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.
A reduction in the regular price of something to encourage buyers.
Buying and selling items over the Internet. Amazon and eBay are prime examples, but many major businesses have an e-commerce component.
The person who will end up using the product. For instance, the consumer rather than the store that purchases the product from the manufacturer.
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.
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.
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.
The gain left over after expenses are subtracted.
In contrast to tailor-made clothing, most of the clothes today is mass-produced and can be worn without alterations.
The sale of products to end-users and not to stores for resale.
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.
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.
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.
To be confident about a trend, a stock or the market.
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.
  • 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, offers very useful information.
  • CNBC and 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.