What is GMROI? The Gross Margin Return On Investment (GMROI) is a key metric that calculates a retailer’s gross profit generated for the amount of money they invested in their average inventory holdings. In general, a higher GMROI is better, as it indicates that the inventory is turning into profit efficiently, helping retailers optimize
What is a planogram? In retail, a planogram is a schematic model used by brick-and-mortar stores. Planograms create a visual representation of the store’s product placement based on where they may sell the best and where they might have a bigger chance to trigger the shopper’s intention to make a
What is Inventory Turnover Ratio? Inventory Turnover Ratio (ITR), often referred to as Stock Turnover Ratio, is a financial ratio that shows how effectively a company is managing its inventory, measuring how many times it can sell and replace its entire inventory in a given period of time (typically a
What is retail cannibalization? Retail cannibalization is when a customer trades between similar products. This can be driven by many factors like the introduction of a new product, promotional incentivization, better product placement, etc. For example, a new yogurt flavor is introduced, and the store notices record sales for this
What is a halo effect? A halo effect is when a product causes a consumer to purchase another product by affecting their trust in a certain product or brand, perception of quality, and even their association with the product/brand. For example, a retailer, let’s call it “Terra Organic”, is known
What is a sales lift? Sales lift is a crucial metric for evaluating the impact of a promotion on sales. It measures the percentage increase in sales during the promotion compared to a baseline period, providing a clear view of how effective your promotion has been. Why sales lift matters Tracking sales lift helps
Definition Markdown optimization is the process of strategically reducing prices to maximize sales, minimize inventory waste, and protect profit margins. Most often, the goal of markdown optimization is to help clear out slow-moving or seasonal items while keeping margins intact. By timing discounts perfectly, it ensures products sell before their
What is omnichannel retail? Omnichannel retail integrates all sales and marketing channels—stores, websites, apps, and social media—to create a seamless shopping experience. It ensures customers can browse, buy, and engage effortlessly across all touchpoints. Retail businesses that adopt this strategy provide a unified experience that meets customer expectations at every
Retailers face the ongoing challenge of moving products while maintaining profitability. Two common strategies for driving sales are markdowns and promotions, but knowing when to use each can make or break a promotional campaign. Here’s a simple breakdown: Markdowns: Clearing the path for new inventory Markdowns involve permanently reducing the price of an
Definition A retail promotion calendar is a strategic tool for planning and managing promotions throughout the year. By aligning promotions with key dates, such as holidays and seasonal events, it helps retailers deliver timely offers that engage customers. This calendar not only schedules promotions but plays a crucial role in effective promotion management,
