Like most industries, retail, along with the emerging field of retail analytics, has its fair share of inside lingo and, even, buzzwords. In this post, we’ve collected an overview of key terms that decision makers across the retail organization need to know and understand.
Test yourself and see how may retail analytics buzzwords do you know.
Retail Analytics Buzzwords, Defined
Abandonment: The number of visitors (or the percentage of traffic) who exit the store within 30 seconds of entering. Measuring abandonment regulates the traffic count, and high abandonment can be an early warning sign of operational shortcomings.
ATS: An acronym for Average Transaction Size. This metric refers to the average dollar amount that is spent per converting visitor, in a given period. ATS acts a control for the conversion metric, while providing instant insight into the amount of money that buyers spend.
BLE: An acronym for Bluetooth Low Energy. A BLE Beacon, as it’s commonly called, is a small, battery-powered device that emits a Bluetooth Low Energy signal, which can be detected by a smartphone in the BLE Beacon’s vicinity. Based on this interaction, identifying information, such as location, can be acquired.
Cloud: An internet-based computing platform in which processing resources are shared, stored virtually, and easily accessible. Basing IT systems in the cloud boosts scalability and increases infrastructural security.
Conversion: The number of shoppers who make a purchase. This is one of the most important metrics within retail analytics, as it is the number one indicator of a store’s performance.
Endless Aisle: The strategic in-store use of technology (e.g., kiosks) that allows shoppers to browse and even purchase products that are not in stock or not sold in the store. Endless aisles can help to diversify product portfolios and decrease abandonment rates when a customer is searching for only a single item.
IoT: An acronym for the Internet of Things. The increasing number of devices that connect to and transmit data to a network (e.g., the internet) to provide a brand with retail analytics that give insight into customer behavior. Ultimately, the data that’s gathered by these devices will be used to alter experiences in our everyday physical environments.
Location-based marketing: Marketing efforts that typically involve pushing messages to a mobile device to target a specific type of user, based on the user’s location. This sort of marketing tactic can make a customer feel sense of urgency, an “I should take advantage of this offer now” feeling.
mCommerce: Commerce that is conducted from a mobile device. Fun fact: over the past few years, mCommerce sales have risen rapidly and are predicted to outpace desktop sales.
mPOS: An acronym for Mobile Point of Sale. A smartphone, tablet or other wireless device that performs the functions of a cash register or electronic point-of-sale terminal. Equipping associates with mPOS devices can help reduce abandonment rates by preventing long lines.
Multichannel Retailing: Sometimes referred to as omnichannel’s precursor, this approach to retailing refers to selling merchandise through more than one independently managed channel – e.g., brick-and-mortar stores, catalogs, and kiosks.
Omnichannel : An approach to retailing in which the entire retail organization works in concert – from merchandising, to assortment planning, to purchasing, to allocation, and more. This approach significantly reduces inventory costs, while increasing customer service levels at each channel to maximize gross margins.
Pass-by Traffic/Opportunity: The number of people who walk by a storefront. Measuring pass-by traffic tells retailers what their total daily opportunity is, which informs traffic KPIs.
Power hours: The hours throughout the week when traffic is at its highest. Of all of ShopperTrak’s retail analytics, this metric is one that all retailers closely monitor. During these time periods, opportunity for increasing conversion peaks, so it’s imperative that there are more associates on the floor than during any other period.
Programmatic Commerce: When consumers and businesses allow technology to make purchase decisions on their behalf, based on pre-programmed parameters and learned preferences. Some say that this is where the future of retail is headed.
Real-time Inventory: This kind of technology lets retailers know exactly which items are available regionally and when a product is ready to be picked up at the nearest store. Taken to the extreme, this technology tells a shopper the exact location of product, down to the aisle and bin, within a specific store.
RFID: When radio waves are used to track, read, and capture information that lives in a tag that is attached to a piece of merchandise. This technology is at the heart of many real-time inventory solutions.
Sales-Per-Shopper: The number of sales divided by the foot traffic count, during a selected time period. This metric gives insight into to the overall performance of a store, as well as informing the effectiveness of individual associates.
STAR: An acronym for shopper-to-associate-ratio, which is the number of shoppers divided by sales associates that are in a store, at any time. Typically, the lower the STAR, the higher the level of service.
Total Retail: The idea that a brand should work to create a consistent brand story across all platforms — thinking that extends beyond web versus brick-and-mortar.
Traffic: Number of visitors who enter a store. Word of warning: high traffic rates mean nothing, if conversion rates are lacking.
UPT: An acronym for Units per Transaction, which is the number of items that are purchased in a single transaction. This metric is especially useful when analyzing an associates ability to “upsell” a customer.
Wearables: A tech device that can be worn by a consumer. These devices often have small motion sensors, and they sync with other mobile devices. These devices make it easy for a person to be “tracked.”