Saturday, March 8, 2008

Retail Jargons made easy !

New to Indian retail industry or contemplating an entry , then here is what you should know to get over the jargon shock !!:: here goes , the A B C of retail ::

Catchment ::The area /zone of the city from which the customers come into for shopping from a particular store , catchment analysis pre launch would ideally decide the product mix and formats of the stores , catchment analysis done after a time gap of launch would also give a correct picture of whats happenng and where to concentrate ur Mktg energies to get more walk ins !
Cash memo size :: CMS = total sales for the month /no of bills generated in the month

UPT :: Units per transaction , would give you a fair idea on to how customers are buying more of your products , per person or less per visit , UPT = No of bills generated in a month / total bills generated in the month , the higher trending of UPT with a distinct increase in cashmemo size is a healthy indicator of business .as UPt can be taken up by increase low value sales , which would give the numbers !!( UPT and CMS should have positive correlation )

Like-for-like comparison( l to l ) : Comparing sales figures from the current period with sales figures from the same period in the previous year..This is a critical business health parameter check .

Units per sqft :: UPS = Total units sold in the month/Total area , basically gives yoy the sell thru rates on a sqft level , good comparison point while evaluvating performance between stores !

Rs /Sqft ::= Total business generated in a month /total sqft , basically indicates biz generated at per sqft level

conversion :: no of bills generated /number of customers walked in

Footfall: The number of people making their way to your store or shopping precinct. BOGO: Buy one, get one free promotional offer and a way to be rude to customers without your boss having an excuse to sack you. GWP: Gift with purchase. A type of promotion designed to encourage us to buy expensive perfume or makeup with the promise of a neat little goody bag containing free samples.

SOP :: Standard Operating procedures ,basically documents the way to operate a store /retail setup

VM :: Visual merchandising, the science behind" jo diktha hey woh biktha hey "!

Shrinkage: Sounds like its caused by a diet but often the result of shoplifting. This is the proportion of your stock which is lost through damage, theft or loss. lower the better , typically measured as a % of sales generated !

Gross margin GM = Sales - COGS

GMROF :=GM /Total sqft for the particular store or section

GMROI = GM/ total inventory for the particular store or section
GMROL = GM / number of people employed

NET MARGIN( Nm) = GM - Opex
NMROF/NMROI/NMROL are nothing but Net margin ( NM ) version of the above

OTB ( opportunity to Buy ) = Planned purchase -already ordered qty , basically a merchandising tool which helps in the planning process

Private label :: Nothing but inhouse brands off the retailers , built on 0 advertising cost , fights other well known /well advertised brands mainly on shelf space plus on price

PICS :: perpatual inventory control system ( PICS ) , is the process off stock taking to report actual stocks category wise /brandwise

EOSS :: End off Season Sale , Apparel retailers typically would work out off 2 seasons , Autum winter /Spring summer at the end off each season , retailers would markdown( discount ) their merchandise to make space for the next season merchandise .Although its another matter that customers think its an annual 2 times a year bargain hunt !

More updates Later ..............cio ! ( hope this was useful !) .........


thewhiterabbit said...

thankyou for the quick ref doc you took pains to create..

cheers :)

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Anonymous said...

You have tested it and writing form your personal experience or you find some information online?

tarun said...

gud one

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