Economic and Retail Terms
Economic Terms
If you are interested in getting involved in the retail game, or just finding out more about it, the following is a collection of terms every consumer or retailer should know:
- Consumer Sentiment
- Is a measure of how eager people are to buy new products. When the economy is slow, consumer sentiment is usually down and people want to save rather than spend.
- Contribution Margin
- Determines the percentage of profit that a product makes and how much that profit contributes to the store or the operation.
- Customer Loyalty Program
- An incentive program that rewards customers for shopping at a certain place by offering discounts or free items depending on the number of visits.
- Discount
- A reduction in the regular price of something to encourage buyers.
- E-Commerce
- Buying and selling items over the Internet. Amazon and eBay are prime examples, but many major businesses have an e-commerce component.
- End-User
- The person who will end up using the product. For instance, the consumer rather than the store that purchases the product from the manufacturer.
- Engagement
- A principle in advertising that is focused on grabbing the customers’ attention and keeping it.
- Flagship Store
- This is the store that holds the largest merchandise, is a “landmark” and a symbol of the entire chain. Macy’s in New York is a prime example. This is considered the “flagship” store, although there are other Macy’s all over the country.
- Gift Receipt
- This is a receipt that omits the price paid for the object, which is a courtesy to those who want to give a gift, enable the recipient to return it without him or her knowing how much was paid.
- Gross Domestic Product- GDP
- The total output of goods and services produced in a given country.
- Horizontal Price Fixing
- An illegal practice by which two competitors agree to a fixed price of a certain item. This is illegal because it restricts capitalism and keeps prices at an artificial level.
- “In the Red”
- Slang term meaning that a company is losing money.
- Merchandizing
- Any practice relating to the retail consumer.
- Mission Statement
- A statement of the philosophy of a certain company and ideals apart from making a profit.
- Precision Retailing
- Making detailed decisions through data obtained by stores.
- Proactive
- As opposed to a reactive person who acts only after the facts are presented, a proactive person decides to take action before something happens.
- Product Mix
- This goes beyond simple inventory to take into account which products bring the most revenue, are the most popular and which are less so.
- Profit
- The gain left over after expenses are subtracted.
- Ready-to-wear
- In contrast to tailor-made clothing, most of the clothes today is mass-produced and can be worn without alterations.
- Retail
- The sale of products to end-users and not to stores for resale.
- Revenue
- The total income that results from sales of products.
- Return on Investment
- The profit that is made by an investment without counting the original amount invested.
- Spam
- Unsolicited e-mails sent to people in order to encourage them to buy or use a service. In some places, this is illegal.
- Target Market
- The kind of people expected to buy a certain product.
- Chain Store Sales
- These are an indication of market sales and can predict what people will be buying next.
- Productivity
- The amount of output versus time and money spent on producing the goods.
- Venture Capital
- Money used to start projects or to invest in a business.
- Bullish
- To be confident about a trend, a stock or the market.
- Bearish
- To be pessimistic about the market, a stock or a trend.
- Aspirational Buyer
- Someone who “buys up” often items he or she cannot afford.
- Same Store Sales
- The number of sales from new stores.
Additional Resources
- If you are interested in learning more about retail terms, Retail In Motion is a great place for a quick basic guide.
- About.com also has a thorough list called Glossary of Retailing worth looking at. It is quite encyclopedic with hundreds of entries.
- To learn the basics about the market, Seekingalpha.com offers very useful information.
- CNBC and thestreet.com are two more very informative places with current events.
- There is a recent article by Marketing charts about the top forty retail stocks, and Google finance has thorough general information about the market.