The modern retail glossary — 25 terms every fashion retailer should know

Do you ever feel lost in the jungle of retail abbreviations like AR, EMV, RFID, or IoT? Read through our glossary of the most important retail terms, trends, and services that you as a fashion brand, supplier, or retailer should know.

Augmented Reality (AR)

By mixing the physical world with virtual objects using smartphones, tablets, or headsets, both physical and online stores can present its products in immersive ways. Virtually trying out a sneaker at home or finding in-store perks when pointing the camera somewhere integrates the customer to the shopping experience.

Automated accounting

Impulso’s accounting reports will become automated through a a seamless integration between your financial system and Impulso. All you have to do is monitor your business through our indispensable dashboard.

Big Data

In retail, big data analytics lets companies get to know their customer better and better with each purchase. This improves customer service, personalized shopping experience, and can also foresee markets trends and make decisions accordingly.

Consignment

A consignment deals means that a retailer will pay a distributor or seller after the item sells. A consignment shop usually focuses on a particular product for niche customers, and usually sources excess items and deadstock from the seller, who is looking for a opportunity to make some money before the products get donated or recycled.

Brick and Click

Also called ”click and mortar” and ”clicks and bricks”, this business model combines a physical retail space (brick) and an e-tail channel or web shop (click) at the same time. This gives small and medium-sized businesses the opportunity to offer multiple shopping options to consumers and implementing a greater brand reach.

Beacons

Beacons are small hardware devices that are placed in physical retail stores, that connects to customer’s phones via bluetooth to send them notifications to optimize the in-store experience. Tailored discounts, promotions, events, and more can be sent to individual customers, if they have the store or brand’s official app downloaded and Bluetooth turned on on their smartphone. 

Contactless payments

Contactless payments is collective term for payments of goods by tapping a contactless chip card, smartphones, or wearables over a contactless-supported payment terminal. Radio-frequency identification (RFID) and near-field communication (NFC) are two secure fintech services that fall under contactless payments.

EMV

EMV, short for Europapay, Mastercard, and Visa, is a payment method that was introduced to combat skimming fraud (copying a payment cards information from the card’s magnetic strip). EMV cards are embedded with a chip that creates a unique code for every payment and transaction. This makes it harder for a hacker to copy the chip card, as the original transaction code is not usable again and the card would get declined.

Internet of Things‍

Internet of Things, often abbreviated IoT, describes physical objects that are equipped with sensors, processing ability, software, or other technologies that constantly exchange data with other devices through an internet connection. For retailers, it gives the opportunity to measure queue times, daily visitors, or storage statistics at the same time.

Omnichannel retailing

Omni-channel retailing is an elaborated version of the brick and click retail strategy. By having multiple digital and physical touchpoints, customers can move across apps, social media accounts and platforms, pop-ups, sample sales, meet-ups, and other occasions to get a full grip of the brand. This keeps the customer engaged and also gives the brand or retailer a great opportunity to reach out with offers or stories across many platforms. 

Overproduction‍

For the fashion industry, overproduction is birthed from the fact that textile and garment producers create more clothes than actually gets sold, be it at retailers or from their own sales channels. This is proven in data on retailer’s sell-through rate (STR). Statistics site Accelerated Analytics reports that apparel retailers don't reach a STR above 68 per cent until a year after getting the garments through the door. A half year after receiving their ordered clothes the STR is at 45,5 per cent, and after two months only 24,3 per cent of the garments are sold. For retailers that invest in weekly or monthly collections, this means a lot of excess clothes in the storage room.

Personalization

Making an individual customer feel unique, seen, and emotionally connected to a brand or a store will improve the chances of a purchase. One example of physical retail personalization is educating store clerks about the history and origins of a product, to be able to tell genuine stories behind it. A digital example is the importance of omnichannel retailing, where customers can connect to their favourite brand or store seamlessly on social media, applications, websites, or newsletters and in return receive responsive engagements along the way.

Real-Time Inventory

Thanks to Impulso’s real-time inventory service, as a supplier you can always see how your products are performing at any given retailer, at any given time. This allows you to quickly distribute new products that are in high demand, or re-distribute products from one retailer to another. Maximising sales.

Point-of-Sale (POS) System

You may think of this system as the cash register. Today, however, it can be used on any kind of device, combining software, hardware, and payment processing services used to accept payments from customers in person or online. It also routes funds to the user’s bank account after each sale. Except for tracking sales performance, completing transactions, and printing receipts, modern versions of the system can also generate reports, help manage inventory, collect customer contact information, and let employees clock in and out.

Retail Academy

In 2023, our system will include a Retail Academy, an intuitive and powerful tool to educate retail staff on how to engage with the customer and increase sales.

Retail Data

Referring to any facts or figures that retailers can collect about their business, in order to improve it, retail data comes in many different shapes and forms, such as point of sales data, market data, and loyalty card data. The most common use cases can be retail analytics, competitor analysis, store performance prediction, improve customer experience, and shelf and promotion planning and it also drives retail intelligence, market share analysis, and operational intelligence. 

RFID

Last year, McKinsey stated that with advances in readability, range, and cost, radio-frequency identification (RFID) stands poised to address today’s need for more data-driven, more accurate, and more customer-driven shopping experiences. The technology, it was reported, has the power to unlock up to 5% top-line growth from better stockout management and shrinkage reduction as well as to achieve a 10–15% reduction in inventory-related labor hours. Swedish retailer Gina Tricot’s CEO Ted Boman also explains the benefits of using RFID when it comes to developing omnichannel integration. ”By having an almost real-time updated inventory in our stores we now can connect our online directly to our stores’ inventory,” he says.

Robotics (in-store and in-delivery)

Robots are rapidly becoming the first customer touch point in retail outlets. It offers retailers the flexibility to move their sales personnel to functions that will drive higher sales. In the logistics and supply chain, it enables savings from stock-out shortages and losses, and shrinkage due to administrative errors. Artificial intelligence, analytics, and machine learning combined with robotics can also drive customer engagement. According to Boston Consulting Group, the global robotics market is estimated to reach USD 87 Billion by 2025 and it is believed that more than half of this will be allocated for the retail market. The real benefit of retail robots, Harvard Business Review reports, will be the opportunity to capture more granular data about the products on the shelves and customer buying patterns, which can increase efficiency and accuracy in inventory management.

Sales Analysis

This is the process of understanding how the business performs in terms of sales, providing insights into the past, present, and future performance of a business. It can be used to help forecast trends, identify opportunities for growth, and develop a strategic action plan for the company. It’s especially helpful for businesses that want to grow or make changes. They can be presented as numbers, paragraphs, bar graphs, and charts.

Sell-through

The term for the amount, or percentage, of a product that is sold to consumers relative to the total quantity available in stores, is one of the most important retail KPIs to keep an eye on. Doing that can reduce overstock, move products faster, and ultimately have better cash flow. A good rate, according to many experts, is between 75 and 80%, depending on the industry. For instance, data from Accelerated Analytics indicated sell-through benchmarks for apparel to 24% after two months and 69% after a year. For cosmetics, the equivalent number is 25 and 48%. And how to increase it? To put it short, the key is data, including tracking the sell-through rate monthly to spot any inconsistencies and trends throughout the year.

Stock-Keeping Unit

These scannable bar codes can be seen printed on product labels in a physical store, and also used by e-tailers, catalogues, warehouses, e-service providers, and product fulfilment centres to automatically track the movement of inventory. Shortened SKUs, they’re a combination of around eight characters, creating a code that tracks the price, manufacturer, product details, and point-of-sale. When a customer buys an item at the point-of-sale (POS), the code is scanned and the POS system automatically removes the item from the inventory and records other data such as the sale price.

S-Commerce

S-commerce, or Social commerce is the process of buying and selling products and services directly through social media platforms such as Facebook, Instagram, WhatsApp, or Twitter. While traditional e-commerce means transactions from buyers searching or browsing from a digital range, buyers and sellers here have a more direct connection with each other before concluding a purchase. Social media users worldwide tripled between 2010 and 2020 and has reached 4.74 billion in October 2022 — 59.3% of the total global population. However, recent numbers showed that only 10% of internet users purchased directly through social media — compared to the 75% who make online purchases — and 35% of internet users claimed that they have no interest at all in making purchases through social media in the future.

Units per transaction

Also known as items per customer (IPC), units per transaction (UPT) is used within retail to calculate how many products customers are buying by dividing the number of units by the total number of transactions. It can be used by retailers and distributors as a key performance indicator (KPI) where a high UPT indicates that they carry the products their customers want to purchase. A low UPT, on the other hand, is a sign to dive into the reasons why consumers are buying fewer units.

Virtual Try-Ons

The pandemic accelerated brands’ urge to offer one of the main advantages of brick-and-mortar stores — the possibility for customers to try out products before the purchase — and they look into technology to help. Virtual Try-Ons make it possible to try on almost anything in just a few seconds, for instance through a mobile app, be it the right makeup shade, model of sunglasses, or pair of sneakers. Your kids have probably already tried it, since Snap is leading this development (and has partnered with Amazon to offer ”seamless purchase” in the latter’s Fashion store), and we also see Virtual Try-Ons in physical retail, such as smart mirrors.

Webrooming

Retail experts state that physical stores of today and, even more so, in the future will become more like showrooms. ”Showrooming” simply means that consumers go to stores to touch and feel before opting to buy the product online. The opposite, webrooming, means that more and more consumers spend time on the internet for product research before picking it up in-store, avoiding waiting time and shipping costs from online shopping. According to a Shopify report from last year, about consumer behaviour for this year, 59% of consumers are likely to look at a product online and buy it in-store (for ”showrooming”, the number was 54%), so webrooming seems to be here to stay.