Retail Industry Fundamentals -- 3.1 Retail Operations Basics

Stockroom

A behind-the-scenes area where inventory is kept either because it does not fit on the sales floor or is awaiting a specific release date to be sold.

Total Inventory

A complete listing of all of the merchandise a retailer owns.

Barcode

A machine readable series of parallel lines, used in retail to create a unique item.

PLU (Price Look-Up)

A system of numbers that is used to uniquely identify bulk produce items.

RFID (Radio-Frequency Identification)

A tag containing electronically-stored information that identifies objects using a radio wave reader.

Publicity

Attention given to something or someone by the media.

Demand

Customers' need and/or willingness to buy a certain product or service.

Safety Stock

Extra inventory kept on hand in case customers buy more than the amount estimated before the next shipment arrives.

Direct Marketing

Marketing strategies aimed at specific customers and its goal is to get the customer to take action.

Retail Operations

Operational functions and activities needed to keep a retail ecosystem running at its best, the main ones being team, inventory, marketing, technology & tools, and financials.

Point-of-Sale (POS) System

Part of the inventory tracking system that assists in tracking the reduction of on-hand inventory as it is sold.

Merchandise (or Product)

Physical goods that are bought and sold, such as food, clothes, and household items.

Sales Promotion

Shorter term activities that offer an incentive for customers to make a purchase.

Inventory Tracking Systems

Systems that specify the amount of inventory in a store or distribution center, identify how much inventory was sold, track the price that each item was sold for, pass information to ordering systems, record product price reductions, and more.

Advertising

The activity of producing paid advertisements for commercial products and services.

Marketing

The branch of retail in charge of developing strategies to promote a company's brand and its specific products and services.

Loss Prevention or Asset Protection

The branch of retail in charge of implementing action plans to reduce waste, breakage or theft and increase safety.

Visual Merchandising

The branch of retail in charge of promoting specific products and services to increase sales through engaging visual displays, presenting products in the most attractive way possible.

Human Resources

The branch of retail that oversees various aspects of employment.

On-hand or Available Inventory

The number of units within the total inventory that are available to sell.

Inventory Replenishment

The process of automatic or manual ordering to meet product demands.

Stocking

The process of placing inventory on sales floor shelves, racks, or other displays.

Inventory Shrinkage or Shrink

The term used when there are fewer items in stock than in the total inventory record resulting from expired products, damage, theft, and/or paperwork errors.

Out-of-stock

The term used when there is not enough merchandise to satisfy product demand.

Supply

The total merchandise that retailers order and have in their possession.

Excess Inventory

When a retailer has too much merchandise in stock as a result of inaccurately estimating product demand.