Retail
Retail is the sale of goods or services to the end consumer for personal, non-commercial use. It differs from wholesale, which involves selling to commercial intermediaries. Retail encompasses physical stores, e-commerce, direct selling, and omnichannel. According to Eurostat retail trade statistics, retail is a significant contributor to GDP across EU member states.
COGS (Cost of Goods Sold)
COGS is the direct cost of purchasing or producing the goods sold in a given period. It includes the purchase price, inbound freight costs, and customs duties. It does not include operating costs such as rent, commercial staff, or marketing. Gross Margin = Revenue − COGS.
OOS (Out of Stock)
OOS indicates the condition in which a product is absent from available inventory. It causes lost sales, customer dissatisfaction, and potential market share loss. The OOS rate is a critical supply chain KPI: high values indicate demand forecasting problems or reorder management issues.
Fill Rate
Fill rate is the percentage of customer orders fully satisfied from warehouse stock at the time of the order. A 95% fill rate means 5% of orders require backorders or substitution. It is a key indicator of supply chain performance.
Planogram Compliance
Planogram compliance measures the degree to which store staff follow the planogram. It is monitored through periodic audits, increasingly supported by computer vision technology. High compliance ensures visibility of high-margin products and correct implementation of category management strategies.
MFC (Micro Fulfilment Centre)
An MFC is a small, typically automated fulfilment centre located within or near a store. It enables combining a physical store presence with the efficiency of automated online order fulfilment. Grocery retailers use them to reduce delivery times and last mile costs.
OSA (On-Shelf Availability)
OSA measures the percentage of time a product is available and visible on the shelf when customers are looking for it. It differs from on-hand availability because a product can be in the backroom but not yet restocked on the shelf. It is inferred from POS data: an abnormal sales drop for a SKU may indicate a shelf gap.
ECR (Efficient Consumer Response)
ECR is a collaborative framework between retailers and manufacturers that optimises the FMCG supply chain, reducing costs and improving product availability. It includes sell-out driven order management (Continuous Replenishment Programme, CRP), collaborative category management, and safety stock reduction across the supply chain.
VMI (Vendor Managed Inventory)
In the VMI model, the supplier manages and replenishes inventory at the retailer based on agreed sell-out data and stock level targets. It reduces manual ordering and minimises stockouts but requires sharing of inventory data with the supplier.
EDI (Electronic Data Interchange)
EDI is the electronic exchange of structured commercial documents - purchase orders, confirmations, invoices, shipping notices - between retailers and suppliers following predefined standards (EDIFACT, X12). It automates ordering and invoicing processes, reducing manual errors and processing times. EDI remains the standard in modern grocery trade, increasingly integrated with REST APIs for digital-native players.
PIM (Product Information Management)
A PIM system centralises all product information - descriptions, images, technical specifications, prices, translations - in a single repository. Data is then distributed to all sales channels (e-commerce, catalogue, ERP, marketplace) ensuring consistency and accuracy.
OMS (Order Management System)
An OMS manages the entire order lifecycle: receipt, validation, routing, inventory allocation, shipment coordination, and tracking. In an omnichannel context, an OMS must handle orders from heterogeneous channels and allocate them to the most cost-effective inventory node.
WMS (Warehouse Management System)
A WMS manages internal warehouse operations: receiving, put-away, picking, packing, and shipping. It optimises picking routes, manages product locations, coordinates staff, and tracks all goods movements. A modern WMS integrates robotic automation systems and bidirectional interfaces with the OMS and ERP.
POS (Point of Sale)
POS is the hardware and software system that manages the sales transaction at the till: product scanning, total calculation, payment processing, and receipt printing. Modern POS systems are integrated with inventory, loyalty programmes, and ERP systems.
EAN / GTIN
The EAN (European Article Number) or GTIN (Global Trade Item Number) is the international barcode that uniquely identifies a commercial product. The GS1 system assigns company prefixes. EAN is the global standard for product identification in retail, read by POS systems and WMS for inventory management.
SRP (Suggested Retail Price)
SRP is the selling price suggested by the manufacturer or distributor. It is not binding for the retailer (except under specific agreements) but serves as a reference for price positioning. Brands monitor SRP compliance through price intelligence tools to protect their market positioning.
Basket Size
Basket size is the average number of items purchased in a single transaction. Increasing it is a key objective of merchandising, cross-sell promotions, and store layout. Basket size and ATV are the two components of revenue per transaction that retailers seek to maximise.
Dwell Time
Dwell time is the average time a customer spends in a store or a specific section. Measured via Wi-Fi, Bluetooth, or video analytics, it correlates with purchase probability: higher dwell time in an area tends to produce higher sales. Used to optimise layout and product displays.
LTV (Lifetime Value)
LTV in retail is the expected total value of a customer over the course of their relationship with the retailer. It is the basis for customer acquisition investment decisions (Customer Acquisition Cost, CAC): an LTV:CAC ≥ 3 is considered sustainable for most retail models.
Markdown Optimisation
Markdown optimisation is the analytical process for determining the optimal timing and depth of price reductions to maximise total revenue over a product's selling season. Optimisation algorithms consider current sell-through rate, weeks remaining to end of season, price elasticity of demand, and minimum margin constraints.
Space Productivity
Space productivity measures the revenue generated per square metre or per linear metre of shelf space. It is one of the fundamental metrics for assessing the efficiency of physical stores and making decisions on assortment, layout, and space allocation.
Return Rate
Return rate is the percentage of products sold that are returned. It is a fundamental KPI for profitability in fashion and consumer electronics. It is monitored by SKU, category, channel, and period. Analysis of return reasons guides corrective action.
Chargeback
A chargeback is a customer dispute of a credit or debit card charge, resulting in the reversal of payment by the bank. In retail, chargebacks are caused by fraud, unauthorised transactions, or disputes over undelivered or non-conforming products. High chargeback rates lead to additional costs and risk of merchant account suspension.
Dark Store
A dark store is a warehouse or distribution centre configured like a store (racking, aisles) but closed to the public, dedicated exclusively to picking online orders. Compared to picking in an open store, the dark store significantly improves picker productivity (no conflicts with shoppers, layout optimised for picking routes) and allows processing of high order volumes in dense urban areas. It is the enabling infrastructure for quick commerce (15–30 minute delivery).
BOPIS Cancellation Rate
BOPIS cancellation rate measures the percentage of Buy Online Pick Up In Store orders that are cancelled due to inventory unavailability at the designated store after the order was placed. This KPI directly reflects inventory accuracy and the reliability of the real-time per-store availability data shown to customers. A target below 2% is typically achievable with robust inventory synchronisation between POS and OMS.