RBSE Sec Voc Retail cheat sheet

Retail is the sale of goods or services to the final consumer for personal, non-business use; the retailer is the last link in the distribution chain.

Retail formats: department store (broad lines, service-oriented), supermarket (food-led self-service), hypermarket (food plus general merchandise), convenience store (long hours, small range, high price), specialty store (narrow range, deep assortment), discount store (low price, low service), e-commerce and omnichannel.

Retail mix elements: merchandise (assortment, quality), price, location, promotion, presentation (store atmosphere), service, and personnel.

The retail value chain: manufacturer to wholesaler or distributor to retailer to consumer; each intermediary adds cost but also adds utility (time, place, possession, form).

Utilities created by retailing: place (moving goods to where buyers are), time (storing until needed), possession (transfer of ownership at sale), and information (advice to buyers).

Micro-environment forces: customers, competitors, suppliers, intermediaries, employees and owners; macro-environment forces: political, economic, social, technological, environmental and legal (PESTEL).

Retail life cycle stages: introduction (new format grows fast), growth (competitors enter), maturity (price competition, consolidation), decline (format loses relevance).

Wheel of retailing: new retailers enter as low-price, low-service operators, then add services and raise prices, creating room for the next low-price entrant.

Key performance indicators at store level: sales per square metre, sales per employee, sales per transaction, transactions per day, footfall-to-conversion rate, and gross margin return on inventory (GMROI).

Service quality dimensions (SERVQUAL): reliability, responsiveness, assurance, empathy, and tangibles; reliability is the dimension customers weight most heavily.

Gap model: the service gap is the difference between customer expectation and perceived service; internal gaps (knowledge, standards, delivery, communication) cause it.

Moments of truth are every point where a customer contacts the retailer; each contact either strengthens or weakens the relationship.

CRM is a strategy plus systems for collecting, storing and using customer data (purchase history, preferences, contacts) to build repeat business; it is not only software.

Customer lifetime value (CLV) = average purchase value x purchase frequency per year x average retention years x gross margin percentage; used to justify retention spending.

Retention economics: acquiring a new customer typically costs more than retaining an existing one, and repeat customers usually spend more per visit and are less price-sensitive.

Complaint handling sequence: listen without interrupting, acknowledge and apologise for the experience, gather facts, propose a resolution within policy, act promptly, and follow up to confirm satisfaction.

Service recovery paradox: a well-handled failure can leave a customer more loyal than before, but only if recovery is fast, fair and perceived as genuine.

Escalation rule: front-line staff resolve issues within their authority limit; anything beyond it (refunds above a set value, legal threats, injury) goes to the supervisor or manager immediately.

Seven-step selling process: approach, probing/needs discovery, presentation or demonstration, handling objections, closing, add-on or cross-sell, and follow-up.

Open questions (what, how, tell me) gather information; closed questions (yes/no) confirm; probing should precede any product presentation.

Feature-advantage-benefit (FAB): a feature is a factual attribute, an advantage is what it does, a benefit is what the customer gains; sell the benefit.

Objection types: price, need, product, timing, and trust; acknowledge first, clarify the real objection, then answer with evidence rather than arguing.

Closing techniques: direct close, assumptive close, choice close (two acceptable options), summary close, and urgency close used only when the urgency is real.

Cross-selling offers a related complementary item; up-selling offers a higher-value version of the item already chosen; both must serve the customer's need.

Buying signals: repeated product handling, questions about price, delivery or warranty, and asking about alternatives indicate readiness to close.

Sales-per-transaction and items-per-transaction (UPT = units sold / number of transactions) are the core measures of selling effectiveness at the counter.

After-sale follow-up (delivery confirmation, care instructions, return window reminder) reduces returns and increases repeat purchase.

Assortment breadth (number of product lines or categories) and depth (number of variants within a line, such as size, colour, flavour) are traded off against shelf space and working capital.

Range architecture: core or staple lines carried continuously, seasonal lines, fashion or trend lines, and convenience lines; each has a different buying and markdown rhythm.

Category management roles: destination, routine, occasional/seasonal, and convenience; the role determines space and promotion allocation.

Space productivity measures: sales per linear metre or per shelf, sales per square metre, and profit per facing; use them to reallocate space to higher-yield items.

Planogram: a diagram specifying the exact position of each SKU on a fixture; compliance is checked by audit, and non-compliance is a common cause of lost sales.

Visual merchandising principles: place high-margin or impulse items at eye level, keep the display balanced, use the rule of three for grouping, and change window displays on a set cycle.

Colour blocking, vertical merchandising (a brand or theme stacked top to bottom) and cross-merchandising (related items displayed together) increase basket size.

ABC analysis of assortment: A items are the small share of SKUs producing most sales or profit; C items are candidates for delisting or reduced facings.

New product gate: before listing, check fit with the range, price band, margin, shelf capacity, supplier terms, and whether it cannibalises an existing line.

Inventory turnover = cost of goods sold / average inventory at cost; days of inventory = 365 / turnover. Higher turnover means less capital tied up.

Economic order quantity (EOQ) = square root of (2 x annual demand x order cost / holding cost per unit per year).

Reorder point = (average daily demand x lead time in days) + safety stock.

Safety stock protects against demand and lead-time variability; it rises with higher service-level targets and higher variability.

Perpetual inventory is updated with every transaction; periodic inventory counts stock at fixed intervals; both need physical verification because records drift.

Shrinkage = book stock minus physical stock; causes are theft (internal and external), administrative error, supplier short delivery, and damage or spoilage.

Stock rotation: first in, first out (FIFO) for dated or perishable goods; expired stock must be removed from sale, not discounted.

Stock count controls: two-person counts, blind counts (counter does not see the expected figure), recount of variances above tolerance, and signed variance reports.

Aging analysis flags slow movers; actions are markdown, transfer to another branch, return to supplier, or write-off with approval.

Grid layout suits supermarkets and convenience stores (efficient, high density); free-flow suits fashion and specialty stores (browsing, open feel); racetrack/loop guides customers past all departments.

Decompression zone is the entrance area where shoppers adjust; high-impulse or promotional goods are not placed there because it is under-observed.

Power wall is the first wall seen on entry; it should carry new or high-margin merchandise. The right-hand turn tendency makes the right wall high-value space.

Sight lines and adjacencies: place complementary categories next to each other, keep the rear of the store attractive to pull traffic through, and avoid dead ends.

Checkout zone holds impulse items (small, low price, high margin); queue length is a service measure and a major driver of walkouts.

Store opening and closing checklists cover cash float, till assignment, alarms, lighting, temperature, fire exits, signage, and handover to the next shift.

Daily operations rhythm: stock fill before opening, replenishment during quiet hours, facing up during trading, end-of-day reconciliation and cash banking.

Planogram and fixture compliance, price-tag accuracy, and cleanliness audits are routine operational controls; each has an owner and a frequency.

Markup = selling price - cost; markup percentage on cost = markup / cost x 100; markup percentage on retail = markup / selling price x 100.

Gross margin percentage = (selling price - cost) / selling price x 100. Markdown percentage is calculated on the original selling price.

Pricing strategies: cost-plus, competitive (going-rate), penetration (low entry price to win share), skimming (high launch price), psychological (e.g. 99 endings), bundle, and loss-leader.

Price elasticity of demand = percentage change in quantity demanded / percentage change in price; elastic demand (absolute value above 1) loses revenue when price rises.

Promotion mix: advertising, sales promotion (discounts, coupons, BOGO), personal selling, public relations, and direct/digital marketing.

AIDA model: Attention, Interest, Desire, Action; a promotion should be assessed against which stage it targets.

Promotional effectiveness measures: lift over baseline sales, incremental margin after discount, redemption rate, and halo effect on other categories.

Price-tag legal content typically includes price, unit price where required, product name, and any conditions; expired promotion tags must be removed at the stated time.

Markdown timing: early markdowns protect margin on fashion and seasonal goods; the markdown cadence should be planned before the season, not improvised.

Cash handling: count the float at the start of the shift, keep the drawer closed between transactions, record paid-outs, and reconcile the till at close; overages and shortages are logged.

Cash reconciliation: expected cash = opening float + cash sales - cash refunds - paid-outs; variance = counted cash - expected cash.

Payment types: cash, debit card, credit card, mobile or QR wallet, gift card, store credit, and buy-now-pay-later; each has different settlement time, fee, and chargeback risk.

Card security: never write down the full card number or CVV; the customer enters the PIN or signs on the terminal; keep receipts secure.

POS transaction sequence: scan or key the item, verify price and quantity, apply authorised discounts, total, take payment, issue receipt, and thank the customer.

Change calculation: count up from the amount due to the amount tendered, or subtract due from tendered; recount aloud before handing over change.

Discount arithmetic: successive discounts are not additive; 20% then 10% equals a 28% total reduction (0.8 x 0.9 = 0.72).

Sales tax or VAT: tax amount = taxable amount x rate; gross = net x (1 + rate); net = gross / (1 + rate).

Void versus refund: a void cancels a transaction before settlement; a refund reverses a completed sale and requires the original receipt or an approved exception.

Consumer rights commonly protected by law: the right to safety, the right to be informed, the right to choose, the right to be heard, and the right to redress.

Goods must be of acceptable quality, fit for the stated purpose, and match their description; if they fail, the consumer is entitled to repair, replacement, or refund according to law and policy.

A change-of-mind return is a store policy, not a statutory right, unless the law or the retailer's own published policy grants it; faulty goods are a statutory matter.

Price display rules: the displayed price is generally the price charged; unit pricing and clear total price including taxes are commonly required.

Prohibited selling practices typically include misleading or false claims, bait advertising, pressure selling, and refusing to show a receipt when payment is made.

Record-keeping duties: retain sales records, invoices, warranty documents, and staff training records for the period the law requires; they are evidence in disputes.

Workplace safety duties: employer must provide a safe workplace, training, and protective equipment; employee must follow procedures and report hazards and injuries.

Core safety controls in a store: clear aisles and fire exits, no blocked extinguishers, safe stacking (heavy low, light high), ladder use rules, wet-floor signs, and manual-handling technique.

Emergency procedure: raise the alarm, evacuate by the marked route to the assembly point, do not use lifts, and do not re-enter until cleared by the responsible person.