Category management glossary
31 January 2016Confused by category management jargon? Get to grips with terms and phrases with this comprehensive list of definitions for key category...
Confused by category management jargon? Get to grips with terms and phrases with this comprehensive list of definitions for key category management words.
Term
Also known as
Definition
A
ABC
Activity Based Costing
An accounting method that enables a business to understand more clearly how and where it makes a profit. ABC identifies all major costs associated to relevant activities and then down to product level.
Assortment
Range
A selection of products that are chosen based on a number of attributes (including consumer need, retailer strategy) that maximises efficiency and commercial return within a category or store.
B
Base Depth
The physical distance (usually expressed in mm) between the back and front of the base shelf.
Base Shelf
The lowest shelf of a fixture
Base Sales
Baseline Sales
Those sales of a product that would have occurred had there been no promotional or marketing activity.
Blocking
The grouping of products together within a fixture to produce a clearer display and reduce consumer confusion. Products can be blocked either horizontally or vertically within a fixture.
Brand Blocking
A group of products blocked by brand. E.g. Siting all of Campbell's Condensed Soups together.
Brand Cannibalisation
Brand Switching (See Competitive Steal)
Switching of sales within a brand. E.g. consumers buying 375g Kellogg's Corn Flakes instead of 250g.
Brand Loyalty
Defined as a measure of the expenditure on one brand as a proportion of expenditure by a household on all brands within a category or sub category.
Bulk Stacking
Use of in-store displays to create a visual impact. Bulk stacking can either be part of the normal gondola (e.g. in discount stores) or used as secondary displays, away from the gondola. Bulk stacking is often used to create an impression of value (e.g. special purchases, promotions) and encourage bulk purchasing.
Case Size
The number of products in an outer case.
Category
Products or services grouped together to reflect consumer usage or purchase occasion. For example ‘Household Cleaning’.
Category Decision Tree
Purchase Decision Hierarchy
The order of priority in which shoppers make their purchasing decisions. The hierarchy is usually described like a family tree and details the various product attributes (such as price, flavour, size, brand etc.).
Category Management
CM, Cat Man
The strategic management of product groups through trade partnerships, which aims to maximize sales and profits by satisfying consumer and shopper needs.
Category Strategy
A long term plan of action designed to achieve a particular goal or set of goals or objectives.
Category Tactic
A series of activities deployed to achieve a strategy and objectives.
Category Vision
A category vision is a compelling articulation of a future state based on predicted consumer, shopper or customer drivers that will deliver a step change in the category growth.
Cluster
A group (consumers, stores, locations) that identifies "like" characteristics or attributes. Ranges can be targeted at cluster groups to better meet consumer needs. Stores can be clustered and managed depending on their catchment area.
Competitive Steal
Brand Switching, Brand Cannibalisation
Switching of sales from one brand to another usually as a result of a promotion E.g. consumers purchasing Boddingtons Draught Bitter instead of Tetley Draught Bitter (or vice-versa).
Colour Blocking
Merchandising a group of products by the product colour or packaging colour.
Consumer
The end user of a product. The consumer is not necessarily the same as the shopper, who is the person who buys the product or service. The term customer is often used (by retailers) when referring to the consumer.
Consumer Demand
Consumer Sales
The average daily sales of a product.
Core Range
The products that form the "must stock" range within a store or category. These products offer what is regarded as the "minimum" choice and usually include key brands.
Coverage
Market Coverage
A measurement of range cover - the percentage in either value or volume terms that a given retailer's range covers within a market or sub-sector. For example, retailer X's range accounts for 25% of the complete market's value compared to retailer Y's range accounting for 15%.
Cross Merchandising
The display of a product in a different category to its usual location, due to an associated relationship (e.g. can openers within the canned food section). Cross merchandising assumes there is an element of lateral thinking and shopper logic to the purchase.
Cubic Meter
Cube
The literal shelf space that a three dimensional cube would occupy.
Days on Hand
Days Stock
The average inventory (in units) divided by the average daily movement of the unit.
Depth (of product or tray)
The physical space (usually expressed in mm) measured from the front to the back of a product or tray.
Depth (of range)
Refers to the number of variants/sizes of a product within a range. A deep range may include a large number of product sizes within the same product. Finite in-store shelf space usually necessitates a trade off between ‘depth of range’ versus ‘width of range’.
DPC
Direct Product Cost
A method of assigning all costs of a particular product (manufacturing, distribution, stockholding, handling, store displays etc,) directly to that product.
DPP
Direct Product Profitability
A means of defining the actual profit achieved by a retailer or distributor from an individual product, having taken into consideration direct product costs (see DPC).
Direct Store Delivery
The manufacturer delivers products directly to the retail store and does not go via a retailer distribution centre (RDC).
Distribution
This can be measured as the number of stores that a product is stocked in, or based on total volume sales. The level of distribution can be classified in a number of ways although is usually reported as a % of total market or total stores of a specific retailer.
Dressing the fixture
Enhancing the visual image of a gondola by the use of display material.
Dual Merchandising
The positioning of a product in more than one place in a store, in recognition that it may have more than one use (e.g. tonic water as a soft drink and as a mixer with gin).
Efficient Store Merchandising
Optimisation of space allocation at store level that aims to avoid out of stocks and at the same time maintains minimum stock levels.
EPoS
Electronic Point of Sale
The method of recording store sales by scanning the product bar code at the point of purchase.
Eye Level
The predominant part of the fixture that shoppers look at when purchasing. Research has shown that when a shopper approaches a fixture, natural vision is limited and there is a greater emphasis aimed at eye level. Eye level can change depending on the length of the fixture.
Eye Tracking
A technique that records a shopper’s eye movement as the fixture is scanned. This technique is used for aiding the merchandising of products.
Facing
The physical (linear) space that a single product occupies.
Facings Deep
Units per facing
The number of units placed from front to back in a single position on a fixture.
Finger Space
The distance from the top of a product to the underside of the shelf above.
Footfall
The number of shoppers who pass through a category expressed as a % of total store shoppers.
Frequency of Purchase
How often a product or category is purchased by consumers over a given period of time.
Geodemographic Data
Information which matches geography with consumer demographics (including lifestyle, age, income, social class etc.). Census data is matched with postcodes to produce profiles or classifications of consumers.
Gondola
Fixture Shelving Unit
The physical unit that products are displayed on.
Gondola End
Aisle End Fixture End
The selling space that is located at the end of an aisle. Due to the increased consumer flow around gondola ends, they are often used for promotional or new product display.
Height (of product or tray)
The physical space (usually expressed in mm) measured from the base to the top of a product or tray.
Horizontal Blocking
The grouping of products horizontally along a shelf, e.g. all the products of a certain brand.
Horizontal Facings
The number of horizontal facings of product on a shelf.
Horizontal Space
The horizontal space taken up by products. It usually refers to a particular brand or category segment.
Hot Spot
A position on a shelf or display that generates increased interest, or sales of a product.
Incremental Sales
The additional sales of a product that have happened directly as a result of promotional or marketing activity. Sales over and above Base Sales.
In-Store Theatre
Fixture Display Retailtainment
Relates to any additional display material that enhances and adds excitement to the shopping experience. Usually refers to temporary cardboard or plastic display units, point of sale and signage.
Inventory
Stock Level
The level of stock available. Usually refers to products on the fixture itself, or in the total store when measured as part of demand management. (As opposed to the warehouse or total chain as often used in Supply Chain terminology)
Inventory Value
Stock Value
The monetary value of stock available.
KPI
Key Performance Indicators
Measures that are deemed essential in monitoring the category, e.g. volume sales, gross margin.
Lead Time
Cycle time between order placement and delivery of goods. Lead times are usually expressed in number of days or hours.
Linear Meter
The literal space of one meter of shelving. Often used to compare the space taken up by a particular segment or brand.
Live Image Planogram
A digitised image of the product packaging is shown on the planogram. This helps users to visualise the layout more easily and aids replenishment in store.
Loyalty
Consumers' allegiance to a product, brand, store or image. Loyalty can be measured by the proportion of the total spending made by shoppers (across all outlets) that they spend in the outlet concerned.
Macro Space
Usually refers to total store selling space or category selling space within a store.
Merchandiser
Space Planner, Space Analyst, Field Merchandiser
Confusingly, this term is commonly used to describe three different job functions. 1) Person who plans the use of space at a micro (category and product) level, and often produces planograms. 2) Person who physically replenishes products at a fixture for or on behalf of a retailer, wholesaler or manufacturer. 3) Person working for the retailer at head office who orders and manages stock.
Merchandising
Space Planning
The planning of space at a micro level (category and product). Merchandising involves the allocation of shelf space and physical layout of product within a specific category or gondola.
Micro Space
Reference to in-store space by category or sub-category.
Module
Mod Bay
A specific length of space occupied by shelving or equivalent e.g. chiller cabinets. The actual length may vary by retailer / wholesaler.
Nesting
Term used for products or display trays that rest partially inside each other when they are stocked on a shelf.
Optimum Shelf Capacity
Calculating the amount of stock to hold on the shelf (or fixture) to meet consumer demand, whilst minimising stock levels.
Orientation
Front orientation, Side orientation
The side of a product that normally faces the shopper when the product is positioned on the shelf.
Out of Stock
Stock out, Off sale
In demand management, the term usually refers to when a product is unavailable at the shelf. (As opposed to supply chain terminology where it can refer to any given point in the supply chain, e.g. supplier distribution centre, retailer distribution centre, store).
Outer Case
Traded Unit
The packaging unit in which the product is delivered from the manufacturer to the retailer. This may contain an inner tray as well.
Overhang
The distance that products can hang over the sides of a fixture.
Overlap
Where products overlap on a fixture. Some space management software systems can allow for overlap between products when merchandising them on a planogram. Used more often for hanging products.
Pallet
Euro Pallet
A flat, open surface constructed of wood or plastic that is designed to hold and transport product. Sometimes used in-store to display high volume products.
Pegboard
A vertical board with regularly spaced holes for attaching pegs that display hanging product on a gondola (e.g. bagged sweets).
Planogram
A visual representation of the fixture layout that aids communication, planning and replenishment of products in store. It shows the position of every product within a fixture, shelf heights, length of fixture and fixture adjacencies.
PoS
Point of Sale
This can have two meanings. The most literal is its use as reference to the physical location where a product or service is displayed for sale (e.g. shelf, gondola end. checkout). Secondly PoS is used in reference to communication material (e.g. of promotional offers) that is displayed at the point of sale.
Portrait
Reference to the way in which a product or point of sale material is displayed. Portrait, as in the picture, is with the shortest edges running horizontally to the shelf.
Pre Purchase
Usually refers to the time frame immediately prior to the purchase; this could be in minutes or hours. Pre purchase is most often referred to in relation to decisions made about what or when to purchase a product.
Range Change
The process of changing the level of distribution of a product or range. This can cover introduction of new lines, deletion of existing lines or the increase or decrease in the number of stores in which a product or range is stocked. In general, range changes are usually made during a range cycle.
Range Cycle
A period in time during which a product or range can be introduced into or deleted from a store.
Range Management
The dual process of deciding which products to list within a category and in which stores these products should be listed. This is a complex process utilising market, retailer, supplier, consumer and shopper information.
Regional Ranging
The process of deciding which geographic region(s) a product or range should be listed in. This can be a complex process utilising product, sales and consumer information to aid the decision.
Re-merchandising
The process of relaying a fixture. Fixtures are normally re-merchandised to accommodate new lines, remove deleted lines and reflect shopper purchasing behaviour.
Retail Ready Packaging (RRP)
Shelf Ready Packaging (SRP), Display Ready Packaging (DRP), Replenishment Ready Packaging (RRP), Infrastructure Based Packaging (IBP)
Packaging that makes it easy for staff to recognise brand, product type or variant that is easy to open and can be merchandised on to shelf in 'one touch' movement (faster than decanting each unit). It provides 'at a glance' identification of category and brand with unimpeded access to the shopper and is straightforward to dismantle and recycle.
Rod
Bracket
Equipment used to support hanging products from a gondola (e.g. bagged sweets).
Safety Stock
The stock which serves to offset the effect of differences between average consumer demand and actual consumer demand, e.g. the extra stock needed for peak periods of demand such as Saturday trading. It also allows for variations in delivery times.
Segmentation
Sub-groups
The clustering of products within a category into discrete groups on the basis of consumer need, product form, shopper behaviour etc.
Service Level
The extent to which demand is met by availability of product. Usually expressed as a percentage and can be measured at a number of points in the supply chain (e.g. service level to a retail store from the retailer’s depot).
Shelf Bracket
Equipment which is used to support a shelf on the gondola.
Shelf Depth
The physical distance between the back and front of the shelf.
Shelf Edge Label
SEL
A label that identifies the adjacent product on shelf. It usually contains the product description, selling price (and price per unit e.g. $ per kg), store order code, units per case.
Shelf Elasticity
The measurement of the impact on a product’s sales performance by moving its position either vertically or horizontally within a fixture.
Shelf Talker
PoS Shelf Barker
A communication mechanic, usually in the form of a printed message or image on a cardboard rectangle, that is used to highlight a number of messages to the consumer (e.g. promotional offer, new product, product information etc.)
Shelving
The shelf, attached to the gondola, which is used to display product.
Shopper
The person who visits a store to purchase a product or service. The shopper is not necessarily the consumer (i.e. the end user).
Shopper Mission
A specific reason a shopper has gone to a particular store/outlet.
Sign Posts
Category Sign Posts
The product(s) that shoppers highly associate with a particular category, e.g. Coca-Cola in the Non-Alcoholic Drinks category. These products are often positioned to help consumers navigate the store.
Slope
The number of degrees a shelf or other display equipment slants up or down from the horizontal axis.
Space Elasticity
The measurement of the impact on a product's sales performance by increasing or decreasing its allocation of space within a fixture.
Space Management
The allocation and control of in-store space. This can be at a macro level, such as department (e.g. Non Food) or category (e.g. Health & Beauty). It can also be at a micro level relating to products within a category.
Space Management Software
Planogram Software
Computer software that replicates gondolas and products diagrammatically. By utilising product information such as size, case size and rate of sale, these systems are used to aid range and merchandising decisions.
Space Race
A phrase applied to the submission of plans within a retailer (usually at department or category level) to justify space requirements for the future, to ensure suitable allocation of in-store space in relation to the market place.
SKU
Stock Keeping Unit, Unit, Product Item
A uniquely identifiable line within a product range. A particular product may have many variations (e.g. 20% extra free), each of which would be a unique SKU.
Sub Category
A smaller subset within a category. For example, Coffee within the Hot Drinks category.
Tailored Ranging
A process of understanding which products are bought by specific groups of consumers (could be based on demographics, or location), then tailoring the range to meet their needs. Tailoring can also apply to promotions (e.g. targeting a promotion at a specific consumer group).
Traffic Flow
Customer Flow, Shopper Flow
The direction that a shopper walks around the store, often used to aid merchandising decisions (e.g. which product should be ‘first in flow’).
Tray
The use of a tray (usually cardboard or plastic) to display a product. This reduces the amount of handling required but impacts on the shelf space as trays usually occupy more than one facing.
Understock
Calculation that determines if a product does not have enough stock on shelf to meet consumer demand, in relation to replenishment schedules.
Vertical Blocking
The grouping of products in a vertical line across a number of shelves.
Vertical Facings
The number of facings of a product stacked on top of one another
Visual Merchandising
The layout of products based on the image they create; how they are ‘viewed’ by the shopper.
Weight of Purchase
A statistical measure of how much of a product is purchased by shoppers over a given period of time.
Width (of product or tray)
The physical space (usually expressed in mm) measured across the front of a product or tray.
Width (of range)
Refers to the variety of products and brands within a range. Finite in-store shelf space usually necessitates a trade off between ‘width of range’ versus ‘depth of range’.