couriers to improve last-mile reliability.; Optimize route density for last-mile economics.; Use lockers to streamline last-mile pickups.

Loss Prevention (Shrink)

Efforts to minimize losses from theft, fraud, damage, and errors; shrink is the gap between recorded and actual inventory.

Implement RFID to reduce shrink.; ORC trends are driving higher shrink this year.; Improve LP training at high-risk stores.

MAP (Minimum Advertised Price)

A policy set by brands specifying the lowest price resellers can advertise, used to protect brand positioning and margins.

Enforce MAP to prevent channel price wars.; Violation of MAP triggers reseller penalties.; Automate MAP monitoring across marketplaces.

Marketplace

A platform where multiple sellers offer goods to consumers (e.g., Amazon, Walmart), with platform-controlled discovery, fees, and service levels.

List on marketplaces to extend assortment.; Balance marketplace fees against incremental reach.; Analyze Buy Box win rate by SKU.

Markdown Optimization

Data-driven pricing of discounts over time to accelerate sell-through while maximizing gross margin dollars.

Use demand signals to time markdowns and protect margin.; Dynamic markdowns cleared 85% of aged inventory.; Set markdown ladders by subclass.

MOQ (Minimum Order Quantity)

The smallest quantity a supplier will produce or sell in a single order; affects cash, storage, and assortment flexibility.

MOQ of 500 units strains cash flow.; Negotiate lower MOQs for test buys.; Align MOQ with forecasted sell-through.

Net Promoter Score (NPS)

A loyalty metric based on likelihood to recommend; calculated from customer survey responses and used as a proxy for satisfaction and growth potential.

NPS dropped post-returns policy change.; Tie associate bonuses to NPS improvements.; Segment detractor feedback by channel.

Omnichannel

An integrated retail approach that provides consistent experiences, pricing, and inventory visibility across online and offline channels.

Unify inventory for true omnichannel fulfillment.; Design omnichannel promotions that work online and in-store.; Omnichannel customers have 2x CLV.

Order Management System (OMS)

Software that centralizes order capture, inventory visibility, routing, and status across channels and nodes.

OMS orchestrates BOPIS and SFS routing.; Expose OMS inventory to the storefront in real time.; Upgrade OMS to support split shipments.

PCI DSS (Payment Card Industry Data Security Standard)

Security standards for handling cardholder data; required for merchants to reduce breach risk and maintain payment acceptance.

Annual PCI DSS compliance audit is due.; Tokenization helps reduce PCI scope.; Ensure POS and eCom environments meet PCI controls.

Planogram

A diagram that specifies product placement on shelves to optimize visibility, sales, and compliance across stores.

Reset the planogram to feature new arrivals on the endcap.; Planogram compliance improved with computer vision.; Use basket analysis to inform planogram adjacencies.

Point of Sale (POS)

The hardware and software used to process in-store transactions and manage sales, returns, and promotions.

Deploy mobile POS for line busting.; Integrate POS with CRM for unified profiles.; POS outage procedures need updating.

Private Label

Products owned by the retailer’s brand, often offering higher margins and exclusivity versus national brands.

Expand private label to improve margins.; Private label share reached 32% in pantry.; Differentiate via exclusive private label designs.

QR Code Commerce

Using scannable codes to link physical touchpoints to digital product pages, payments, or promotions for seamless shopping.

Add QR codes to windows for after-hours shopping.; Shoppers scan QR for aisle-level content.; Use QR to launch app-exclusive offers in-store.

RFID (Radio-Frequency Identification)

Wireless tags and readers that identify items uniquely and rapidly, enabling inventory accuracy, loss prevention, and faster workflows.

Cycle counts with RFID improved on-shelf accuracy to 98%.; Leverage RFID for BOPIS item locating.; RFID gates help reduce shrink.