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Small Business

Retail Dictionary: Over 40 terms everybody in retail must know

If you are working in retail industry, or just thinking about to start, you may be discouraged by all the strange lingo and terminology that you never heard of. Or you kind of know it, but you are not sure. Do not worry any more. In this article we have selected over 40 terms that will get you familiar with all the concepts of classic or modern retailing.

1. Anchor store

Probably the biggest retail store in the mall or shopping center. It can also be the most famous brand store in the mall. Because of the high volume of customers that such stores attract they are increasing overall number of customers that visit the mall, increasing the number of customers for other retailers in the same mall. Because of that they often have special deals with the mall owners such as low rent, free facility management or similar. Such stores also attract other, smaller retailers to lease a space in the mall, which are hoping for increased foot traffic. Because of that anchor stores are sometimes called anchor tenant or draw tenant stores.

2. Average Transaction Value

Average Transaction Value or AVT is average money amount that customer spend for each purchase. The goal is, of course, to increase ATV, which can be done by influencing customers to buy more products or to buy more expensive items.

3. Augmented reality

Augmented reality or AR adds or combines physical world with virtual objects. Just remember Pokemons all around you in Pokemon Go game. In retail setting AR can be used to show the customer the catalogues or to give the customer info about the product when he points his phone at the product. There is even a possibility for customer to try clothes without using fitting room and trying the item, using only camera and software.

4. Bar code

Bar code is a set of black and white bars, representing alpha – numeric code. It is machine readable and is most often used to represent universal product code (UPC). Using bar code and machine readers retailers can quickly track inventory going in or out of the store.

5. Beacons

Beacons are devices that can recognise and transmit data to other, Bluetooth connected devices such as mobile phones or tablets. In retail you can used them to send tailored messages their customers’ mobile phones. So, if a customer comes back to the previously visited retail store retailer can send them special offers, alerts, or similar messages, based on previous purchases. Beacons are also used to collect different data about customer behaviour such are the time spend in the store, number of customers, most visited parts of the store and so on. Such data can be later used for analytics.

6. Big Box Store

Big box store is, like a name says, big store placed in a box shaped building. It is a usually part of big national chain.

7. Big data

Big data is just that: a massive set of data contained in a database. For analyse of such set you would probably need data scientist or special software. In retail setting is used mostly in marketing to analyse customer demographic and behaviour.

8. Brick and click

Brick and click is a term for retailers which are using and combining both brick and mortar and online stores. When properly integrated brick and click solutions offer easy web to store services, such as buying online and pick up in stores.

9. Bulk

Originally, term bulk was used for commodities such as sugar, salt, coal etc. In retail setting the most usual meaning is buying large quantities of some item (buying in bulk) and selling those items individually.

10. Bundle pricing

Bundle pricing is when retailer offers lower price for buying two or more items together then he would charge each of those items separately.

11. Cashwrap

Cashwrap is the area where customers are paying for their bought products. This is an area where all the cash registers and POS terminals are located.

12. Chargeback

Chargeback occur in situations when customer disputes some transaction on their credit card and retailer must reverse transaction, thus giving the money back to the customer.

13. Click and collect

Click and collect occurs when customers buy the product online and then pick it up in the store. It is a win- win situation for both customer and retailer because of the lower costs and even convenience, when comparing with delivering the item.

14. Clienteling

Building a relationship between customer and retailer by offering personalized offer experience. It is usually done by using Customer relationship management software. Next time you get special offer from some store on your birthday think of Clienteling.

15. Cloud POS

Cloud POS is Internet based Point of sale solution which offer retailer the possibility to collect payments online, without using local servers or other solutions.

16. Contactless payments

Contactless payments are done by using NFC and that allows customers to pay without touching the paying terminal. Payments are made by waving or tapping credit or debit cards or by mobile phones.

17. Cost of goods sold (COGS)

COGS are costs that represent the total value of sold products. Except the purchase price from your supplier COGS also includes costs such as transport, storage, salaries, etc. which are allocated to every product using different accounting principles.

18. Customer relationship management – CRM

CRM is a marketing software solution for collecting and storing data about the customers, as well as for delivering specialized offers to those customers.

19. Cross – merchandising

It is a retail practice of putting connected products from different categories into one selling space or shelf to increase additional purchasing. For example, if you are in a wine section and see wine glasses or wine openers next to the actual bottles of wine that is cross – merchandising.

20. Dead inventory

Sometimes also called dead stock, dead inventory is part of your inventory that is selling very slowly or is not selling at all. It can be because the product is seasonal, or the price is to high.

21. Drop Shipping

Drop shipping is heavily used in online sales and allows the retailers to sell products without holding inventory. When retailer gets and order it passes on to his supplier and pays his price. Supplier then send the purchased item directly to the customer.

22. Electronic Point of Sale – EPOS

In its most essential form is a combination of hardware and software designed for recording your sales. More advanced EPOS solution line www.octopos.com can also help retailers to track inventory, generate reports and drive marketing actions.

23. E-tailing

Another term for e-commerce. Selling your merchandise online.

24. FIFO (FEFO)

FIFO is abbreviation for First in First out. It is an accounting practice that assumes that first units of stock sold are the ones that are sitting on the stock the longest.

FEFO is abbreviation for First Expired First Out. It is inventory management technique that prioritize selling the items that have the shortest expiry date.

25. Flash sales

Marketing technique of selling products with huge discounts for a limited, often very short, time frame. Time frame can be from several hours to couple of days. If it last for one day only sometimes is called daily deals. Flash sales can be very effective in dealing with the dead inventory.

26. Green retailing

Any action from retailers that promotes more eco-friendly practices. These can be sourcing products from local suppliers, switching to re-usable packaging, using energy from renewable sources and similar.

27. High speed retail

Actions by retailers to speed up purchasing experience for the customer. The most common way to do that is getting the products closer to the customers using pop-up stores, mobile stores, food trucks. For such retailing reliable mobile POS solution like Octopos is very important.

28. Integrated Supply Chain

Integrated Supply Chain is a close network of different business and their business systems. For example, every time you sold some product your inventory management system sends an automatic order to your supplier for the same product. It gets much more complicated than that when you put distributors, shipping companies, manufacturers etc. in the mix.

29. Inventory management

Usually a software solution for tracking inventory. It can be a simple spreadsheet if the retailer is stocking only few products, but progress of retailing is asking for more advanced solutions. Inventory management can be a software solution on its own or can be a part of POS solution. Good inventory management system must provide info about every product such as: how many items are in stock, what is the location of every item, recommendations for minimum and maximum stock level etc.

30. Layavay (or Lay By)

Layaway is a deal between retailer and the customer in which customer pays for the product in instalments and pick up the item from the seller once the full item price is paid. After receiving the first instalment the seller is obligated to hold the item for the customer.

31. Lead time

Lead time is time frame from sending a purchasing order to the supplier until receiving the purchased item.

32. Leveraged buy out

Is practice of buying a company with borrowed money using companies’ assets as a collateral. Borrowed money is then repaid using company’s own cashflow.

33. Loss leader

Loss leader is an item that retailer is selling at a loss in hope of increasing foot traffic and attracting more customers into the store. The idea is that once customers are inside, they will also buy other products, which will offset the loss of the loss leader.

34. MOQ

MOQ is short for Minimum Order Quantity, or the smallest number of pieces the supplier is willing to sell with standard terms of sale. Some suppliers will go below MOQ but will ask for additional surcharge.

35. Mystery shopping

The practice of sending “undercover” customer to the store to review the product, service, or compliance to some rules. Mystery shoppers can be hired by other companies, consumer protection groups or even the management of retail stores.

36. PCI compliance

It is a requirement from major credit card companies to process and store cardholder data according to their rules. For getting PCI compliance retailer must pay PCI compliance fee, or that fee can be included when paying for their POS software.

37. Planogram

Planogram is a photo, or a drawing of how certain items should be put on store shelves to get more attention and sales. Most of the suppliers are constantly launching new products or are paying to get extra shelf space, so the planograms are constantly changing.

38. PLU number

PLU or Price look up number. It is a system that shows price and other info about the product when PLU number is entered or scanned into the POS software.

39. POS System

POS or Point of sale system is a software solution for running your whole retail business. It’s handling everything from ordering the products, across the marketing actions and inventory management, to the final sale of the product, tracking payments and new ordering. Quality POS system should incorporate both store sales and e-commerce.

40. Private label

Private label is a brand owned by the retailer, and not by manufacturer. Manufacturer only acts as a subcontractor in producing items branded and owned by retailer.

41. Shrinkage

Shrinkage is negative difference of a stock you have in your inventory management system and actual stock you have in your stores and warehouses. The name comes from “legit” loss of stock quantity such as rotting of fruits and vegetables, evaporation of water etc. But most shrinkage today comes from the mistakes in inventory management and thefts by customers or employees. User friendly Inventory Management System and increased security are ways to avoid shrinkage.

42. Stock Keeping Unit (SKU)

SKU is short for Stock keeping Unit and it is a every unique product that retailer is selling. SKU represents all the individual characteristics of a product, including name, brand, packaging type etc.

43. Stock keeping unit number

SKU number is an individual alpha numeric code for every SKU. SKU number is not same as a bar code or UPC, but it is designed by the retailer in a way that is meaningful to him.

Categories
Small Business

Shoplifting in Business – Minimize Risk and Prevent Profit Loss

Shoplifting has affected business’s bottom lines as the early days of commerce. For very small companies who frequently walk a thin line of profit, shoplifting becomes an even more prominent issue. With inventory shrinkage numbers topping $50 billion in the United States, it stands to reason that one of the most important tasks of independent shops like yours is preventing inventory shrinkage and theft.

As an independent retail store, coffee shop, or restaurant, you undoubtedly experience issues with customers trying to avoid paying on a frequent basis. In a regular store setting, this may involve unscrupulous people tucking product into their pockets or purses. They may also change price tags to pay a lower amount for a more expensive item. In an eatery, thieves dine and dash or make off with everything from coffee mugs to condiments.

In these digital days, the concept of shoplifting and theft extends to your point of sale inventory management and payment processing hardware and software. You can lose profits through cybercrime, credit card fraud, and errors and issues created by an out of date or inefficient POS system. The high-tech cash register or other point of sale system you use will identify discrepancies in inventory and revenue immediately so you can take decisive action against theft. Mobile systems allow shop workers to walk around and prevent sneaky behavior.

The absolute best way to protect your business from this type of inventory and profit loss is to recognize the signs of shoplifting and minimize the opportunities for thieves to get their hands on your goods.

Look Out for These Signs of Shoplifting in Business

Before learning how to identify telltale signs that someone may steal from you, it is of the utmost importance for you to recognize any internal biases and get rid of them. Retail criminals are not a specific race, gender, age, or from a socioeconomic group. Instead of profiling, pay attention to behaviors that often go along with shoplifting.

Remember Past Troublemakers

As a very small independent shop or eatery, you have the right to refuse service to anyone. If someone has stolen from you before or has attempted to and you caught them, post their photo or other identifying information near your point of sale system, cash register, and in the break room. You should get an image of them from your security camera system. Make sure that all employees know they are not allowed to come into the store anymore and are banned from the premises.

While you may be willing to give people a second chance in your everyday life, you cannot take risks with the profitability of a business you own.

Customers With Unusual Behaviors

The average shopper or person stopping in for lunch at your café pays attention to the products of interest or the menu. They glance around with interest from time to time, but generally focus on what they want to buy or the meal they have in front of them. The only time they will look at shop assistants or waitstaff is when they want service directly. Of course, as a quality business, your employees will provide excellent customer service.

People who intend to steal something or get away without paying for their meal focus on staff more than necessary. Instead of looking at a rack of T-shirts, for example, they will shift their gaze to see where the retail associates are standing and if anyone is paying attention to them.

Other unusual behaviors that may reveal a shoplifter include spending excess time in the restroom, dressing rooms, near the exits, or in any one particular part of the store that does not offer enough interest to warrant the time. For example, if a person at a clothing boutique spends 15 minutes looking at a small rack of plain T-shirts, it still insists they do not need help, your suspicions may arise.

Bags, Bulky Clothing, and Other Tools of Theft

Long or fluffy coats are normal to see in the depth of winter, but if someone enters your establishment wearing one in warm weather, keep an eye out for things disappearing underneath it. People who shop at multiple stores may carry in bags, but your suspicion should grow when someone with a backpack or huge handbag displays other odd behaviors.

You cannot notice a utility knife or small scissor in a pocket use to snip off price tags or security sensors. It is difficult to spot the bolt of a piece of jewelry in an ordinary pocket or purse. However, you may prevent some shoplifting if you keep a close eye on the ones who make it more obvious.

Any Attempt to Distract Attention

Shoplifters frequently travel in groups. One or two people will cause a distraction while another tucks merchandise into their pockets or bag. This process may involve spreading out to the store to divide your attention, asking questions or complaining about a minor issue, or actively creating a point to focus by knocking things off a shelf or spilling their drink all over the restaurant table.

Seasoned shoplifters have perfected these techniques so unaware salespeople or waitstaff will not even notice anything wrong. After all, if someone in the store approaches you ask for help, you want to give excellent customer service every time. It is difficult to do so while still paying attention to someone else on the other side of the store.

How to Minimize Shoplifting Risks

Now that you recognize things to look out for, you need a strong plan and a robust POS system to help you minimize inventory loss and decreased revenues and profits. Prevention matters more than your response in many cases. After all, if someone does steal an item off your shelf, you cannot chase them down through the streets and make a citizen’s arrest. While you should report crimes like this, the chance of a relatively simple shoplifting case resulting in a conviction is quite slim.

Therefore, it is up to you and your trusted employees to stop shoplifters before they have the opportunity to ruin your profit margin. These methods will help you succeed with your small business.

Effective Employee Training

As most of the shoplifting indications are visual or behavioral, it is important to train all your employees to take notice of how people act when they walk into the shop, if they linger excessively, carry large bags, or attempt to create distractions. You can instruct them in quality customer service techniques that reduce the opportunity for thieves to grab something or run out the door without paying. Shoplifters want to avoid attention, so simply asking if they need help with anything can frequently stop their plans.

Always make sure your employees know about any repeat offenders by pointing out their photos or other information. However, also ensure they understand that they should never confront or physically try to restrain anyone who is shoplifting or suspicious. Their safety matters more than your profits.

Point of Sale Inventory Management

An old-fashioned cash register may add a touch of vintage style to your shop or restaurant, but it will not provide the information you need to keep track of inventory and revenue. Modern systems benefit businesses in numerous ways, but one of the most important involves real-time knowledge of potential theft. With a few taps on the screen, you can determine if your revenue matches your inventory levels. If not, you may have an issue with shoplifting.

Point of sale systems also minimize the chance of loss due to employee theft, mismanagement, and things like credit card fraud. Unfortunately, all of these problems plague businesses of all sizes. When it comes to ensuring long-term profitability, data collection and analysis can help you transform how you approach everyday business and keep things more secure.

Security Systems and Video Cameras

Although a top-of-the-line security system complete with continuous use video surveillance may cost too much to consider for a young small business, it does provide a lot of protection against shoplifting and other issues. Sometimes, the presence of visible cameras and signs that state the premises are protected by security are enough to deter would-be thieves.

In most cases, these are useful after the fact to catch and prosecute criminals. Also, they let you get still pictures of the troublemakers you can post by the checkout counter or in the break room. Without video proof, it is very difficult to get the police department to do anything to get your merchandise back or arrest the shoplifters.

Merchandise Tracking Tags

Another way to stop shoplifting directly is to use those clamped merchandise alarm tags or what is called electronic article surveillance (EAS). You need to attach one to every product you want to protect. This coincides with sensors at the exits so if a shoplifter tries to take a product out of the store, and alarm goes off. Unfortunately, many savvy thieves find ways around these types of systems. Some even have the tools to remove them hidden in their pockets. Others use small blades to cut the fabric or packaging to remove the tracking tags.

What to Do If You Spot a Shoplifter?

For everyone’s safety, the most important thing to do if you spot a suspicious person or someone actively shoplifting is to keep your distance and engage in a safe manner. When you hire employees, also teach them these response techniques to minimize not only the chance of danger but also possible legal issues going forward.

The first step in the process is always to practice good observational skills and figure out what is really happening before you move in and contact the person directly. Remember not to let your biases affect your judgment. Instead, look for nervous behavior, avoiding eye contact, lingering your exit doors or in hidden places in the shop or restaurant, and other behaviors mentioned above. If you are still suspicious that the person may be up to no good, follow the steps below.

1 – Take a Customer Service Approach

Approach the person in question as you would anyone else in your small retail store, coffee shop, diner, or other business. Smile and ask if you can help them with anything. Sometimes, an approach that lets them know you notice them is enough to stop a potential theft.

However, remember that not all shoplifters work alone. While you are assisting one person, remain aware of the other people in the area and what they might do. In the case of professional thieves, the group working together will enter your business at different times and not interact with each other at all to throw you off their trail.

2 – Use Your POS Mobile Unit as a Tool

If the suspicious person is holding a piece of merchandise or sitting down at the counter to get a cup of coffee or meal, bring your point of sale tablet or other mobile gadget with you to engage them further in the customer service activities. Talk about what they are holding and show them options on the screen if you have that type of inventory management. You may even offer to check them out right there under the guise of saving them time and offering more convenience.

3 – Ask Questions Instead of Making Accusations

When you start out with a simple, “Is there anything I can help you with today?” Or whatever customer service questions you tell your employees to ask, it may disarm the thief and stop them from their plans. However, experienced shoplifters may respond calmly and simply delay their attempts until you seem satisfied with their answers and leave them alone again.

If you strongly feel like the person has already shoplifted something, ask more pointed questions like, “Can I help you check out those products you’re holding?” If you own a restaurant or a service-related business, and a person attempts to leave without paying, it makes perfect sense to redirect them to the POS with a friendly comment about processing their payment.

In most cases, it is an awfully bad idea to boldly approach the thief and accuse him of stealing directly. Make sure your employees know that you do not expect them to do this ever. Although you may be tempted to restrain shoplifters verbally or even physically, this can escalate the problem and increase the chance of violence or property damage.

4 – Let Them Go and Contact the Authorities

If you decide to accuse them directly, stay calm and simply state something like, “The security video recorded you putting an item into your bag. Could you please come to the office with me?” The mention of video surveillance may convince them to cooperate. The calm question may help defuse the situation.

Any sign of aggravated emotions or a physical response that either puts your establishment or other people in danger needs immediate de-escalation. Step back, let go, disengage, and let the shoplifter leave. It is better to experience inventory loss than injury. Call the authorities, hand over the videotape and your statement, and leave everything to them.

Every state has its own shoplifting laws. They may include theft or larceny charges but are generally considered misdemeanors unless the thief makes off with exceptionally expensive merchandise or has repeated charges against them. If you have security footage and a quality police force, the chance of the criminal getting in trouble increases. The chance of merchandise recovery is unfortunately slim. In some places, it is possible to bring civil charges against the thief for monetary compensation. This is especially true if the person also damaged your property during the commitment of the crime.

Unfortunately, inventory loss and the associated profit loss due to theft happens for every retail business out there. No matter how well you train your employees, what security alarms and cameras you install, and the point of sale system you use, you will not be able to catch every shoplifter. However, making wise choices can greatly minimize the money you lose every year.

Besides paying attention and discouraging suspicious behavior through quality customer service practices, your POS hardware and software is one of the most important tools you have in the fight against shoplifting. You need information about your inventory and revenue updated in real time, so you always know exactly where your business stands. This helps you identify potential issues and minimize the risks going forward.

Categories
Small Business

How to Find Reliable Employees: A Guide For Small Business Owners

Running a small business isn’t easy. While CEOs of large companies have enough employees and funds to get by, small business owners like you must don several hats to get things done. From playing accountant to marketing head to recruiting manager, you end up doing many things by yourself. However, with the economy opening up and consumer demand slowly rising, you’ve perhaps reached a point where to grow and remain competitive, you’ll need to onboard some helping hands. Yet, even as your business slowly recovers from the pandemic, another large obstacle looms ahead: finding workers. 

The Crunch is Real!

According to the data released by the Bureau of Labor Statistics, there were 9.3 million job openings in the US at the end of April. This was also the second time in a row that the labor market saw a record number of job openings in addition to a relatively high quit rate of 2.7%. 

The National Federation of Independent Business (NFIB) also reported that nearly half of America’s small businesses couldn’t find workers. Additionally, about a third of people who quit their jobs in April were retail workers, as reported by the Job Openings and Labor Turnover Survey. One of the primary reasons for this attrition was perhaps the reluctance on employers’ part to pay more and cut down their profits that sent employees on a lookout for greener (better paying) pastures. To prevent this attrition, 34% of small business owners reported raising compensation in the NFIB survey, and 22% said they plan to raise compensation in the next few months. Yet, finding qualified employees remained problematic for 93% of small business owners looking to hire employees. Additionally, over a fourth of business owners cited labor quality as their top business concern. 

Surprisingly, this labor shortage exists despite a high unemployment rate in the country.  This also means people are looking for work but perhaps they’re not finding suitable conditions to work, which is keeping them on the sidelines. By understanding the reasons behind the labor shortage, you can improve your hiring process to find reliable and qualified employees for your small business. 

Reuters shared six reasons why people are still staying out of the job market: 

  • Parents, especially mothers, are unable to work because of closures or shortened hours at schools and daycare.
  • Many workers are fearful of returning to work owing to health risks.
  • Stock market gains have given older workers the cushion to retire.
  • Younger workers are finding jobs in other fields, which has shrunk the labor pool for the industries they have left behind. 
  • Many employers need to fill jobs requiring skills that sidelined workers may not have.
  • Some employers have also complained that enhanced unemployment benefits and other government aid are keeping workers on the sidelines.

The expiration of various unemployment benefits is going to bring the workers back into the market, as is widely believed by experts. Yet, some workers are likely to continue feeling fear and mistrust, which might keep them away from actively seeking work. Some individuals may also be anxious about returning to their desks after working remotely for more than a year.

Happy Employee makes customer happy!

Tips to Find & Retain Qualified Employees For Your Small Business

Now that you know what’s driving the demand-supply gap for workers, here’s what you can do to find and recruit the people you need to keep your small business running profitably.

1. Offer Higher Wages

Many employers, especially restaurants, are offering signing bonuses to people who’ve been unemployed for a while. While this is a good move for attracting workers who are in immediate need of money, offering to pay them more than the minimum wage standards can be a better hook. Even a few additional dollars over the minimum wage rate can make employees feel valued and consider your job offer more seriously.

2. Make Arrangements To Get Women Back to Work

Women have been particularly hit by the pandemic, with one-in-four thinking of leaving the workforce or scaling down their careers. Working mothers with small children have been worst affected as they must remain home due to childcare and at-home learning requirements. According to experts, this situation is expected to ease up as schools start reopening in September. In the interim, you can make your job offer more lucrative by offering flexible work arrangements or childcare benefits that will enable women to return to work.  

3. Build A Solid Employee Benefits Plan

In these uncertain times, providing your employees with high-quality benefits like life, medical and dental coverage can help attract good and reliable workers to fill your vacant positions. You can also consider giving employment guarantees to your new workers to relieve their anxiety. The massive lay-offs and pay cuts of the past year have led workers to distrust their employers. Giving no-layoff guarantees to your new hires, perhaps after a compulsory probation period, can boost performance and loyalty both. 

4. Create A Safer Workplace

Many workers are reluctant to return to in-person jobs for the fear of contracting COVID. Thankfully, you can invest in various technologies to create a safer workplace, which is an important criterion for workers looking for jobs. For grocery store and retail store owners, this could mean putting in place systems that make it safer for employees to carry out their daily business. We are all aware that grocery and retail store workers were some of the most overworked people during the peak of the pandemic as they kept the shelves stocked and lines moving. By integrating hardware like Octopos, you can improve your employee and customer experience by accepting payments through any mode with a contactless payment terminal that keeps things sanitary and moving swiftly.

The Bottomline

It’s a fact that worker shortage is slowing the recovery of small businesses post-pandemic. As a small business owner, it’s time for you to get creative once again and offer prospective employees something they will find hard to refuse. Clearly, it’s going to take more than just money to fill up the vacant spots in your business. Besides higher salaries, advertising flexible work arrangements, job guarantees, and other possible incentives will increase your chances of finding good and reliable employees in these challenging times.