Category: Knowledge Base

What is Price Elasticity of Demand (PED)? Price elasticity of demand (PED) quantifies how the quantity demanded of a product changes in response to price variations.  Price Elasticity of Demand formula: The formula for calculating price elasticity of demand is:                     

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? A planogram is a visual schematic that maps exactly where products should be placed within a retail store. It guides shelf layout, display positioning, and product groupings to maximize sales and improve the shopper experience. Why it matters Retail space is limited. Where a product sits

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