Retail Technology Glossary

Automated bundling refers to the process of automatically grouping together multiple items to display together, often on a PDP. It involves using technological systems or software to streamline and automate the bundling process, reducing the need for manual labor and increasing efficiency.

Automated bundling systems often utilize advanced algorithms to identify and sort items based on predefined criteria such as size, shape, or SKU (stock keeping unit) information. It is most often utilized with home goods or other non-apparel retailers, bundling allows complementary products to be displayed together on the PDP, increasing average order value, as customers are more likely to purchase multiple items when displayed together. With bundling software, eCommerce websites can present customers with pre-defined or customizable bundles that provide value, convenience, and an enhanced shopping experience. This software facilitates the management of product combinations, pricing, inventory, and promotion of bundled offerings.

By implementing automated bundling, companies can achieve several benefits, including increased average order value, decreased labor time, and improved customer experience.

Automated Outfitting refers to the process of utilizing technological systems and algorithms to create outfits on PDPs, based on a core product. By leveraging data analysis, machine learning, and artificial intelligence, Automated Outfitting systems consider factors inventory, product categories, color schemes, and a number of other customized rules to generate ensembles.

Automated Outfitting aims to enhance the shopping experience, save time, and provide fashion inspiration by harnessing the power of technology to curate stylish and cohesive outfits effortlessly.

Automation is the utilization of technology, software, or mechanical systems to carry out tasks or processes that were previously performed by humans, enabling them to be executed automatically or with minimal human intervention. By streamlining and simplifying repetitive or time-consuming activities, automation enhances efficiency, accuracy, and productivity while reducing labor costs and human error. It encompasses a wide range of tools and technologies, from simple rule-based actions to advanced robotic systems and artificial intelligence algorithms, and finds application in various industries to optimize workflows and allocate human resources to more strategic endeavors.

Overall, automation enables organizations to achieve higher operational effectiveness and scalability by leveraging technology to perform tasks that were traditionally done manually.

Average Basket Size refers to a key metric used in the retail industry to measure the average value or quantity of items purchased by customers in a single transaction. It represents the average amount spent or number of products added to a shopping cart during a specific period, typically calculated by dividing the total sales revenue or total number of items sold by the number of transactions. The average basket size provides valuable insights into customer behavior, purchasing patterns, and overall sales performance. Retailers analyze this metric to understand customer preferences, optimize pricing strategies, identify cross-selling or upselling opportunities, and improve overall revenue generation.

By monitoring and optimizing average basket size, retailers can effectively evaluate and enhance their sales strategies to maximize profitability and customer satisfaction.

Average Inventory Cost refers to the average value of all the goods and products held in a company's inventory over a specific period. It is calculated by dividing the total cost of inventory (including the cost of purchasing or producing the goods and any associated expenses) by the number of items or units in stock. This metric provides insights into the financial investment tied up in maintaining inventory levels. By analyzing the average inventory cost, businesses can evaluate the efficiency of their inventory management and assess the impact of holding inventory on their overall profitability. It helps in making informed decisions regarding stock replenishment, pricing strategies, and optimizing supply chain operations.

Monitoring and managing average inventory cost is crucial for businesses to control expenses, minimize holding costs, and ensure sufficient stock availability to meet customer demand while maximizing profitability.

Average Order Value (AOV) refers to a metric used in the retail industry to determine the average amount of money spent by customers in a single transaction. It is calculated by dividing the total revenue generated from all orders within a specific time period by the total number of orders. AOV provides valuable insights into customer purchasing behavior, indicating the typical expenditure per transaction. Retailers analyze AOV to evaluate the effectiveness of their sales strategies, pricing models, and promotional campaigns. By monitoring and optimizing AOV, businesses can identify opportunities for upselling or cross-selling, tailor their marketing efforts, and improve overall revenue generation.

Increasing the average order value can result in higher profitability and improved customer lifetime value, making it an important metric for businesses aiming to optimize their sales performance.

Average Transaction Size (ATS) is a metric used in the retail industry to measure the average value or quantity of products purchased by customers in a single transaction. It represents the average amount spent or the number of items sold per transaction during a specific period. ATS is calculated by dividing the total sales revenue or the total number of items sold by the number of transactions. This metric provides insights into customer buying behavior and helps retailers understand the typical purchase size or quantity. By analyzing ATS, businesses can assess the effectiveness of their pricing strategies, promotional campaigns, and product assortment. Monitoring and optimizing ATS allows retailers to identify opportunities for upselling, cross-selling, or bundling, and adjust their sales tactics to increase the average transaction size.

Ultimately, improving ATS can contribute to higher revenue and profitability for retail businesses.

Average Transaction Value (ATV) is a metric used in the retail industry to measure the average monetary value of transactions conducted by customers during a specific period. It is calculated by dividing the total sales revenue generated by the total number of transactions. ATV provides insights into the average spending per transaction and helps businesses understand customer purchasing patterns. By analyzing ATV, retailers can evaluate the effectiveness of their pricing strategies, promotional efforts, and cross-selling or upselling initiatives. Monitoring and optimizing ATV allows businesses to identify opportunities to increase transaction value, such as offering complementary products or incentives for larger purchases. Increasing ATV can lead to higher revenue and profitability, as well as enhanced customer lifetime value.

ATV is a valuable metric for retailers aiming to improve their sales performance and maximize the value derived from each transaction.

Big Data refers to the massive volumes of structured, semi-structured, and unstructured data generated at a rapid pace from various sources, characterized by its three dimensions: Volume, Velocity, and Variety. This data cannot be efficiently processed using traditional methods and requires advanced technologies and analytics tools to uncover valuable insights and patterns.

By analyzing Big Data, organizations can enhance decision-making, optimize operations, and gain competitive advantages by identifying trends, correlations, and predictive insights.

Brick and Click is a business model that combines both physical brick-and-mortar stores and online e-commerce channels. It represents a hybrid approach where retailers have a presence in both the offline and online realms. In the Brick and Click model, customers have the option to shop in-store or make purchases through the retailer's website or mobile app. This approach offers the convenience of online shopping along with the tactile experience and immediate gratification of traditional retail. Retailers adopting the Brick and Click model aim to cater to the evolving needs and preferences of customers who seek a seamless and omnichannel shopping experience. By integrating physical and digital channels, businesses can reach a wider customer base, provide flexibility in shopping options, and offer services like click-and-collect, where customers can buy online and pick up their purchases in-store.

The Brick and Click model allows retailers to leverage the strengths of both online and offline retail to enhance customer satisfaction, increase sales, and stay competitive in a rapidly evolving retail landscape.

Bundling software for an eCommerce website refers to a tool or functionality that enables online retailers to display products bundled together, often displayed on the PDP. Most often utilized with home goods or other non-apparel retailers, bundling allows complementary products to be displayed together on the PDP, increasing average order value, as customers are more likely to purchase multiple items when displayed together. With bundling software, eCommerce websites can present customers with pre-defined or customizable bundles that provide value, convenience, and an enhanced shopping experience. This software facilitates the management of product combinations, pricing, inventory, and promotion of bundled offerings.

By leveraging bundling software, eCommerce businesses can increase sales, encourage upselling, and cross-selling by showcasing complementary or related products together.

Carrying cost, also known as holding cost, refers to the expenses incurred by a business for storing and maintaining inventory over a certain period of time. It encompasses various costs associated with inventory management, including warehousing, storage space, insurance, handling, depreciation, obsolescence, and financing. Carrying costs are incurred from the moment inventory is acquired or produced until it is sold or consumed. These costs are directly influenced by factors such as the value of inventory, the length of time it is held, and the efficiency of inventory management practices. Effectively managing carrying costs is crucial for businesses to optimize inventory levels, minimize holding expenses, and maximize profitability.

By analyzing and reducing carrying costs, organizations can improve cash flow, minimize inventory holding periods, and enhance overall operational efficiency.

Click Through Rate (CTR) is a metric used in digital marketing to measure the percentage of users who click on a specific link, advertisement, or call-to-action out of the total number of users who view it. CTR is calculated by dividing the number of clicks by the number of impressions or views, and then multiplying the result by 100 to express it as a percentage. It is commonly used to assess the effectiveness and relevance of online advertisements, email campaigns, search engine results, and other digital marketing initiatives. A higher CTR indicates that a larger proportion of users found the content engaging and took action, while a lower CTR suggests that the content may need optimization to attract more clicks.

CTR is a valuable metric for marketers to evaluate the performance and impact of their digital marketing efforts and make data-driven decisions to optimize campaigns and drive higher engagement and conversion rates.

Clienteling is a customer relationship management (CRM) strategy employed by businesses, particularly in the retail industry, to foster personalized and long-term relationships with individual customers. It involves the use of data and technology to collect and analyze customer information, preferences, and purchase history, allowing sales associates or representatives to provide tailored and exceptional customer experiences. Through clienteling, businesses can anticipate customer needs, offer personalized product recommendations, provide individualized assistance, and deliver targeted marketing and promotional communications. This strategy aims to build customer loyalty, enhance customer satisfaction, and increase sales by creating a personalized and memorable shopping journey.

By utilizing clienteling techniques, businesses can establish strong connections with their customers, foster trust and loyalty, and gain a competitive edge in a highly competitive marketplace.

Conversion refers to a desired action taken by a user or customer in response to a marketing campaign or online interaction. It represents the moment when a visitor or prospect completes a specific goal, such as making a purchase, submitting a form, signing up for a newsletter, or downloading a resource. In the context of digital marketing, conversion is a key metric that measures the effectiveness of marketing efforts in turning potential customers into actual customers or leads. The conversion rate is calculated by dividing the number of conversions by the total number of visitors or interactions, expressed as a percentage. Higher conversion rates indicate successful marketing strategies, compelling offers, and optimized user experiences, while lower conversion rates may indicate the need for improvement in messaging, design, or targeting.

Tracking and optimizing conversions allows businesses to evaluate the performance of their marketing campaigns, make data-driven decisions, and drive desired outcomes, ultimately contributing to business growth and success.

Conversion Rate (CVR) is a metric used in digital marketing to measure the percentage of website visitors or users who complete a desired action or conversion goal out of the total number of visitors. It is calculated by dividing the number of conversions by the total number of visitors, and then multiplying the result by 100 to express it as a percentage. Conversions can vary depending on the specific goal, such as making a purchase, filling out a form, subscribing to a service, or downloading a resource. A higher conversion rate indicates a more effective and engaging user experience, compelling call-to-actions, and successful marketing efforts, while a lower conversion rate suggests areas for improvement in messaging, design, or targeting. Monitoring and optimizing conversion rates allow businesses to assess the effectiveness of their marketing campaigns, make data-driven decisions, and drive better outcomes, ultimately increasing customer acquisition, revenue, and overall business success.

Conversion Rate Optimization (CRO) is the practice of systematically improving the conversion rate of a website, landing page, or digital marketing campaign through data-driven analysis and optimization techniques. It involves the continuous process of identifying areas of improvement, conducting experiments, and making strategic changes to enhance user experience and drive higher conversion rates. CRO utilizes various methods such as A/B testing, user behavior analysis, heat mapping, and user feedback to gather insights and identify barriers or friction points that prevent users from completing desired actions. By implementing targeted optimizations, such as improving website design, streamlining the checkout process, optimizing call-to-action placement, or refining messaging, businesses aim to increase the percentage of visitors who convert into customers or achieve specific goals.

Conversion Rate Optimization allows businesses to maximize the effectiveness of their digital assets, improve marketing ROI, and ultimately enhance business growth and profitability.

Cross Merchandising refers to a retail strategy where complementary or related products from different categories are strategically displayed or promoted together to encourage additional purchases and increase sales. It involves placing products that are typically purchased together or have a logical connection in close proximity or in a visually appealing manner. The goal of cross merchandising is to enhance customer convenience and stimulate impulse buying. By showcasing related items side by side or through bundling or outfitting, retailers can leverage the association between products to entice customers to explore additional options and make complementary purchases.

An effective cross merchandising strategy encourages customers to discover new products, increases average order value, and enhances the overall shopping experience.

Customer Experience (CX) refers to the overall perception and interaction a customer has with a company or brand throughout their entire journey, encompassing all touchpoints and interactions across various channels and platforms. It encompasses every aspect of the customer's interaction, from initial awareness and discovery to purchase, post-purchase support, and ongoing engagement. Customer Experience focuses on meeting and exceeding customer expectations by delivering seamless, personalized, and meaningful interactions that create positive emotions and satisfaction. It involves factors such as ease of navigation, responsiveness, product quality, customer service, brand consistency, and the ability to address customer needs and preferences. A great customer experience builds trust, loyalty, and advocacy, leading to customer retention, repeat business, and positive word-of-mouth.

Businesses strive to optimize Customer Experience by understanding customer journeys, gathering feedback, analyzing data, and continuously improving interactions to create delightful and memorable experiences that differentiate them in the marketplace and foster long-term customer relationships.

Customer Lifetime Value (CLV), also known as Customer LTV (Lifetime Value), refers to the predicted net profit a business expects to generate from a customer over the entire duration of their relationship. It represents the long-term value a customer brings to a company by taking into account their purchasing patterns, frequency, average order value, and the duration of their engagement with the business. CLV is an essential metric for businesses to assess the financial worth of acquiring and retaining customers. By calculating CLV, companies can make informed decisions regarding customer acquisition costs, marketing investments, and customer retention strategies. A higher CLV indicates a more profitable customer who contributes significantly to the business's revenue and bottom line.

By understanding and maximizing CLV, businesses can focus on nurturing and retaining high-value customers, fostering customer loyalty, and implementing targeted strategies to increase customer satisfaction and lifetime value.

Dead stock refers to inventory or merchandise that has remained unsold and unused for a prolonged period, often becoming obsolete or irrelevant to current market demand. It represents products that have lost their commercial value and are unlikely to be sold in the future. Dead stock ties up valuable resources such as storage space, capital, and potentially incurs additional costs related to holding, maintaining, or disposing of the inventory. Retailers and businesses strive to minimize dead stock by closely monitoring sales trends, managing inventory levels, implementing effective demand forecasting, and making timely adjustments to pricing, promotions, or product assortment.
By mitigating dead stock, businesses can optimize inventory turnover, reduce financial losses, and create space for more profitable products, ensuring a healthier and more efficient supply chain.

Digital Merchandising refers to the strategic presentation, promotion, and optimization of products or services in the online or digital retail environment. It involves the use of various digital platforms, such as websites, mobile apps, and social media, to create visually appealing and engaging product displays, organize product categories, and enhance the overall online shopping experience. Digital merchandising encompasses techniques such as product imaging, product descriptions, pricing, cross-selling, upselling, and personalization to attract and guide customers towards making a purchase. It also involves utilizing data and analytics to understand customer behavior, preferences, and browsing patterns, enabling businesses to tailor their digital merchandising strategies for targeted marketing and improved conversion rates.

The goal of digital merchandising is to optimize product visibility, encourage exploration and discovery, increase customer engagement, and ultimately drive online sales and customer satisfaction.

Discounting, also known as discount pricing, refers to the practice of offering reduced prices or markdowns on products or services compared to their original or regular selling price. It is a promotional strategy employed by businesses to incentivize customers to make purchases by providing them with cost savings or perceived value. Discounting can take various forms, such as percentage-based discounts, buy-one-get-one (BOGO) offers, seasonal sales, clearance sales, or promotional codes. The objective of discounting is to attract customers, stimulate demand, increase sales volume, and potentially gain a competitive advantage in the market. While discounting can generate short-term revenue and attract price-conscious customers, it is essential for businesses to carefully consider the impact on profit margins, brand image, and long-term customer behavior.

Effective discounting strategies involve thoughtful planning, targeted audience segmentation, clear communication of the discounted pricing, and aligning discounts with business objectives to maximize the benefits while maintaining profitability.

Dynamic pricing refers to the practice of adjusting product or service prices in real-time based on various factors such as demand, supply, market conditions, customer behavior, and competitive landscape. It involves the use of algorithms, data analysis, and automation to determine optimal pricing strategies for maximizing revenue and profitability. Dynamic pricing enables businesses to respond dynamically to changing market dynamics and customer preferences by setting prices that are flexible and responsive to fluctuations in demand and supply. This pricing approach can be applied across various industries, including e-commerce, travel, hospitality, and ride-sharing, among others. By leveraging dynamic pricing, businesses can optimize revenue by charging higher prices during periods of high demand or low inventory, while offering lower prices during periods of low demand or excess inventory.

The goal of dynamic pricing is to achieve the right balance between customer value, competitive positioning, and business objectives, ultimately maximizing revenue and improving overall market performance.

E-Tailing, also known as electronic retailing or online retailing, refers to the practice of selling products or services directly to consumers through digital platforms, primarily over the internet. It involves the process of showcasing and promoting products or services on eCommerce websites, mobile applications, or other online channels, allowing customers to browse, select, and make purchases from the convenience of their own devices. E-Tailing eliminates the need for physical stores and enables businesses to reach a global audience, offering a wide range of products, competitive pricing, and convenient shopping experiences. This digital retail model encompasses various aspects such as product catalog management, secure online payments, order fulfillment, and customer service.

E-Tailing has transformed the retail industry by providing customers with an extensive selection of products, ease of comparison, and the convenience of doorstep delivery. It has revolutionized the way consumers shop and has become an integral part of the modern retail landscape.

eCommerce refers to online buying and selling conducted over the internet, allowing businesses and individuals to purchase products and services, make secure payments, and engage in digital transactions. It has revolutionized the way businesses operate, offering global reach, streamlined operations, and personalized shopping experiences in the digital realm.

eCommerce personalization tools are software or technologies that enable online businesses to tailor and customize the shopping experience for individual customers. These tools utilize data analysis, algorithms, and user behavior tracking to deliver personalized content, product recommendations, pricing, and promotions based on each customer's preferences, browsing history, demographics, and purchase patterns. By leveraging these tools, businesses can create a more engaging and relevant shopping environment, providing customers with a sense of exclusivity and personalized attention. eCommerce personalization tools facilitate dynamic website or app content, personalized emails, targeted advertisements, and customized product offerings to enhance customer satisfaction, increase conversions, and foster long-term customer loyalty.

The aim is to create a unique and personalized shopping journey that meets the specific needs and preferences of each individual customer, ultimately driving customer engagement, boosting sales, and maximizing the overall success of the eCommerce business.

eCommerce product recommendations play a vital role in enhancing the online shopping experience for customers. By analyzing a customer's browsing behavior, purchase history, and preferences — product suggestions are generated to help shoppers discover relevant and appealing items. These recommendations, powered by sophisticated algorithms and data analysis, provide valuable guidance by presenting products that align with a customer's interests.

Ultimately, eCommerce product recommendations aim to increase customer engagement, drive conversions, and foster customer satisfaction by delivering a curated selection of products that resonate with each individual shopper.

A forecast refers to an estimation or prediction of future events or outcomes based on available data, trends, and analysis. It involves using historical information, statistical models, and other relevant factors to project or anticipate future conditions, such as sales, demand, market trends, or financial performance. Forecasts are utilized in various fields, including business, economics, weather, and sports, among others, to make informed decisions and plans. By examining past patterns and applying statistical techniques, forecasts provide insights into potential future scenarios, enabling businesses and individuals to allocate resources, set goals, and make strategic decisions. The accuracy of a forecast depends on the quality of data, the validity of assumptions, and the precision of the forecasting techniques employed.

Forecasting plays a crucial role in planning, risk management, and performance evaluation, allowing organizations to navigate uncertainties and seize opportunities proactively.

Influencer marketing is a marketing strategy that involves collaborating with influential individuals, known as influencers, to promote products, services, or brands to their dedicated and engaged audience. Influencers are individuals who have established credibility and a significant following in specific niches or industries, typically on social media platforms such as Instagram, YouTube, or TikTok. Through influencer marketing, businesses harness the influencers' reach, authenticity, and influence to create brand awareness, drive product recommendations, and engage with potential customers. Influencers may feature or endorse products through sponsored posts, product reviews, giveaways, or brand partnerships. The aim of influencer marketing is to leverage the influencers' influence and connection with their audience to generate brand awareness, trust, and ultimately drive consumer purchasing decisions.

This form of marketing allows businesses to reach their target audience in a more authentic and relatable way, tapping into the influencers' influence and building a positive brand association.

Inspirational Commerce refers to a retail concept that aims to evoke emotions, spark creativity, and inspire customers throughout their shopping journey. It goes beyond traditional transactional experiences by creating a captivating and immersive environment that encourages customers to explore, discover, and connect with products and brands in a meaningful way. Inspirational Commerce combines elements of storytelling, visual merchandising, experiential marketing, and personalized engagement to create a unique and memorable shopping experience. It seeks to ignite customers' imagination, align with their values, and evoke a sense of inspiration or aspiration. Retailers implementing Inspirational Commerce may incorporate elements such as curated product displays, interactive showcases, multimedia content, sensory experiences, and personalized recommendations to create an emotional connection with customers and foster brand loyalty.

By focusing on the emotional aspect of the shopping experience, Inspirational Commerce aims to create a positive and lasting impression, driving customer engagement, and ultimately influencing purchasing decisions.

Integrated Supply Chain refers to a collaborative and interconnected approach to managing the flow of goods, information, and resources across the entire supply chain network, from suppliers to manufacturers to distributors and ultimately to customers. It involves seamless coordination, communication, and integration of various stakeholders and processes involved in the supply chain to optimize efficiency, responsiveness, and customer satisfaction. Integrated Supply Chain encompasses activities such as procurement, production planning, inventory management, logistics, and distribution, all working in sync to ensure smooth operations and timely delivery of products or services. This approach emphasizes the sharing of real-time information, adopting advanced technologies, and fostering strong relationships and partnerships among supply chain participants. By integrating processes, systems, and data across the supply chain, businesses can enhance visibility, reduce costs, minimize lead times, mitigate risks, and enhance overall operational performance.

Integrated Supply Chain facilitates end-to-end visibility, collaboration, and agility, allowing businesses to adapt to market changes, meet customer demands, and gain a competitive edge in today's dynamic and fast-paced business environment.