Even the most experienced professionals can sometimes find it challenging to keep up with the ever-evolving language of retail. New jargon and buzzwords are regularly becoming part of our everyday language in response to rapidly changing consumer trends and technology. Updated for 2019, here’s a lexicon of the most frequently heard and often misunderstood terms in the world of retail technology.
Actionable Analytics: Static reports and dashboards are not new to most retailers. These tools are now evolving, however, to facilitate interactive participation from the user, enabling them to drive business change by drilling through to perform immediate actions, which coined the term Actionable Analytics.
Artificial Intelligence (AI): Amazon defines artificial intelligence as “the field of computer science dedicated to solving cognitive problems commonly associated with human intelligence, such as learning, problem-solving, and pattern recognition.” In other words, artificial intelligence is a broader concept of machines conducting tasks that would otherwise require the natural intelligence of the human brain.
Beacons: The terms Beacon and iBeacon are frequently used interchangeably, but iBeacon is a trademarked name for Apple’s Beacon technology. Beacons are Bluetooth-enabled low energy devices that communicate with shoppers’ smartphones or wearables (for example, an Apple Watch) to, with the shopper’s permission, send them messaging such as promotions, useful shopping tips, in-store events and more. Beacons can also be used by retailers to collect information about shopper behavior.
Bricks and Clicks: Bricks and Clicks retailers operate physical store locations (bricks) as well as online stores (clicks). See also Omnichannel and Unified Commerce.
Big Data: Big data is a term that refers to the large volume of structured and unstructured data that businesses collect, store, and analyze to drive their businesses forward. Gartner defines big data as “high-volume, high-velocity and/or high-variety information assets that demand cost-effective, innovative forms of information processing that enable enhanced insight, decision making, and process automation.”
Click and Collect: One of the most requested features that consumers have of e-commerce sites is Click and Collect. Click and Collect enables users to buy online and collect their purchase in a physical store of their choice. Retailers benefit from reduced shipping fees and additional foot traffic, which often leads to additional impulse purchases.
Clienteling: Clienteling is a relationship-based selling technique used by salespeople to establish long-term relationships with key customers based on data about their preferences, behaviors, and purchases. The term Clienteling is also commonly used to refer to Clienteling software, designed to guide users through the best practices of assisted selling, often using data gathered from multiple channels.
Cloud: The Cloud is a term used to describe hosted software solutions. Cloud deployments provide lower initial IT infrastructure investments, reduced total costs of ownership, rapid implementations and many more benefits.
Clusters (store, customer): Clusters consist of grouping stores or customers with similar characteristics based on numerous demographic metrics or any other relevant data.
Conversion Rate: Conversion rate is the percentage of website or store visitors who perform any desired actions (usually who complete a purchase). This is one of the most important metrics within retail analytics, as it is a key indicator of a retailer’s performance.
Customer Acquisition Cost: Customer Acquisition Cost measures the costs of acquiring a new customer.
Customer Attrition: Customer attrition, also known as customer churn or customer defection, is the number of customers who stop doing business with a company.
Customer Experience (CX): The retail customer experience, often abbreviated as CX, is about more than theatrics: it’s a product of the intersection between the customer journey and the product journey. To create great experiences, retailers must address product-related factors such as purchasing, allocation, and manufacturing as well as carefully orchestrate the customer journey with thoughtful marketing campaigns and relationship-building tools.
Customer Journey: The customer journey is a framework that describes the multiple experiences and touchpoints that a customer will encounter as they build a relationship with a brand. Customers will frequently interact with a brand via multiple channels along this journey, which may include social media, online and physical stores.
Customer Lifetime Value: Customer Lifetime Value is the monetary value that customers bring to businesses thanks to the combined purchases they make over the course of their relationship with a brand.
Customer Retention: Customer retention is the ability of a company to keep its existing customers.
D2C: D2C is an acronym to describe Direct to Consumer, sometimes referred to as B2C or Business to Consumer. In contrast with B2B, or Business-to-Business e-commerce sites, which sell exclusively to businesses, D2C sites sell directly to the public.
Data-Driven Decision Making: Unlike business decisions made purely on intuition or experience, Data-Driven Decisions are made using metrics such as Key Performance Indicators (KPIs). As an example, a merchant might place slow-moving stock in a more prominent location after reviewing a dashboard about inventory KPIs.
Digital Transformation: Digital Transformation is about using technology to solve the problems we encounter in our lives and at work. Digital transformation does not just provide a strong competitive advantage – it has become essential to retail survival.
Disruptive Technology: Disruptive Technology causes fundamental changes in the way people live and work. Disruptive Technology can sometimes be met with resistance at first, but usually results in long-term benefits for both users and organizations.
Endless Aisle: The Endless Aisle ensures that shoppers can always buy the product they want (in the size and color they need), even when it’s not in stock at the store they happen to be visiting. Retailers can fulfill Endless Aisle orders through other stores or warehouses, and customers often have the option to have the product shipped to them or to pick up in the store of their choice.
Etail: Etail, or Etailing, refers to online retailing, also commonly referred to as e-commerce.
Experiential Rewards: In traditional loyalty programs, consumers are often rewarded with discounts, promotions, or free products. After seeing great success in the hospitality industry, Experiential Rewards, such as VIP events and concierge services, are now gaining in popularity in the retail sector.
GMROI: The gross margin return on investment is a calculation that measures a company’s inventory profitability.
Gamification: Gamification is the concept of making everyday tasks into a game. This can encourage user adoption and promote friendly competition between team members.
ISR (Inventory to Sales Ratio): ISR is used to determine the amount of stock a company is carrying versus the amount of goods they sold over a given period of time.
Influencer Marketing: Influencer Marketing is a strategy used to engage people who have a strong influence over important market segments. Influencers are not necessarily people with the largest social circle or follower count overall: rather, they are well-connected and highly regarded among a particular group of people.
IoT: IoT is an acronym for the Internet of Things, a category of physical products that are connected to the Internet, delivering digital experiences to everyday activities. For retailers, IoT provides a new communication and engagement channel with consumers, as well as new ways to study and understand shopper behaviors.
KPIs: Key Performance Indicators (KPIs or Metrics) are the values by which a retailer measures his business. They can include sales, store square footage, item costs, promotional data, and many more. Reports and analytics take these metrics and use them to display data that is relevant to a retailer’s operation. An example is a Flash Sales Report or Monday morning report which may show sales per square foot, or sales per store, or any other meaningful data that a retailer uses to gauge business performance. It is important to have a large number of these metrics pre-defined so they can be used to generate the specific reports and business analytics needed for each retail organization. If they are not pre-developed, then it can be costly to build them from scratch. A data model that contains these metrics can speed the implementation of a retail analytics solution and lower costs substantially.
Lean Retail: In his book, Lean Retail & Wholesale, professor and author Paul Myerson defines the shift towards lean retail as a dramatic change in the way products are ordered and distributed that is far more data-centric and focused on understanding and meeting customer demand.
Machine Learning: Machine learning is one possible application of AI in which humans feed a machine raw data and step aside while the machine learns for itself.
m-Commerce: Shopping that happens on a mobile device, such as a smartphone or tablet, is referred to as m-Commerce. This is becoming one of the most frequent avenues for consumers to engage with retailers, so it’s critical to ensure that the m-Commerce experience is a positive one.
Micro-Moments: Google defines micro-moment as “an intent-rich moment when a person turns to a device to act on a need – to know, go, do, or buy.”
mPOS: mPOS is an acronym for Mobile Point of Sale, which uses a mobile device such as a smartphone, tablet or another wireless device to perform checkout and customer service activities without being confined to a physical cash wrap.
Omnichannel: Omnichannel retailing goes beyond traditional retail channels such as brick-and-mortar stores and catalogs to include online touchpoints such as e-commerce and social media. With today’s customer journey involving so many channels, it’s critically important for retailers to take a holistic approach to data and operations.
Open-to-Buy Planning: Open-to-Buy (OTB) is a financial budget for merchandise buyers. By understanding inventory needs from a financial perspective, including revenue and margin, retailers gain insight into their open-to-buy process and ensure the organization will not overspend merchandising budgets.
Out of Stocks: Out of stocks happen when there is no longer sufficient inventory on hand and you’ve run out of the products customers are trying to purchase.
Overstocks: Overstocks, also known as excess stock or excess inventory, are products in inventory that exceed consumer demand and safety stock. Retailers need to avoid filling valuable shelf and rack space with products that hard to sell.
Pop-Up Shop: Pop-Up Shops are temporary physical store locations. They can sometimes be seasonal, like a Halloween costume shop, or used to pilot or launch a new concept, product, or idea.
Retail Apocalypse: The much-publicized Retail Apocalypse has been debunked as a myth. While it is true that many retailers have succumbed to their failure to modernize and innovate, overall, the retail industry is thriving, and brick-and-mortar retail continues to do well.
Retail Renaissance: In contrast to the Retail Apocalypse mentioned above, the Retail Renaissance is a more apt term for the change occurring in the industry. As new technology emerges and shopper demands change, retailers need to adapt in order to survive and thrive.
Retailtainment: Retailtainment – the convergence of shopping and entertainment – is a growing trend in retail that’s meant to deliver enticing in-store customer experiences.
SaaS: SaaS, or Software as a Service, refers to a subscription model for software that includes not only access to the software but also hosting and maintenance services. This benefits retailers because it provides reduced initial costs as well as removes the work of maintaining and updating server infrastructure. It also provides retailers with the ability to scale up systems quickly during peak periods or as their business grows, and scale back during slower periods.
Sales per Square Foot: Sales per Square Foot is a metric that enables merchants to calculate the sales value their businesses generated per square foot.
Sell-Through: Sell-Through is the amount of goods sold by a retailer in a given period, often expressed in percentage to track the success of certain products.
Showrooming (also Reverse Showrooming): Showrooming is the concept of customers using physical stores to see and try products, and then ultimately purchasing them online. Reverse showrooming, or webrooming, is when customers browse and research online to then make the purchase in a local store. While these concepts were once viewed as a threat, for retailers who take a holistic, omnichannel approach, these as simply positive steps of a healthy customer journey.
Stock Turn: A stock turn, also known as inventory turnover, is the rate at which a company sells products over a given period of time.
Unified Commerce: Unified Commerce is an approach that brings together once-disparate channels to orchestrate a cohesive customer experience. It typically involves integrating systems to provide retailers with a single view of data, including customer behaviors, sales, and inventory.