CRA Fundamentals & Core Concepts 2 — Questions and Answers
Question 1: Which retail metric measures the percentage of store visitors who make a purchase?
- Conversion rate (Correct answer)
- Sell-through rate
- Basket penetration
- Traffic index
Correct answer: Conversion rate
Conversion rate is calculated as the number of transactions divided by the number of visitors to the store.
Question 2: In retail analytics, 'dead stock' refers to inventory that:
- Has been damaged during transit
- Has not sold within a defined period and is unlikely to sell (Correct answer)
- Is reserved for seasonal promotions
- Has been marked down below cost
Correct answer: Has not sold within a defined period and is unlikely to sell
Dead stock (also called obsolete inventory) ties up capital and shelf space without generating revenue.
Question 3: What does the term 'planogram' refer to in retail operations?
- A financial forecast for seasonal merchandise
- A visual diagram specifying product placement on shelves (Correct answer)
- A store traffic heat map
- A supplier delivery schedule
Correct answer: A visual diagram specifying product placement on shelves
A planogram is a schematic drawing that details how and where products should be placed on retail shelves to maximize sales.
Question 4: The 'halo effect' in retail analytics describes a situation where:
- A promotional discount increases overall basket size
- A promoted item drives incremental sales of related non-promoted items (Correct answer)
- A loyalty member spends more than an average customer
- A store's layout influences dwell time
Correct answer: A promoted item drives incremental sales of related non-promoted items
The halo effect occurs when promoting one product positively impacts sales of complementary or adjacent products.
Question 5: Which of the following best describes 'omnichannel retailing'?
- Selling exclusively through a single dominant channel
- Integrating multiple sales channels to deliver a seamless customer experience (Correct answer)
- Maintaining separate inventory pools for online and in-store
- Focusing marketing spend on the highest-traffic channel only
Correct answer: Integrating multiple sales channels to deliver a seamless customer experience
Omnichannel retailing integrates physical stores, e-commerce, mobile, and other channels so customers experience a unified brand journey.
Question 6: A retailer's 'shrinkage' most commonly results from which combination of causes?
- Markdowns and overstock
- Employee theft, shoplifting, vendor fraud, and administrative errors (Correct answer)
- Seasonal demand fluctuations and poor forecasting
- High return rates and damaged goods
Correct answer: Employee theft, shoplifting, vendor fraud, and administrative errors
Retail shrinkage is the loss of inventory due to theft (internal and external), vendor fraud, and paperwork errors.
Question 7: When analysts refer to a retailer's 'assortment breadth,' they mean:
- The number of units held per SKU
- The total number of distinct product categories carried (Correct answer)
- The price range from lowest to highest SKU
- The depth of inventory for a single category
Correct answer: The total number of distinct product categories carried
Assortment breadth refers to the number of different product categories or lines a retailer offers, as opposed to depth which is the number of options within a category.
CRA Fundamentals & Core Concepts 2
Which retail metric measures the percentage of store visitors who make a purchase?