Common Terms and Jargon in the Retail Industry

Before seeking employment in the retail industry, what do you really know about common terms and jargon in the retail industry?  Perhaps this list will help you to be more prepared for that first interview or job experience.

Pay-per-click Advertising: Pay-per-click advertising is used by retailers for marketing their products and/or brand. It is a sponsored link usually found on the right side or at the top of a Web page. When using pay-per-click advertising, you only pay when a person actually clicks through to your website.

Above the Line (ATL): A mass media technique used in advertising such as cinema, TVC, radio and search engines. These are used to promote brands. Since this type of communication is basically conventional, it is often considered to be impersonal by customers. However, it does help to establish your brand’s identity. Typically, it is everything you do before a customer actually enters your retail outlet.

E-mail Marketing: This is a marketing strategy in which the retailer sends customers e-mails including newsletters, friendly reminders or announcements of special events.

Brand Equity: Brand equity is the power of a brand gotten through its goodwill (link) and recognition earned over time of its name. This goodwill and recognition results into both a higher sales volume as well as higher profit margins against the competition.

Allowance: An allowance is a price reduction allowed for many different reasons such as merchandise being slightly defective or not being delivered when promised.

Break Even Analysis: A break even analysis is a tool used by marketers to forecast what the minimum sales volume must be for a company to make a profit. The factors used to forecast the point in which a company will realize a profit are the product’s price and both the fixed cost and variable costs of the product.

Profit and Loss Statement (P&L): A profit and loss statement is an account report highlighting the following: the total net profit, the cost of goods sold and revenues.

EDLP (Everyday Low Pricing): EDLP is a strategy in pricing in which the consumer is promised to always be offered the lowest available price without the use of coupons, discount promotions or comparison pricing. This strategy is believed to build shopper loyalty. However, its advantages also include the elimination of manufacturers’ cost to distribute and process coupons as well as retailers’ periodic expense and time of price markdowns.

Free on Board (FOB): When the shipping costs are totally the retailer’s responsibility and not the vendor’s, it is said to be free on board.

E-Marketing: Any form of marketing that is a digital technology such as mobile phones, Internet and email is known as e-marketing.

Bottom Feeders: If customers buy only clearance merchandise, they are referred to as being bottom feeders.

Forecast: Future demand of a specific product over an explicit time period is estimated in order to develop a forecast. The forecast is determined by market trends, historical data, feedback of the sales force and marketing data.