Retail Operations Flashcards

A retailer tracks that 30% of customers who enter the store make a purchase. This metric is called the:

Answer: Conversion rate

Conversion rate measures the percentage of store visitors who complete a purchase, making it a key indicator of sales floor effectiveness.

Which of the following best describes omnichannel retailing?

Answer: Providing a seamless and integrated customer experience across all channels

Omnichannel retailing integrates all customer touchpoints — online, mobile, and in-store — into a seamless, unified shopping experience.

What does 'FIFO' stand for and why is it important in retail stock rotation?

Answer: First In, First Out — ensures older stock is sold before newer stock

FIFO (First In, First Out) means oldest inventory is sold first, preventing spoilage and obsolescence in perishable and date-sensitive products.

A store manager wants to evaluate whether a promotion was profitable. Which calculation should be used?

Answer: Incremental sales generated minus the cost of the promotion

Promotional profitability is measured by comparing the incremental revenue driven by the promotion against all promotion-related costs.

Which document formally outlines the terms agreed upon between a retailer and a vendor, including payment terms, return policies, and allowances?

Answer: Trading partner agreement

A trading partner agreement (or vendor agreement) is the master contract that defines all terms of the commercial relationship between retailer and supplier.

A retailer uses demographic data to stock different product assortments in stores located in different neighborhoods. This strategy is called:

Answer: Micro-merchandising

Micro-merchandising tailors store assortments to the specific demographics and preferences of the local customer base around each store location.

In retail, what is the primary function of an electronic article surveillance (EAS) system?

Answer: Deterring and detecting shoplifting through security tags on merchandise

EAS systems use security tags or labels that trigger alarms at store exits if not deactivated at purchase, serving as a shoplifting deterrent.