When I started my online store back in 2007, quickly followed by my first physical store 6 months later, I was a fish out of water. I didn’t know my POS from my SOH. I had not come from a corporate job in a big retail company, I had been working as a PA and later in an events company. But I knew what my vision was and I was passionate about my new craft, so I learnt the rest along the way.
Fake it to make it as they say!!
If, like I was, you are just starting out with your first foot into owning a retail business, here are some of the terminologies you will come across as you grow, so you can talk like a seasoned retailer!
Footfall– the number of people (ie potential buyers) walking into your store.
P.O.S (or EPOS) – point of sale – a computer software system used to make sales, capture client information, run your inventory and lots more. Look for cloud based ones now that offer a whole heap of extra features.
Omni-channel– when you have both a physical store and an online store and perhaps also sell via your social media. Multi platforms for selling that all integrate with each other. It’s what every retailer needs to have these days.
Visual Merchandising– how you lay out your products and make your displays in-store, including your windows.
ATV– average transaction value – a very useful statistic to know. Perhaps you think on average customers are spending 100 dollars each time but in reality the average is 30 because you have many small cheaper accessories that bring down the average. A great way to look at increasing your store sales is to work on increasing your ATV.
SOH– stock on hand. The total cost and quantities of stock in your inventory.
Product Variants – Features that distinguish your products – be it colour, size or styles for example.
Brick and Mortar – a physical store rather than online.
Cross Merchandising – this is when you put the same product in various places within your store. For example, you can merchandise by category and by brand.
Dead stock / inventory – inventory items that you just can’t seem to sell, even at discount. It’s better to bundle them free with other products or discount them ridiculously low to move them. You need the space and the money to buy other things that will sell.
Shrinkage – the difference between what your inventory says you should have and what you actually have in your inventory. It can happen due to miscounting, employee theft, customer theft or perhaps errors in the delivery from the suppliers. Have procedures in place to eliminate these risks.
As a small store owner, you should be thinking like the larger retailers do. Take time to learn this industry, what is new, what competitors are doing and continue to evolve your store. Whether you have 1 or 200 stores, you are still a retailer and profitability is not guaranteed, you have to work for it.