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Business Terms in Ecommerce


Dropship : This is a concept often used interchangeably with “Marketplace” though it is a complete different concept. Here any retailer can sell branded goods online without owning the inventory, the manufacturer/distributor will have the responsibility to fulfill the order from its inventory/warehouse. This is a different concept than Marketplace. So, please be careful in designing the solution when client wants to support drop shippers. If client comes up a requirement against marketplace, clarify if this is dropship or marketplace. The merchant platform will greater responsibility if drop-shipping needs to be handled. [Got reference in Aditya Birla retail and Harley-Davidson]

Dark Store : A very specific concept for fulfilling direct to home or online orders from particular warehouse/inventory only. This focuses on not having multiple warehouses to manage the fulfillment. [Got reference in Carrefour BE]

Milk run : A popularized concept to aggregate multiple deliveries, quite popular in food delivery and hyper-local deliveries. This is used to maximize the volumes handled, Indian players like Roadrunnr uses this technique for operational efficiency.

Household Account : In this concept multiple members from the family can use the account with balance, points etc.

Dead Stock : A dead inventory; a case can arise from seasonal demand not getting stocks used completely. During inventory discussion, ask about if any dead stock scenario to be managed.

Dynamic Clustering : Dynamic clustering is used to identify patterns or opportunities in various diverse segments to brings the best possible value for a cluster. A good method for personalization, targeting/segmentation, and recommendation.

Green Retailing : This concept is used by eCommerce players to promote eco-friendly practices.

Keystone Pricing : A little weird but this technique is used by merchandizer to maximize profit, the retail price is almost double of the wholesale price or cost of the product.
Fashion retailers (for ex. Jewelry sellers) use this kind of pricing.

Layway/ Lay-By : A very popular method in Unites States to buy the goods where customers pay though interest-free EMI but gets the product once the loan is served. A safe and convenient way for both the customer and manufacturer/distributor to sell products. In case of any discussion with big retailers like Walmart or Costco, ask for this option if applicable.

Markdown : Markdown is a deep discount but not like usual discounts, rather the price is lowered at a through-away price. This is something like give away price.

Planogram : This is the visual way how retailers can plan to store or arrange merchandizing to drive more sales. The position of products for normal super-market stores is very important for customers to find related, contextual, and seasonal products together or in a more convenient place. Advanced digital technologies like Artificial Intelligence or Augmented Realty can be used for an effective placement of products in the store. Companies like Planorama are using advanced AI and Image recognition to bring store assortment to its maximum effectiveness; Detego is another company building great in-store experience.

Prestige Pricing : Prestige pricing is a technique in which high-end or luxury retailers keep the price higher to make the premium product exclusive for status-conscious consumers. Louis Vuitton uses this pricing technique for its product lines.

Private Label : Non-branded products are called private labels, a very popular concept for consumer goods or retail industry. Target’s Up&Up and Simply Balanced are both examples of private label lines.

Showrooming : This is the concept where customers check products at showroom but buy online at lower price. This can also be another way how consumer goods or big appliance products are sold.

Tribetailing : This technique is used by retailers to zero down its tore design, ads, or employees for a specific group of customers or tribes. The idea is not to attract mass consumers but a niche buyers.

Webrooming : This is a concept where consumers look the product online before buying from brick-and-mortar store. The image based sites and social networks like Pinterest or Instagram help to spread the webrooming technique.

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