Like any other industry, category management is full of jargon. To excel as a professional in the field, it’s crucial to understand the key terms used in the industry. Let’s explore five important acronyms that every category management professional should be familiar with.
1. EDLP = Everyday Low Price
Everyday Low Price is a pricing strategy that focuses on offering consistently low prices to customers. This approach aims to create customer loyalty by eliminating the need for frequent sales and promotions. By adopting an EDLP strategy, retailers can attract price-sensitive consumers and maintain a steady stream of sales without sacrificing profitability. Another key benefit of EDLP is the potential for operational cost savings. By avoiding the need for frequent price changes and promotions, retailers can reduce costs associated with pricing updates, signage, and advertising, resulting in improved operational efficiency.
2. POS = Point of Sale
The Point of Sale refers to the physical or virtual location where a sales transaction takes place. It encompasses the cash register, computer system, or any other device used to process customer purchases. Data from the POS is usually collected and fed into data warehouses, enabling retailers to extract valuable insights that inform decision-making, such as product assortment optimization, pricing strategies, and targeted marketing campaigns. By analyzing POS data, category managers can make better decisions for their categories.
3. GTIN = Global Trade Item Number
A Global Trade Item Number is a globally-unique identification code assigned to a specific product. GTINs help standardize product identification and facilitate efficient supply chain operations. These codes are commonly used in barcodes and are recognized internationally. By implementing GTINs, category managers can accurately track products across retailers and streamline order fulfillment.
4. SKU = Stock Keeping Unit
A Stock Keeping Unit is a distinct code used to identify and track individual products within a retailer’s inventory. Unlike GTINs, SKUs are unique only within a particular retailer. SKUs play a vital role in category management as they enable accurate inventory management, ordering, and replenishment. Each SKU corresponds to a specific product variant, such as size, color, or packaging. By effectively managing SKUs, retailers can optimize product assortment, reduce stockouts, and improve overall operational efficiency.
5. SOS = Share of Shelf
Share of Shelf is a metric used to evaluate the prominence of a product on store shelves. It represents the percentage of shelf space occupied by a particular brand or product within a category. Suppliers aim to maximize their products’ SOS in their categories to increase product visibility, enhance brand awareness, and drive sales. Monitoring and optimizing SOS is crucial for category management, as it helps suppliers understand their position relative to competitors and identify opportunities for improving shelf presence.
Master the ABCs of Category Management!
Becoming well-versed in category management jargon is essential for retail professionals aiming to optimize their merchandising and sales strategies. By familiarizing yourself with terms, you will gain a solid foundation to effectively analyze data, make informed decisions, and optimize product categories. Leveraging these concepts will help you stay competitive, boost your category’s sales, and deliver exceptional shopping experiences to your customers.
Please stay tuned for upcoming additions to the glossary. Got questions? Contact us today.