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RETAIL NEWS
TOP STORIESSmaller rivals are assaulting the world’s biggest brands ― p5
Retail is bigger than ever p7
JULY/AUGUST 2016
INNOVATIONWhat to wear to work? Soon, a tiny computer. ― p8
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JULY/AUGUST 2016 RETAIL NEWSCO
NTEN
TS 5 BEST PRACTICES / MARKET TREND REPORTBrexit - How Will It Affect The Compliance Industry?
Manufacturing in the Digital Age: An IDC Infographic
IDC Manufacturing Insights: The Extended Supply Chain
Invasion of the bottle snatchers: Smaller rivals are assaulting the world’s biggest brands
6 TOP STORIESThird Party Logistics (3PL) Market is Expected to Reach $1,110 Billion, Globally, by 2022
How off-price outlets stay strong in the age of Amazon
Report: Retailers added 29,500 jobs in June
Study: 76% of businesses say IoT will drive future success
What Does the Impact of Brexit Mean for Supply Chain and Logistics Organizations?
Don’t let the headlines fool you – retail is bigger than ever
Retail sales grow at a solid pace, up 0.8% in June
8 INNOVATION & OPERATIONSBeyond Kiva: How Amazon Triggered a Robotic Arms Race 7
A Smarter Way to Run a Supply Chain
Neopanamax Container Ship is Biggest to Visit Port of New York and New Jersey
What to wear to work? Soon, a tiny computer
Samsung Plans to Boost Spending as S7 Revives Phone Fortunes
Alibaba aims to create closed loop for all consumer needs
Lazada to lean on new owner Alibaba
Brexit vote brings a bonanza of bargains in
9 RETAILING IN ASIA-PACIFIC
10 RETAILING IN EUROPE, INDIA, MIDDLE EAST, AFRICAAutonomous Robots Start European Delivery
UK retailers see new prospects in Ireland
Predictions for India’s online retail growth differ
Germany’s Villeroy & Boch shifts back into US growth mode
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JULY/AUGUST 2016 RETAIL NEWS
11 RETAILING IN LATIN AMERICAUS ports likely to spend $9B annually after Panama Canal expansion
Latin America: DIA Argentina in Focus
Cuba’s Mariel port has ambitious plan to become giant feeder hub
RKF taps Cesar to strengthen ties with Latin America
12 RETAILING IN NORTH AMERICAThe fourth biggest retail event isn’t even a holiday
Starbucks Will Start Blocking Some Sites
Amazon set to rival NYC’s bookstores with Hudson Yards spot
Half of Connected Devices in US Homes Are Mobile
13 CWW RETAIL LOGISTICS SUCCESS STORYCrane Worldwide Logistics delivers last mile e-commerce fulfillment solution
14 RETAILING JARGON
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JULY/AUGUST 2016 RETAIL NEWS
Once again retail sales continue to post positive
gains for a third consecutive month gain during
the second quarter. The Commerce Department
reported retail sales for June increased 0.6%
following a 0.2 % gain in May (see below). Most
retail segments reported increases except for
clothing and clothing accessories which declined
while electronics that remained flat. The bigger
surprise was the gains in the building materials
and supplies increases attributed to a steadily
strengthening housing market.
Beyond the gains in building materials and supplies
sector, the following retail sectors all experienced
gains (National Retail Federation, 2016)
• Online and other non-store sales increased 1.1
percent seasonally adjusted over the previous
month and 13.9 percent unadjusted year-over-year.
• Sales at general merchandise stores increased
0.4 percent seasonally adjusted over the previous
month and 1.1 percent year-over-year.
• Furniture and home furnishings stores’ sales
increased 0.5 percent over the previous month and
3.0 percent unadjusted over last year.
• Sporting goods stores’ sales increased 0.8
percent seasonally adjusted month-to-month and
6.1 percent unadjusted year-over-year.
• Sales at health and personal care stores increased
0.7 percent seasonally adjusted month-to-month
and 8.2 percent unadjusted year-over-year.
During the remainder of July and into the first
weeks of August, many of our retail customers are
preparing to kickoff of their peak sales seasons
starting with back to school (BTS). We need to
be prepared to help them in the development of
flexible and scalable logistics solutions which
leverage our capabilities and strengths allowing
them to easily handle the challenges of Q3 and
Q4. In this month’s newsletter, I have selected
articles and reports which will help identify best
practices, solutions, technology, and trends we
can use in the development of our solutions for our
retail customers. I have again highlighted our new
final mile logistics service - Doorbell™ as many of
our retail customers are increasingly using order
fulfillment and shipping from store locations for
online purchases. Finally, I am including more useful
retailing and supply chain terms and definitions.
Sincerely,
Dr. David Widdiefield, DM.Director, Retail Solutions, Crane Worldwide LogisticsEmail: [email protected]
Hello everyone,“
Retail SalesTotal retail and food services sales, seasonally adjusted.
Source: Commerce Department | By The New York Times
”
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JULY/AUGUST 2016 RETAIL NEWS
Brexit - How Will It Affect The Compliance Industry? Supply Chain 247- June 23rd 2016 will go down as one of the most important chapters in the modern history of Britain, as the country voted in a referendum to exit as a member of the European Union.
> Download the report to learn more._____________________________________________
Manufacturing in the Digital Age: An IDC Infographic Industry Week - How can your supply chain can drive digital transformation for your business? In today’s era, a digitized extended supply chains align product design, manufacturing, and service to achieve customer-centricity and better business results. It starts with:
• Business process redesign
• Investment in new and existing technologies • Corporate and organizational buy-in
Learn why it is pivotal for manufacturing companies must transform, or they will be left behind in the digital age. Download this IDC Infographic for the facts and figures about the digital world of manufacturing.
> Download the report to learn more. _____________________________________________
IDC Manufacturing Insights: The Extended Supply ChainIndustry Week - Manufacturing supply chains are experiencing levels of change heretofore unprecedented in their history. Significant shifts in consumer preferences and behaviors, along with the emergence of a whole new set of enabling technologies, are conspiring to create both massive opportunities and equally massive challenges for the traditional supply chain. It comes as no surprise, then, that supply chains are transforming themselves to meet these opportunities and challenges.
> Download the report to learn more._____________________________________________
Invasion of the bottle snatchers: Smaller rivals are assaulting the world’s biggest brandsThe Economist - They make some of the world’s best-loved products. Their logos are instantly recognizable, their advertising jingles seared in shoppers’ brains. For investors, they promise steady returns in turbulent times. They seem to be getting ever bigger: on June 30th Mondelez International made a $23 billion bid for Hershey to create the world’s biggest confectioner; and on July 7th Danone, the world’s largest yogurt maker, agreed to buy WhiteWave Foods, a natural-food group, for $12.5 billion. Yet trouble lurks for the giants in consumer packaged goods (CPG), which also include firms such as General Mills, Nestlé, Procter & Gamble and Unilever. From 2011 to 2015 large CPG companies lost nearly three percentage points of market share in America, according to a joint study by the Boston Consulting Group and IRI, a consultancy and data provider, respectively. In emerging markets local competitors are a growing headache for multinational giants. Nestlé, the world’s biggest food company, has missed its target of 5-6% sales growth for three years running.
> Download the report to learn more
Best Practices/Market Trend Report
IMAGE: IStock
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JULY/AUGUST 2016 RETAIL NEWS
Third Party Logistics (3PL) Market is Expected to Reach $1,110 Billion, Globally, by 2022Market Watch- According to new research report published by Allied Market Research, titled “World Third Party Logistics (3PL) Market - Opportunities and Forecasts, 2014-2022”, the global third party logistics market is expected to reach $1,110 billion, registering a CAGR of 5.16% during the forecast period 2016-2022. In 2015, Asia Pacific accounted for the largest revenue share of about 36%, followed by North America. The strong roadways segment in the Asia Pacific region, which processes highest volume of goods transported, invariably supported the growth of 3PL market in the region. The world 3PL market is poised to witness significant growth during the forecast period owing to increase in e-commerce industry and trade activities globally and inclination of manufactures and retailers towards enhancing their profitability. Moreover, government regulations across different countries are increasing the demand of 3PL across various industries. However, factors such limited control on outsourced activities and inefficiency of 3PL service provider to an extent is hampering the growth of this market.
> Read more_____________________________________________
How off-price outlets stay strong in the age of AmazonForbes- Outlet stores that boast discounts of between 20% and 60% continue to grow in popularity with US consumers, making them more resilient than some other retail channels in the face of growing competition from Amazon. About two-thirds of consumers shop at off-price chains including T.J. Maxx, Ross Stores, Burlington Coat Factory and Nordstrom Rack, and the discounters generate 75% of clothing purchases across all channels, according to NPD Group.
> Read more_____________________________________________
Report: Retailers added 29,500 jobs in June NRF- Retailers created 29,500 of the 287,000 new jobs US employers added last month, according to the Labor Department, and the industry has added 241,600 employees since June 2015. Department stores and general merchandise retailers saw the strongest growth last month, adding 4,300 and 8,700 new jobs, respectively. Read more.
Retail sales grow at a solid pace, up 0.8% in June – Retail sales (excluding automobiles, gasoline stations and restaurants) continued to grow in June and were up 5.1% year-over-year, according to NRF calculations. Most retail segments reported monthly gains, except for clothing and clothing accessories, which reported a decrease, and electronics, which remained flat. > Read more
Study: 76% of businesses say IoT will drive future success IOT Daily- Consumers can expect to see more of the impact of the Internet of Things in consumer electronics and at retail. The internet of things is expected to ramp up in consumer electronics and retail companies, with 76% of businesses saying IoT is a critical component to their future success, a Vodafone study found. The report shows that 63% of businesses will launch IoT technologies over the next year. > Read more
Top Stories
Internet of Things | IMAGE: IStock
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JULY/AUGUST 2016 RETAIL NEWS
Beyond Kiva: How Amazon Triggered a Robotic Arms Race Industry Week - An Amazon warehouse is a flurry of activity. Workers jog around a manmade cavern plopping items into yellow and black crates. Towering hydraulic arms lift heavy boxes toward the rafters. And an army of stubby orange robots slide along the floor like giant, sentient hockey pucks, piled high with towers of consumer gratification ranging from bestsellers to kitchenware. Those are Kiva robots, once the marvel of warehouses everywhere. Amazon purchased these robot legions in 2012, this acquisition effectively gave Jeff Bezos command of an entire industry. He decided to use the robots for Amazon and Amazon alone, ending the sale of Kiva’s products to warehouse operators and retailers that had come
to rely on them. As contracts expired, they had to find other options to keep up with an ever-increasing consumer need for speed. It has taken four years, but a handful of startups are finally ready to replace Kiva and equip the world’s warehouses with new robotics. Amazon’s Kiva bots proved this kind of automation is more efficient than an all-human workforce. The new robots being rolled out look different, partly because the industry is still experimenting and partly because of patent issues. Some focus on picking items off shelves, others zoom around with touch screens. All are aimed at saving retailers money as they race to get their wares to your doorstep as quickly as possible. > Read more
Innovation & Operations
What Does the Impact of Brexit Mean for Supply Chain and Logistics Organizations? SupplyChain247- Supply chain, logistics and distribution sectors may be among those seeing and experiencing some of the most dramatic shifts and severe implications as the result of the U.K.’s departure from the European Union. The United Kingdom’s recent decision to leave the European Union marks an unprecedented event that is expected to have a reverberating and ripple effect - not just on the region itself, but across the rest of the world as well. > Read more_____________________________________________
Don’t let the headlines fool you – retail is bigger than ever NRF- The headlines are clichés: the death of retail, the death of the department store, the death of the shopping mall. But the truth is, retail is bigger than ever. In his monthly column for STORES Magazine, NRF President and CEO Matthew Shay explains that retail is retail, regardless of whether it’s conducted in a store, online or in a form yet to be seen – and it’s always focused on the customer. > Read more
Retail sales grow at a solid pace, up 0.8% in JuneNRF- Retail sales (excluding automobiles, gasoline stations and restaurants) continued to grow in June and were up 5.1% year-over-year, according to NRF calculations. Most retail segments reported monthly gains, except for clothing and clothing accessories, which reported a decrease, and electronics, which remained flat. > Read more
IMAGE: IStock
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JULY/AUGUST 2016 RETAIL NEWSA Smarter Way to Run a Supply Chain Industry Week- When Tesla Motors CEO Elon Musk proclaims that artificial intelligence is “our biggest existential threat,” it makes headlines worldwide. But what goes unreported is that the very search engines people used to find Musk’s comments are themselves an example of how AI has subtly but forcefully become a part of everyday, real-world life. The prototypical AI-based application is the expert system, which is basically a solution that embodies the knowledge of a human expert, and can make business decisions through a rule-based methodology that taps into that knowledge to mimic the expertise of the human expert. Expert systems are thus able to extrapolate solutions to unforeseen problems, giving them in effect the capacity to learn. In the industrial arena, supply chain planning solutions are AI-based using predictive analytics tools with some form of AI. Predictive analytics is one of the disruptive technologies that will have a dramatic impact on supply chains and the people who run them, according to a recent survey of 900 U.S. supply chain executives conducted by Deloitte Consulting and MHI, a trade association for the material handling and logistics industry. Almost half (44%) of the respondents say that predictive analytics provide a competitive supply chain advantage, especially in today’s era of the “always-on” supply chains, notes Scott Sopher, principal at Deloitte Consulting. > Read more _____________________________________________
Neopanamax Container Ship is Biggest to Visit Port of New York and New Jersey Supply Chain 247- The Port Authority of New York and New Jersey and GCT USA welcomed the MOL Benefactor – the largest container ship ever to call on the Port of New York and New Jersey at GCT Bayonne. Mitsui O.S.K. Lines, Ltd.‘s 10,100 TEU MOL Benefactor docked at the GCT Terminal in Bayonne, NJ on Friday, becoming the largest vessel ever to call the Port of New York and New Jersey. It was the third record marked
by the giant containership since July 1, when it became the first neopanamax ship to make a commercial transit of the expanded Panama Canal. Previously, the largest ship to call on the port was the 10,070 TEU Zim Tianjin in spring 2015, which was also serviced by GCT Bayonne. > Read more_____________________________________________
What to wear to work? Soon, a tiny computer NZ Herald- The wearable technology startups that get attention make products a Silicon Valley executive or journalist might use – fitness trackers, virtual-reality gaming headsets, jewelry that delivers text-message alerts. It’s lifestyle stuff. But wearable development in the near future depends on more workaday equipment. Call them work-wearables: computers worn on the body that help get the job done. Think smart glasses displays for manufacturing workers following complex assembly directions; voice-activated clip-on computers that help store clerks check inventories; or caps with sensors that make sure long-distance truckers aren’t dozing off. Google’s Project Jacquard recently acknowledged the work-wearables market with a partnership to weave conductive yarn into uniforms made by Cintas. Judging from the companies’ talk about health care, hospital scrubs seem a likely first target. > Read more
IMAGE: IStock
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JULY/AUGUST 2016 RETAIL NEWS
Samsung Plans to Boost Spending as S7 Revives Phone Fortunes Industry Week- After ending a two-year smartphone slide with the Galaxy S7, Samsung Electronics Co. could be about to hike capital spending to sustain a revival across the company. At least $5 billion more of investment is headed to the display and semiconductor businesses, according to a survey of analyst estimates, to help Samsung ride out bumps in the phone market. Such a move reflects new optimism about the company after the success of the Galaxy S7, with the shares rallying 13% this year.
> Read more
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Alibaba aims to create closed loop for all consumer needs CNN- Through investments and acquisitions, Alibaba aims to become indispensable to Chinese consumers by matching its online offerings to all needs. Its strategic investments are intended to create a closed
loop of products and services, said Nicole Peng, China director at technology research firm Canalys. “Alibaba is aggressive – they want to literally build an online society to match wherever the consumer is consuming offline,” said Peng
> Read more_____________________________________________
Lazada to lean on new owner Alibaba Bangkok Post- Lazada, Southeast Asia’s largest e-commerce website, will use Alibaba Group’s strength to provide big data and analytic services and help online vendors boost sales after the Chinese e-commerce giant acquired. The move will pave the way for allowing Chinese retailers and manufacturers to sell their products through Lazada’s site. In turn, this will open opportunities to local online retailers to access Alibaba’s online marketplace. Alessandro Piscini, chief executive of Lazada Thailand, said the company will use Alibaba’s big data platform for online merchants to avail themselves of relevant data products and consumer purchasing behavior to create immense value to users.
> Read more
_____________________________________________
Brexit vote brings a bonanza of bargains in South China Morning Post- Chinese consumers are going online in search of bargains from British companies after last week’s Brexit vote, snapping up discounted goods including Burberry trench coats and milk powder. Alibaba’s Tmall has launched a “Brexit Sale” with goods going for as much as 60% off the pre-vote price. “Consumers passionate about buying luxury products always react swiftly to any sharp change in the value of foreign currencies,” said Xiaotang Tang, the co-founder and CEO of NoFashion.cn, a leading Chinese fashion industry news portal. “As the Brexit became the talk of the town, both shoppers and sellers were trying their best to benefit from it.”
> Read more
Retailing in Asia-Pacific
IMAGE: IStock
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JULY/AUGUST 2016 RETAIL NEWS
Autonomous Robots Start European Delivery Industry Week - The next time you order food using the delivery app Just Eat in London, don’t be surprised if it’s brought to your door by a small, six-wheeled robot. London-listed Just Eat Plc. will join German retail chain Metro AG, logistics company Hermes Group, and U.K. food delivery startup Pronto Technology Ltd., in trialing delivery using self-driving robots. Starship Technologies, the company that makes the droids, stated that Just Eat and Pronto will be using the robots in London, while Metro and Hermes will deploy them in Dusseldorf, Germany, and Bern, Switzerland, as well as another undisclosed German city. The little robots, which are designed to operate on sidewalks rather than roads, make deliveries within a two- to three-mile radius. They can carry loads weighing as much as 20 pounds, at speeds of up to 4 mph.
> Read more_____________________________________________
UK retailers see new prospects in Ireland The Irish Times- Major British retailers including Tesco and Marks & Spencer have stores in Ireland, and the pound’s devaluation after last week’s Brexit vote makes those operations more valuable, said economist Conall Mac Coille. UK retailers that price goods in euros in Ireland will initially keep prices high to boost profits and later lower them to gain a competitive edge, he said.
> Read more _____________________________________________
Predictions for India’s online retail growth differ Live Mint- Estimates for the growth of India’s online retail market vary widely, from Morgan Stanley’s forecast that sales will hit almost $120 billion by 2020 to UBS Group’s $48 billion to $60 billion estimate. Rising wages, strong mobile phone sales and improved infrastructure are some of the factors that are expected to drive growth. All the brokerages have cited the same factors that will drive the growth of e-commerce in India. These include the previously mentioned factors as well as rising incomes, uninterrupted flow of capital, shortage of organized retail stores and improvement in e-commerce infrastructure such as logistics and payments. But how fast will these factors combine to drive e-commerce in India? That’s where the differences arise.
> Read more
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Germany’s Villeroy & Boch shifts back into US growth mode North Jersey- German porcelain and china maker Villeroy & Boch will open a US flagship at The Shops at Riverside in New Jersey as it works to revive its US retail presence. The 268-year-old brand operated dozens of stores in America in the 1990s but downsized
Retailing in Europe, India, Middle East, Africa
Delivery Droid | IMAGE: Starship Technologies
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JULY/AUGUST 2016 RETAIL NEWSover the past decade to just three locations. The store, one of only three Villeroy & Boch retail locations in the U.S. allows the company to show consumers a wider assortment of its products than typically found in the fine-china displays at department stores. The Riverside store prominently presents the company’s modern designs and all-white basic lines, as well as creative options such as specially designed pasta platters and barbecue plates, with reservoirs for spoons and sauces. It also sells gift items such as candles, and a selection of dishes and accessories for toddlers.
> Read more
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IMAGE: IStock
Cuba’s Mariel port has ambitious plan to become giant feeder hub JOC - The 54 year old U.S. ban on trade with Cuba is unlikely to be lifted in this election year, but the long awaited policy reversal finally could come to pass after the next Congress and president are sworn in. When the embargo is repealed, plans are in place to transform Cuba’s Mariel container terminal into a major transshipment hub that would serve Gulf of Mexico ports, according to TC Mariel General Director Charles Baker.
> Read more _____________________________________________ US ports likely to spend $9B annually after Panama Canal expansion Construction Equipment Guide- The recent opening of the Panama Canal expansion allows larger ships to reach East Coast ports and is changing the shipping industry across the US and around the world. An industry group expects ports in the US to spend $9 billion a year on renovations to accommodate the larger
ships. The improvements to the canal are not only creating business for the ports, but also some inland cities on the east coast. Greenville is one of many east coast cities creating warehouses and industrial parks. With more cargo coming in for a cheaper rate from Asia, there need be more facilities build to house it. There are now more than 6 million ft. (1.8 million m) of warehouse space under construction in the Greenville region.
> Read more
Retailing in Latin America
Panama Canal | IMAGE: IStock
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JULY/AUGUST 2016 RETAIL NEWS
The fourth biggest retail event isn’t even a holiday CNBC- You could certainly call Jeff Bezos a master of invention. Prime Day brought 179 million visitors to the desktop and mobile sites of the top 25 U.S. retailers last July, according to SimilarWeb. That compares with 216 million on Thanksgiving, 219 million on Cyber Monday, and 248 million on Black Friday. Prime Day’s numbers are all the more impressive in that they occurred in what is typically a slow month for retailers. > Read more
Starbucks Will Start Blocking Some Sites Business Insider- Starbucks is about to start restricting what websites customers can visit while using the free Wi-Fi within the store. “Once we determine that our customers can access our free Wi-Fi in a way that also doesn’t involuntarily block unintended content, we will implement this in our stores,” a Starbucks spokesperson told CNN. Starbucks has decided to implement this policy after years of pressure from Enough is Enough, an organization that promotes Internet safety. Starbucks’ decision comes on the heels of McDonald’s decision to implement a filtered Wi-Fi policy in corporate locations. Other chains that have agreed to filter Wi-Fi include Panera Bread, Subway, and Chick-fil-A. > Read more
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Amazon set to rival NYC’s bookstores with Hudson Yards spot Retailing Today - Amazon is planning to open a brick-and-mortar bookstore and cafe in Manhattan as it pushes deeper into a market it has come to dominate. Amazon Books is slated to open in Hudson Yards, projected to open in late 2018 or early 2019. It would be the first East Coast store planned by the giant e-tailer. The launch store opened last year in an upscale mall in Seattle, the company’s headquarters.
> Read more
Retailing in North America
RKF taps Cesar to strengthen ties with Latin America CSA- Alex Cesar, who had been running JLL’s retail department in Brazil, has been hired by RKF as senior director of its Miami office. “Alex will be a crucial driver of our expansion in South Florida and will strengthen the bridge between the Latin American and U.S. retail markets,” said RKF CEO Robert Futterman in announcing the move. > Read more
Latin America: DIA Argentina in Focus Retail Analysis- DIA is a significant player in the value and proximity space in Argentina and Brazil. Both have been important growth markets for the retailer, which now takes a third of group sales through its Latin American operations. Argentina in particular has emerged recently as a key growth driver for the group, and DIA is one of the fastest growing retailers in the market. Here we explore some of the reasons why.
> Read more
IMAGE: Amazon
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JULY/AUGUST 2016 RETAIL NEWSHalf of Connected Devices in US Homes Are Mobile E-Marketer- Smartphones and tablets account for more than half of internet-connected devices in US households, according to research. That’s in line with an overall trend of dual internet access for the vast majority of users in the country—via both PCs and mobile devices. According to the data, smartphones make up the largest share (37%) of connected devices in the home. Desktops and laptops followed at 28% of the total. > Read more
Crane Worldwide Logistics delivers last mile e-commerce fulfillment solution Crane Staff - Crane Worldwide Logistics is now offering a first of its kind in our industry service to provide final mile logistics solutions to the retailing community, Doorbell™.
>Read more about Doorbell here.
This new service is designed to be included in a total logistics solution for retailers using an in-store order fulfilment and shipping program for their ecommerce operations. Currently, this new service is available in the following cities across the U.S., Australia, and Canada;
• Atlanta,
• Austin,
• Chicago,
• Dallas,
• Houston,
• Los Angeles
• Melbourne (AU),
• San Francisco,
• Seattle,
• Sydney (AU),
• Toronto (CA), and
• Washington D.C
Additionally, this service will be extended to the additional Crane Worldwide Logistics locations across the globe based on customer need. For more details on this new service, please contact Crane Worldwide Logistics.
CWW Retail Logistics Success Story
IMAGE: IStock
CHALLENGING THE NORMWe would love to hear from you. Find contact details for your nearest Crane location
1-888-870-2726 | [email protected]
www.craneww.com
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JULY/AUGUST 2016 RETAIL NEWS
Audit: The formal process of examining how your store performed in relation to plan. All too often, management completes programs but does not review how things went and where improvements can be made for the future.
_____________________________________________Breadth of Assortments: The range or number of different items offered for sale – i.e. wide = many different items, narrow = a limited range of items for sale.
_____________________________________________Campaign: Planned advertising schedule of specific length – usually up to 13 weeks in length.
_____________________________________________Classification / Category: A group of merchandise items that are non-substitutable with another group of items, e.g. tennis racquets would not be substitutable with badminton racquets.
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Classification (Sub Classification) / Category (Sub Category): further breakdown of a classification into a more specific group of items, e.g., men’s short sleeve dress shirts is a sub classification of the main classification of men’s dress shirts.
_____________________________________________Comp Sales: Comparable-store sales are a measurement of productivity in revenue used to compare sales of retail stores that have been open for a year or more. Historical sales data allows retailers to compare this year’s sales in their store to the same period last year.
_____________________________________________Contribution Margin: Contribution margin is the difference between total sales revenue and total variable costs. The term is applied to a product line and is generally expressed as a percentage.
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Retailing Jargon
Facing
The number of identical products (or same SKU) facing out toward the customer. Facings are used in plan-o-grams and when zoning a retail store.
“
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JULY/AUGUST 2016 RETAIL NEWSConversion Rate: The number of people who enter a store divided into the number who made a purchase. Measures the “close” rate that a store achieves on specific foot traffic into the store.
_____________________________________________Cost of Goods Sold: The price paid for the product, plus any additional costs necessary to get the merchandise into inventory and ready for sale, including shipping and handling.
_____________________________________________Core: The base component of a particular aspect of your business, e.g., ‘core customers’ are the 20% who shop regularly and account for 80% of sales. Can also define merchandise that is central to a retailers success, core is product that is never out of stock.
_____________________________________________EAN: The European Article Number which is replacing the North American UPC code. The EAN has thirteen numbers, with one being placed the leading left outside the bar code. The next six numbers are assigned to the manufacturer and the remaining six are for product identification.
_____________________________________________Facing: The number of identical products (or same SKU) facing out toward the customer. Facings are used in plan-o-grams and when zoning a retail store.
_____________________________________________Fixed Position: A guaranteed specific time slot or place for a commercial announcement.
_____________________________________________Gross Margin Percent: The Gross Margin Percent is calculated as follows: Sales – Cost / Sales = Gross Margin Percent.
_____________________________________________Gross Margin Return on Investment (GMROII): Gross Margin Return On Inventory Investment measures the impact of both stock turnover and gross profit. Often calculated to compare vendors or categories of merchandise. The formula is gross profit dollars for the year divided by average inventory at cost. The result is always expressed as a dollar, it answers the question
“For every dollar invested in inventory, how many dollars were returned?”
_____________________________________________Items Per Transaction: Often referred to as “lines per ticket.” A measure of how many items are contained in the average transaction with each customer. The formula is total items sold for the day, week or month, divided by the number of transactions in the day, week or month.
_____________________________________________Loss Leader: Merchandise sold below cost by a retailer in an effort to attract new customers or stimulate other profitable sales.
_____________________________________________Loss Prevention: Loss prevention is the act of reducing the amount of theft and shrinkage within a business.
_____________________________________________Markup: A percentage added to the cost to get the retail selling price.
_____________________________________________Markdown: A planned reduction in the selling price of an item, usually to take effect either within a certain number of days after seasonal merchandise is received or on a specific date.
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