| Oracle® Retail Category Management User Guide for the RPAS Fusion Client Release 14.1.1 E62413-01 |
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| Oracle® Retail Category Management User Guide for the RPAS Fusion Client Release 14.1.1 E62413-01 |
|
Previous |
80/20 rule
Based on Pareto's principle, a rule of thumb used by retailers that typically 20 percent of SKUs typically perform 80 percent of the volume.
ACV weighted distribution
The percent of the annual value sales (All Commodity Volume) represented by the stores where at least one unit of a particular SKU was sold.
affinities
The relationship between items or groups of items in the basket of a customer. Types of affinities include cannibalization (product A reduces sales of product B) and halo (when you sell product A, more of product B sells).
API
Application Programming Interface. A set of routines, protocols, and tools for building software applications.
ASO
Assortment and Space Optimization, the alignment of assortment plans to available space at the stores based on advanced science. This helps improve assortment space productivity and fill rates. Integration with ASO is utilized to perform assortment space optimization.
assortment changes
A change of the product-mix of the assortment. Generally, this is referred to as Keep, Add, and Drop decisions. In the application, it is done by marking or un-marking the Core and Optional SKU flag.
assortment finalization for implementation
Once the assortment plan has been space optimized using the integration with ASO, it is reviewed, accepted, approved, and then finalized for implementation. This signals ASO to go ahead with the implementation of the assortment plan by collaborating with space planning solutions.
assortment finalization for space optimization
The finalization of the system-recommended assortment (IPI and Market Coverage Assortments) after changes have been made to it per business requirements before it is exported to ASO for space optimization.
assortment improvement
Demand transference-based automated assortment optimization on key retail parameters, such as, sales and gross profit.
assortment quantification
Obtaining a gauge of the assortment plan numbers in the form of sales, gross profit, and inventory parameters.
average days of supply
The average inventory (or stock cover) carried by a store, measured as the number of days the average inventory available at the store will last.
baseline demand
Before any changes are made to the assortment and DT is applied, the demand or the sales units of items being projected for a given assortment is referred to as baseline demand. Baseline measures in the application appear with labels of the type, XYZ Assort Sales U/R and XYZ Assort Gross Profit R/% where XYZ equals IPI or Market Coverage. For final assortment level measures, the baseline measures are labeled as WP Assort Sales U/R and WP Assort Gross Profit R/%.
cannibalization
The cannibalization of sales in an assortment is based on the concept of overlapping sales between different items in the assortment that have similar product attributes. For example, if a new item is added to the assortment that is similar to many existing items in the assortment, the sales of existing items will be reduced, as some of their baseline sales will be absorbed by the new added item.
category
A distinct, measurable, and manageable group of products and services that consumers perceive to be interrelated and/or substitutable in meeting a consumer need.
category buyer conversion
Of the customers who shop at a store or a retailer, the percentage that buys the category.
category definition
A distinct set of items with similar product attributes that form a group or category in the product hierarchy. Basically, consumers group together brands, types, and individual SKUs in a way that is significant to them and enables them to differentiate between SKUs to meet their needs. This forms the basis for the category definition in consumer-centric category management.
category growth
Target growth percent for the category compared to last year as defined in category planning.
category role
Represent the importance and function of a product category in a retailer's business from a big picture perspective or in the larger scheme of things. Category roles are assigned on the basis of the industry models, model A and model B. Examples include destination and convenience categories.
category strategy
Strategies suggest the overall approach for achieving the required category role. Strategies are assigned on the basis of qualitative and cross-category quantitative analysis based on specific retail parameters. Examples include: Cash Generating, Transaction Building, and Traffic Building Strategy.
category tactic
Tactics are a set of activities used to attain the set strategy for a sub-category or category. Areas where tactics are applied include assortment, inventory, pricing, promotion, and space. For example, maintaining inventory and increasing the assortment or adjusting shelving and capacity are some of tactics that can be applied. The assignment of roles, strategies, and tactics fulfills a critical need in retail business planning, which is to organize the whole business, consisting of numerous product categories, in a manner that maximizes sales and profits and produces optimum business results.
CDT
Consumer Decision Tree, the relationship of product segments to one another in terms of perceived consumer importance. Structure implies a hierarchical relationship among the segments. A consumer makes a specific judgment first, proceeds to the second most important decision, proceeds to the third decision, and so on.
consumer segment
A consumer profile that meets certain demographic and psychographic parameters. Retailers derive different types of profiles of consumers they want to target and then map their stores to the specific consumer segments.
current space
Space allocated to different levels of product and POG hierarchy as per the current store layout.
demand
Typically, demand refers to sales units or volume of sales. However, it is also used to refer to sales revenues (Sales R in the application). To derive values of demand transference measures, all the calculations are first done at the sales units' level. Demand can be recorded sales, actuals, or expected sales or forecast. Forecast is typically a future prediction. However, the use of demand in demand transference is similar to a forecast or is in the context of a future time-frame.
demand received %
A percentage of the total sales units of a SKU, transferred from it and received by its substitute SKUs, when it is dropped from the assortment. It is expressed as a percentage of total sales of the SKU.
Note the following:
Substitutable Demand (%, Sales U, Sales R) = Sum of Demand Transferred to Substitute SKUs (%, Sales U, Sales R)
Demand Transferred % equals the sum of substitute SKUs' Demand Received% presented in DT Details/Distribution
Aso known as demand sales received %.
demand transference
The shift in sales between SKUs in an assortment with any changes made to the product-mix.
demand transferred %
The percentage of baseline demand of the SKU that is transferred to its substitute SKUs in the assortment when it is dropped.
DT SKU cut-off %
The percentage of substitutable demand of a parent SKU that the user wants to see in the application or in the views (Review Assortment type and Review DT Details). This threshold value is defined as the percentage of substitutable demand (substitutable demand sales). No. of Significant Substitute SKUs is calculated on the basis of DT SKU Cut-Off %. It can be defined at the base intersection of a sub-category, trading area intersection. The requirement for this measure derives form the substitutable sales that are transferred to substitute SKUs that have a tapering effect post a threshold value. The user does not need information about the insignificant substitutable demand's distribution.
hardline retailer
A retailer who sells merchandise such as hardware, housewares, automotive, electronics, sporting goods, health and beauty aids, or toys.
halo
An increase in the sales of one item from its baseline sales when another item is on promotion. Retail Analytics calculates this metric in conjunction with affinity items. When item A, which Item B has affinity to, is promoted, any positive impact on item B's sales during this promotion period is referred to as halo.
household panel data
Product purchase behavior data collected from a panel of households that are projected to represent a targeted area (such as a region, local market, or total country). All purchases are captured at the point-of-sale or in-home using handheld scanners. Captured sales conditions may include pricing, trade channel, display, feature, and so on. Data suppliers then mine the data to provide insight into consumer purchase behaviors.
incremental demand
The irreplaceable sales of an SKU, in cases where it is dropped from the assortment. In other words, a quantum of sales is lost and is not transferred to other SKUs in the assortment. For example, 30 percent of the sale of Orange Juice - 12 Fl Oz is lost.
In general, these measures are linked to each other by the following equation:
Total Demand = Substitutable Demand + Incremental Demand
or
Total Sales = Substitutable Sales + Incremental Sales
Also known as lost demand sales U/R.
incremental sales
The demand transference applicability to an assortment. Conceptually, incremental sales are the unique sales that a SKU brings into an assortment (in other words, the irreplaceable sales or lost demand or lost sales). Cumulative incremental sales are used to derive the incrementality curve.
index
When comparing metrics, the common approach is to express the data as an index versus the average of all SKUs in a segment.
IPI
A system calculated metric which determines the item or sub-category's overall relative importance.
loyalty card data
Data captured through loyalty cards for a particular retailer. Retailers mine the data of their loyalty card holders in order to understand who their profitable customers are, what they buy, how often they buy, and which products and attributes they are loyal to. Also known as frequent shopper data.
market basket
A focus area used in calculating IPI scores. It refers to customer purchases (or customer's basket or basket in general). It is concerned with analyzing the product (SKU) mix, the number of baskets over a period of time, the value of the basket bought, and a category or sub-category's contribution to a customer's basket.
market basket data
Data about the total transaction (such as market basket) that SKUs are a part of. This type of information provides insight into the halo and cannibalization effects of items that are purchased, which items are typically found in high basket rings, and so on.
market coverage
The percentage of total market sales that is generated by SKUs in retailer's assortment. For example, the retailer can be carrying 100 SKUs whose combined sales represents 90 percent of the market or 90 percent of market coverage.
market data
Retail and consumer data provided to retailers and their suppliers by third-party syndicated data suppliers. This data reflects all retailers as a whole.
market loyalty data
Data supplied to retailers by syndicated data suppliers, such as Nielsen or Symphony IRI, that represents loyalty metrics associated with consumers within a particular trading area. Market loyalty represents consumer loyalty within the market.
market share
The percentage of sales volume (amounts or units) that a particular category, product segment, or item contributes to all the sales volume in the market.
MDM
Master Data Management, the system used to maintain business foundation data such as product hierarchies, calendar hierarchies, and location hierarchies.
MSO
Macro Space Optimization, used to allocate optimum space to different levels of the product/POG hierarchy. It is conducted at the department and sub-category level in the application.
no. of significant substitute SKUs
Substitutable demand requires the presence of similar SKUs in the assortment that can absorb the substitutable demand. For example, the No. of Significant SKUs' measure is 3. The API (Java libraries) is used to calculate this parameter and, as part of this process, the substitute SKUs are also identified.
POG hierarchy
Defines the way products are physically merchandised in a store. Three levels of the POG hierarchy are defined in the application: POG Department, POG Category, and POG Sub-Category.
product segment
Individual groups of products that are segregated by consumers. For example, in the pet care category, consumers tend to segregate products into groups for dog, cat, and aquatic food. They may further divide dog food products into food and accessories and food into dry, canned, and soft and moist types.
SBU
Strategic Business Unit. In a gamut of product categories that a retailer's stocks and sells, Category Management practice recommends an approach to manage each category as a strategic business unit.
segment shopper index
The percentage of a segment's shoppers represented by the targeted consumer households (demographic), divided by the percentage of shoppers that the same demographic represents of all shoppers in the market place. A retailer can use this information to discriminate in favor of segments having the greatest appeal or importance to their target consumer.
SKU contribution analysis
The amount that a particular SKU contributes to the overall business of the product segment or category as a whole. Business can be measured in the form of sales units or sales revenue.
SKU fragmentation analysis
Used to view the distribution of sales across a retailer's assortment or a list of SKUs selling in the market for a category.
SKU proliferation analysis
Used to view the cumulative sales of an assortment against the SKU count.
spending index
Compares what the buyer spends at the retailer or in the market. It is calculated using an index to average method by dividing a consumer segment's spend by the average consumer segment spend.
store cluster
Grouping of stores based on parameters such as consumer segment, store size, and store performance.
substitutable demand (also referred to as substitutable demand Sales U/R)
Replaceable sales of a SKU, in situations where it is dropped from the assortment. That is, substitutable demand is transferred to substitute SKUs in the assortment.
For example, if Brand A Orange Juice - No Pulp - 12 Fl Oz is dropped from an assortment, 70 percent of its sales get transferred to similar SKUs in the assortment, including Brand B - No pulp - 12 Fl Oz, Brand C 13.5 Fl Oz, and Private Label 14 Fl Oz. More SKUs can be included in this list, but a significant amount of this demand is absorbed by these three SKUs.
target market coverage
The market coverage being targeted for a category's assortment plan by the retailer.
top shopper index
Represents the tier-1 level of loyal customers, as determined by the retailers' loyalty solutions.
trading area
A geographic region consisting of customers for a retailer, as defined by syndicated data providers or by the retailers, that produces significant business and has distinctive business traits and trends.
updated demand
Updated demand (or updated only) measures are always used in combination with baseline demand measures to differentiate between the demand before DT is applied and after DT is applied. Once the additions and deletions are completed for a given assortment and DT is applied to the assortment's projected sales units, this new projected demand is referred to as updated demand or DT affected demand.
DT affected measures are presented in the application with the following measure label format and syntax: WP XYZ DT Assort Sales U/R and WP XYZ DT Gross Profit R/% where XYZ equals IPI or Market Coverage. For final assortment level measures, the updated measures are labeled as WP DT Assort Sales U/R and WP DT Assort Gross Profit R/%.
Also known as DT affected demand.
