Merchandise Planning Glossary: 77 Retail Planning Terms

Stock & Supply

Allocation#: The decision (or system process) of distributing units from the DC to specific stores, how many of which sizes go where. 'Push' distribution, used at launch and for one-shot buys.
Availability#: The % of demand (or of SKUs, or of core sizes) in stock when customers want it. The invisible twin of markdown: bad availability loses sales that never appear in any report.
Broken size run#: A style-colour missing core sizes in a location. Effectively unsellable at full price even though units remain, the reason size-level planning and consolidation exist.
Consolidation#: Gathering fragmented stock (typically broken size runs) from many stores into fewer locations or online to rebuild complete, sellable runs.
DC (Distribution Centre)#: The central warehouse receiving supplier deliveries and feeding stores and e-commerce. Holding stock at the DC preserves flexibility; pushing it all to stores commits it.
DIFOT#: Delivered In Full, On Time, the standard measure of supplier delivery reliability. Poor DIFOT quietly wrecks launch plans and intake phasing.
Fill-in#: A top-up order or allocation that repairs size gaps in store, as opposed to a full new allocation.
GRN (Goods Received Note)#: The receipt record confirming stock arrived into the DC or store. Unprocessed GRNs are a classic source of stock-record error.
Min/max levels#: Replenishment bounds per SKU per store: when stock falls to min, the system tops up toward max. A simplified form of the order-up-to model.
Model stock#: The target stock by SKU (style-colour-size) a store should hold, presentation minimum plus commercial depth shaped by the local size curve.
Replenishment#: Demand-driven ('pull') stock flow that refills what sells, usually to a model stock or order-up-to level at SKU-store level. The engine that keeps core lines available.
Review period#: How often the replenishment system checks stock and raises orders (daily, weekly). Together with lead time it forms the exposure window each order must cover.
Safety stock#: Buffer stock held against demand variability and supply delay: roughly the service factor (z) times demand variability (sigma) times the square root of lead-plus-review time. Grows with uncertainty and lead time, not with average demand itself.
Service level#: The chosen probability of not stocking out in a replenishment cycle (e.g. 95%). Maps to the z multiplier in the safety stock formula; each extra point of safety costs progressively more stock.
Shrinkage#: Stock lost to theft, damage and administrative error, measured at stocktake, typically 0.5–2% of retail sales. Planned in the margin waterfall and posted in the WSSI.
SOH (Stock on hand)#: Units or value currently held at a location per the system. Its accuracy against physical reality ('stock integrity') caps the quality of every automated decision.

Money & Margin

ASP (Average Selling Price)#: Sales dollars ÷ units sold. Moves with price changes AND mix (which products actually sold). A falling ASP with an unchanged price file means the mix is drifting cheaper.
ATV (Average Transaction Value)#: Sales ÷ number of transactions. Decomposes with UPT and average item price; a lever watched by store and trade teams.
COGS (Cost of Goods Sold)#: The landed cost of the products actually sold in a period. Sales minus COGS = gross margin dollars.
Comp / LFL sales#: Comparable or like-for-like sales: growth measured only in stores (and weeks) that traded in both periods, stripping out new and closed stores to reveal underlying momentum.
Cost price / Landed cost#: What a unit costs delivered into your DC: factory cost plus freight, duty, agent fees and currency effects. The correct cost basis for margin and GMROI calculations.
Gross margin#: Sales minus COGS, expressed in $ or % of sales. 'Achieved' or 'realised' margin is after markdowns, promotions and shrink erode the intake margin.
IMU / Intake margin / Initial markup#: (Retail − landed cost) ÷ retail at first pricing, before any erosion. The margin the buy was born with; the gap between intake and achieved margin is the cost of trading reality.
Markup vs margin#: Two views of the same price/cost pair: margin is profit ÷ RETAIL; markup is profit ÷ COST. A $40 cost / $100 retail item has 60% margin but 150% markup. Confusing them is the classic retail maths error.
RRP / MSRP#: Recommended (Manufacturer's Suggested) Retail Price, the supplier's suggested selling price. Whether and how suppliers may influence actual retail prices is governed by competition law, which differs by jurisdiction, follow your local legal guidance.

Range & Assortment

Assortment plan / Range plan#: The structured plan of what the range will contain: option counts, price architecture, depth and store ranging by category and cluster, the bridge between financial plan and line-level buys.
Carryover#: A line continuing from a previous season rather than being new. Carryover lines have real sales history, so their forecasts are far more reliable than new lines.
Core / NOS lines#: Never-out-of-stock continuity products carried year-round (plain white sneaker, black work boot). Planned by rate of sale and replenished automatically; success = availability and turn, not seasonal sell-through.
Franchise / Icon style#: A permanent hero silhouette that anchors a brand's range season after season. Managed like core with fashion-level attention.
Option#: A distinct customer choice in the range, normally a style-colour. Option count is the standard measure of range width.
Price architecture#: The deliberate structure of price points (good–better–best) and how options, units and margin distribute across them. Managed in both option counts and unit participation.
Range width / depth#: Width = how many options; depth = units behind each option. For a fixed budget they trade off directly, the central tension of assortment planning.
Size curve / Size ratio#: The % distribution of demand across sizes for a category-cluster. Built from demand (not raw stockout-censored sales) and applied to every buy and model stock.
SKU#: Stock Keeping Unit, the most granular saleable item. In footwear: style + colour + size. A 12-size style-colour is 12 SKUs, which is why footwear inventory is complex.
Style-colour / Colourway#: A style in one specific colour, the usual definition of an 'option'. The parent of its size-level SKUs.

Buying & Planning

Chase#: An in-season repeat purchase of a proven seller, ideally pre-negotiated with the supplier. The upside lever that shallow initial buys depend on.
Drop#: A scheduled delivery/launch of product, 'the range lands in three drops'. Also used for hype-product release events.
FOB / CIF#: Freight terms defining where ownership and freight cost transfer: Free On Board (buyer pays freight from origin port) vs Cost, Insurance & Freight (supplier delivers to destination port). Changes the landed-cost build-up.
Intake#: Receipts: the value or units of stock delivered into the business in a period. The lever the WSSI and OTB exist to control.
Lead time#: Time from order commitment to stock available for sale. Offshore footwear typically 90–150+ days. Lead time determines whether chase and test-and-react strategies are even possible.
Line plan / Line list#: The item-level working document where every option carries its forecast, buy quantity, flow, distribution, targets and exit plan, the planner's set of falsifiable bets.
MOQ (Minimum Order Quantity)#: The smallest order a supplier will accept, per style, colour or size. MOQs force real trade-offs: consolidate options, share across banners, or walk away.
Open-to-buy (OTB)#: The intake budget not yet committed: planned closing stock + planned sales + planned markdown value − opening stock − on-order. A ceiling, not a target.
Phasing#: Spreading a season total across weeks/months, for sales (participation curve), intake (delivery flow) and markdown (event calendar). Right totals with wrong phasing still fail.
WSSI#: Weekly Sales, Stock & Intake, the weekly ledger projecting the stock-flow identity across a season, holding plan, forecast and actuals side by side. The planner's cockpit; the source of OTB.

Trading & Markdown

Clearance#: Permanent end-of-life markdown activity intended to fully exit stock by a deadline, as distinct from temporary promotional discounting.
Elasticity (price)#: % change in unit demand per % change in price. An elasticity of −2.5 means a 20% price cut lifts units ~50%. The engine variable inside markdown and promo modelling.
Exit date / Exit route#: The planned week a line leaves full-price trading and the planned mechanism (markdown, outlet, pack-away, jobber). Agreed at buy time, not improvised at season end.
Jobber#: A bulk buyer of terminal clearance stock at cents on the dollar. The exit of last resort, better than storing dead stock, worse than everything else.
Markdown#: A reduction in selling price. 'Markdown $' measures the value given away (price cut × units affected). Promotional markdown is temporary and event-driven; clearance markdown is permanent.
Pack-away#: Storing unsold seasonal stock to re-sell next year. Occasionally right for true continuity product; usually a way to pay twice for one mistake.
Pull-forward#: Sales an event steals from the following weeks (customers buying earlier at discount). Honest promo evaluation deducts it.
Terminal stock#: Stock remaining after a line's planned exit, the residue that must be cleared, packed away or jobbed. A key hindsight KPI alongside markdown %.

Omni-channel

Click & collect#: Online order collected in store. Stock must be reserved at the moment of order, not at pickup, to avoid selling the same unit twice.
Concession#: A brand-operated space inside another retailer's store (or website), usually trading on the brand's own stock with a revenue share.
Omni-channel#: Operating stores, e-commerce and marketplaces as one demand pool with flexible fulfilment (ship-from-store, click & collect, endless aisle). Plan demand once; plan fulfilment separately.
Returns rate#: Returned units ÷ gross units sold. Online footwear/apparel commonly 10–30%. Plan sales NET of returns and re-process returned stock fast, it ages while it queues.

Stores & Space

Cluster#: A group of stores with similar demand character (climate, demographic, fashion tier, centre type) that receives the same range package. Crossed with grade to form the ranging matrix.
Door#: Trade slang for a store location. 'Ranged in 120 doors' = stocked in 120 stores.
Grading (store)#: Ranking stores into bands (A/B/C/D) by category sales volume to set range width and depth packages. Done at category level and refreshed regularly.
Planogram#: The visual/space plan specifying exactly how product is displayed on fixtures. Constrains how many options a store can credibly range.
Presentation minimum#: The stock a store needs purely to look shoppable, e.g. every displayed style-colour backed by a credible size run, independent of its sales rate. Structural stock small stores are dominated by.
VM (Visual merchandising)#: The discipline of product presentation in store, displays, walls, tables. A 'product problem' is sometimes a VM problem: great shoe, bottom shelf.

KPIs

Cover (WOC / WOS)#: Weeks of cover / weeks of supply: stock ÷ weekly rate of sale, ideally using the forward forecast rate. How long current stock lasts if sales continue at that rate. Reciprocal of stockturn (cover is roughly 52 ÷ annual turn).
Forward cover#: Cover calculated against planned FUTURE sales rather than trailing sales, the planning-correct version, because it is future demand the stock must serve.
Full-price sell-through#: Units sold at full price ÷ units received. The cleanest single test of buy-quantity quality on seasonal lines; healthy fashion targets typically sit around 65–85%.
GMROF / GMROS#: Gross Margin Return On Footage (or Space): gross margin $ ÷ selling area, usually per square metre per year. Prices the productivity of floor space the way GMROI prices stock, and drives macro space allocation decisions.
GMROI#: Gross Margin Return On Inventory investment: gross margin $ ÷ average stock at cost. Decomposes into margin rate × cost stockturn. The bridge between merchandise plans and capital allocation.
GMROL#: Gross Margin Return On Labour: gross margin $ ÷ labour cost (or per rostered hour). Compares what categories or stores earn against the staff time they consume; structurally lower in high-service categories.
Rate of sale (ROS)#: Units per store per week, the atomic unit of planning arithmetic. Forecast it, multiply by doors and weeks, and you have demand; get it wrong and every downstream number is wrong.
Sell-in vs sell-out#: Sell-in: what a supplier ships to the retailer. Sell-out: what customers actually buy. Wholesale brands celebrate sell-in; planners live and die by sell-out.
Sell-through %#: Units sold ÷ units received over a period or a buy's life. The standard verdict on seasonal buy quantities; meaningless for replenished core (which is bought to never sell through).
Stockturn / Inventory turnover#: Annual sales ÷ average stock (same basis): how many times a year the stockholding is sold and replaced. Reciprocal of average cover; multiply by margin rate for GMROI. See the dedicated lesson in Module 1.
UPT (Units per transaction)#: Average items per basket. With ATV and conversion, decomposes store sales performance; lifted by attach selling and multibuy offers.

Analysis

Hindsight / Post-season review#: The structured review of a finished season, financials, buy quality, architecture, timing, whose output is a list of owned changes to next season's plan.
Pareto (80/20)#: The reliable observation that ~20% of options drive ~80% of sales. The basis for hero/tail management: protect the head, interrogate the tail.
Trade / Trading#: The in-season management rhythm: reading weekly sales, re-forecasting, and pulling intake, replenishment, promo and markdown levers. 'How's it trading?' = how is actual demand behaving vs plan.

Stock & Supply

Money & Margin

Range & Assortment

Buying & Planning

Trading & Markdown

Omni-channel

Stores & Space

KPIs

Analysis

Knowing the words is the start. Knowing the method is the job.