Toy Stores Industry Terminology

Allocation

The planned distribution of limited inventory across stores, regions, or channels based on demand forecasts, store capacity, and priorities.

-We allocated more holiday hot toys to high-velocity urban stores and e-commerce. -Allocation was throttled to preserve safety stock for late-season demand. -The rare chase figures were allocated one case per door to ensure fairness.

Assortment Planning

Deciding the optimal mix of products (brands, price points, age ranges, themes) for each store or channel to meet customer demand and financial goals.

-Our Q4 assortment plan increases collectibles and STEM kits by 20%. -Smaller-format stores carry a curated assortment focused on preschool and impulse toys. -We used analytics to adjust the action figure assortment by region.

Average Order Value (AOV)

The average dollar amount spent per transaction online or in-store. A key revenue and merchandising metric.

-Bundling plush with accessories raised AOV by $4.50. -Free shipping over $49 is designed to lift AOV. -AOV spiked during the BOGO promotion.

Average Unit Retail (AUR)

The average selling price per unit, net of discounts. Used to track pricing power and mix.

-AUR increased after we reduced low-price filler SKUs. -Licensing premiums lifted AUR in dolls by 8%. -AUR dipped during clearance markdowns.

Basket Size

Number of items per transaction. Often paired with AOV and UPT.

-Adding checkout impulse racks boosted basket size. -Demos increased basket size for building sets. -Basket size softens post-holiday as shoppers buy single replenishment items.

Blind Box/Blind Bag

Packaging that conceals which collectible variant is inside, encouraging repeat purchases.

-Blind bags drove traffic via unboxing videos on social. -We set a per-customer limit on blind boxes to deter resellers. -Planograms grouped blind bags near registers for impulse.

BOPIS (Buy Online, Pick Up In Store)

Omnichannel service where customers order online and collect in a store.

-BOPIS handled 35% of last-minute holiday orders. -We added a BOPIS-only endcap for fast pickup. -BOPIS reduces shipping costs and drives add-on purchases at pickup.

Category Management

Managing product categories as strategic business units using consumer insights, vendor collaboration, and financial targets.

-A line review reset the preschool category to emphasize learning toys. -Category management shifted space to trading cards after POS gains. -The action figure category plan targets +200 bps margin.

Chase Variant

A rarer, limited variant within a collectible series, driving scarcity and excitement.

-The 1-in-72 chase boosted sell-through of the entire wave. -We enforced street date to protect the chase variant launch. -Online preorder limits were set to curb flipping of chases.

Circana (formerly NPD) Toy POS Data

Industry sales and share data captured from retail POS panels, used for benchmarking and trend tracking.

-Circana shows our brand up 3 share points in vehicles. -We validated our holiday forecast against Circana’s weekly reads. -Vendors cited Circana rankings in line review.

COGS (Cost of Goods Sold)

Direct costs of merchandise sold (purchase cost, freight into DC, duties) used to compute margin.

-Rising freight lifted COGS, compressing margins. -We renegotiated COGS via a higher MOQ and longer terms. -Landed COGS varies by Incoterm and tariff code.

CPSIA (Consumer Product Safety Improvement Act)

U.S. law governing toy safety (lead, phthalates, small parts, labeling, CPCs). Noncompliance triggers recalls and penalties.

-The vendor provided CPCs to document CPSIA compliance. -We blocked receipt for items missing CPSIA tracking labels. -Our QA team spot-tests CPSIA requirements pre-PO.

Demand Forecasting

Estimating future demand by SKU/location to drive buys, allocations, and labor planning.

-The model over-forecasted the movie tie-in toys by 15%. -We blended preorders and social buzz into the forecast. -Weekly re-forecasting reduced OOS during peak.

EDI (Electronic Data Interchange)

Standardized electronic exchange of business documents (POs, ASNs, invoices) between retailers and vendors.

-The vendor onboarded EDI 850/856/810 to speed receiving. -EDI errors delayed the holiday shipment ASN. -We charge back for late EDI invoices.

Endcap

High-visibility display at the end of an aisle, often reserved for promotions or newness.

-The movie tie-in endcap doubled unit velocity. -Vendors fund co-op for Q4 endcaps. -We rotate endcaps weekly during November.

EN71 (European Toy Safety Standard)

EU standard for toy safety (mechanical, flammability, chemicals), prerequisite for CE marking.

-The plush line passed EN71-1, -2, and -3 testing. -We can list on EU marketplaces after EN71 certification. -Packaging was updated to reflect EN71 compliance.

FOB (Free On Board)

An Incoterm where the buyer assumes risk/cost once goods are on board at the port of shipment.

-FOB Shenzhen requires us to book ocean freight. -Switching from DDP to FOB cut unit cost but added complexity. -FOB terms shifted duty risk to the retailer.

GMROI (Gross Margin Return on Inventory Investment)

A productivity metric: gross margin dollars earned per dollar of average inventory.

-Clearance improved GMROI by freeing cash from slow movers. -High-velocity blind bags deliver top-tier GMROI. -We rebalanced space to categories with higher GMROI.

Gross Margin

Sales minus COGS, expressed in dollars or percent; core profitability measure.

-Licensed sets carry lower margin than private label. -Margin eroded after unplanned freight surcharges. -MAP holidays helped protect margin during promo.

Holiday Peak (Q4)

Seasonal period when toys see disproportionate sales; requires special buys, labor, and capacity.

-We pulled forward receipts to hit pre-Black Friday floors. -Extended hours and demos are scheduled for Q4 peak. -OTB was weighted 45% to Q4 categories.

Incoterms (DDP, CIF, FOB)

International trade terms defining risk, cost, and responsibility between buyer and seller.

-We prefer DDP for simplicity on smaller vendors. -CIF quotes look cheaper but exclude duties. -Incoterms drove differences in landed cost.

Inventory Turnover

How many times inventory is sold and replaced in a period; indicates efficiency and cash velocity.

-Collectibles turn 10x vs 4x for large ride-ons. -Turn improved after tightening safety stock. -Slow-turn aged inventory was marked down.

IP Licensing

Contractual rights to produce/sell products with an intellectual property (e.g., film, character), typically paying royalties and meeting approvals.

-The master toy licensee presented new waves for the franchise. -Royalty rates affect SRP and margin planning. -Style guide approvals delayed the spring reset.

KPI (Key Performance Indicator)

Quantifiable measures used to track performance, e.g., sales, margin, turn, OOS, UPT, conversion.

-Weekly KPI reviews flagged a spike in OOS. -UPT and AOV are our core checkout KPIs. -KPI dashboards roll up by category and region.

Landed Cost

Total cost to bring a product to the warehouse or store: COGS plus freight, duties, insurance, and handling.

-Tariff changes raised landed cost by $0.30 per unit. -We sourced closer to reduce landed cost volatility. -Pricing ladders were reset after landed cost updates.

Lead Time

Time from order placement to goods available for sale, including production and transit.

-Long lead times on electronics require earlier commits. -We shortened lead time via nearshoring plush. -Forecast error grows with longer lead times.

Loss Prevention (LP)

Strategies and practices to reduce shrink from theft, fraud, or process errors.

-LP added keepers to high-theft collectibles. -BORIS fraud controls reduced false returns. -Cycle counts and CCTV cut shrink by 40 bps.

MAP (Minimum Advertised Price)

Brand policy setting the lowest price retailers may advertise; helps protect margins and brand equity.

-We paused ads to avoid MAP violations. -MAP holidays coordinated with the movie release. -The vendor issued warnings to marketplace sellers.

MOQ (Minimum Order Quantity)

Smallest quantity a supplier will accept per order or per SKU, often tied to pricing.

-We negotiated a lower MOQ on long-tail SKUs. -High MOQs led to aged inventory risk. -MOQs vary by packaging (inner vs master).

Net Terms

Payment terms defining discounts and due dates (e.g., 2/10 net 30).

-We captured the 2% discount by paying within 10 days. -Extended net terms improved holiday cash flow. -Terms differ across domestic and import POs.

Omnichannel

Integrated retail strategy providing a seamless experience across store, web, app, marketplace, and social.

-Omnichannel inventory shows store stock online. -BOPIS and ship-from-store are key omnichannel services. -Omnichannel attribution informs ROAS decisions.

Open-to-Buy (OTB)

Merchandise budget available for purchasing within a period, balancing sales, receipts, and inventory targets.

-We reserved OTB for late-breaking plush trends. -OTB was reallocated from ride-ons to trading cards. -Missed receipts created extra OTB this month.

Out-of-Stock (OOS)

When a product is unavailable for sale despite demand, causing lost revenue and customer dissatisfaction.

-OOS spiked on the new construction set after viral TikToks. -We raised ROPs to reduce OOS during weekends. -OOS alerts trigger inter-store transfers.

Planogram (POG)

A schematic showing shelf layout, facings, adjacencies, and merchandising standards for each fixture.

-The May reset loaded the new POGs to store tablets. -POG compliance audits improved sales conversion. -We added hooks to the pegboard per the POG.

POS System

Point-of-sale hardware/software that processes transactions and feeds inventory, pricing, and CRM systems.

-POS updates enabled real-time inventory for BOPIS. -We integrated POS with loyalty and receipts by email. -POS outages during peak caused long queues.

Preorder

Accepting customer orders before a product’s release to forecast demand and secure sales.

-Preorders for the holiday console bundle sold out in hours. -We set preorder limits to curb scalping. -Preorder deposits helped plan initial allocations.

Product Safety Recall

Removal of a product from sale/use due to safety noncompliance or defect, coordinated with regulators.

-We issued a recall for small-parts choking risk. -Recall communications were posted across web and stores. -Vendors funded recall logistics and refunds.

Purchase Order (PO)

A formal document committing to buy specific SKUs, quantities, prices, and dates from a vendor.

-The PO includes our carton marking and EDI requirements. -We split the PO to ship part by air for the street date. -PO lead times were extended due to port congestion.

Reorder Point (ROP)

Inventory level at which replenishment is triggered, typically demand during lead time plus safety stock.

-We increased ROPs after forecast upgrades. -Low ROPs caused weekend stockouts in dolls. -ROPs vary by store velocity and lead time.

RFID

Radio Frequency Identification tags and readers used to improve inventory accuracy and reduce shrink.

-RFID cycle counts hit 98% accuracy pre-peak. -We tagged high-value RC vehicles with RFID. -RFID cut time to locate BOPIS orders in backrooms.

Safety Stock

Extra inventory held to buffer uncertainty in demand and lead time.

-We raised safety stock for hot holiday SKUs. -Safety stock was dialed back post-peak to free cash. -Regional safety stock levels reflect delivery reliability.

Sell-In vs Sell-Through

Sell-in is shipments to retailers; sell-through is sales to consumers. Toy retailers track both to manage supply and demand.

-Strong sell-in but weak sell-through signaled overbuying. -We tied vendor bonuses to sell-through, not just sell-in. -Weekly dashboards compare sell-in to POS sell-through.

SKU

Stock Keeping Unit; the unique product identifier used for inventory and sales tracking.

-We merged duplicate SKUs to clean the catalog. -Each color variant has its own SKU and UPC. -SKU proliferation hurts turn and GMROI.

SRP/MSRP

Suggested Retail Price/Manufacturer’s Suggested Retail Price; guides pricing strategy but may differ from actual retail and MAP.

-MSRP is $29.99 but our SRP is $24.99 for value doors. -We aligned SRP to margin targets and competitive sets. -MSRP changes require updating shelf labels and PDPs.

STEM/STEAM Toys

Products designed to build Science, Technology, Engineering, Arts, and Math skills through play.

-The STEM aisle expanded with coding robots. -Parents search for STEAM kits by age and skill. -Grants supported STEM toy demos in-store.

Street Date

The earliest date a product can be sold; retailers must embargo sales until then.

-Systems blocked POS before the street date. -Early street-date breaks risk fines and supplier sanctions. -We scheduled labor for the midnight street-date launch.

Toy Fair

Major industry trade show (e.g., The Toy Association’s Toy Fair, Spielwarenmesse) for previews, orders, and trend spotting.

-We booked spring buys after Toy Fair meetings. -Toy Fair revealed a surge in eco-friendly materials. -Demos filmed at Toy Fair fueled social content.

UPC/GTIN Barcode

Universal product codes and Global Trade Item Numbers used for scanning, inventory tracking, and ecommerce listings.

-Missing UPCs delayed receiving in the DC. -Marketplace listings require valid GTINs. -We printed shelf labels from the master UPC file.

Units Per Transaction (UPT)

Average number of units sold per transaction; a key productivity metric.

-Add-on accessories lifted UPT storewide. -Staff training on suggestive selling improved UPT. -UPT dipped when we reduced low-price impulse SKUs.

Visual Merchandising

Designing in-store displays and layouts to increase conversion, basket size, and brand appeal.

-Color-blocked building sets improved shopability. -Eye-level placement drove velocity on new dolls. -Seasonal windows showcased top gift ideas.