Scientific Retailing

Definition of 'Scientific Retailing'


The use of technology by retailers in order to make decisions regarding product placement, selection and inventory levels. Scientific retailing typically involves the use of computers and software in order to track consumer purchases and reactions to different promotions and pricing. This type of retail strategy can lead to centralized operations, in which the home office makes decisions regarding store layout and products offered, to cede more control to individual stores in order to take advantage of local consumer behavior and demographics.

Investopedia explains 'Scientific Retailing'


Employing a scientific retailing strategy by a company replaces the more traditional "gut instinct" that used to direct decision making. For example, a nationwide clothing chain using scientific retailing may notice that consumers in one part of a city are purchasing t-shirts, while across the same town consumers are purchasing golf shirts. By analyzing data and allowing individual stores to promote what consumers are buying instead of forcing each store to sell prescribed items, the chain may see higher sales and more repeat customers.



comments powered by Disqus
Hot Definitions
  1. Treasury Inflation Protected Securities - TIPS

    A treasury security that is indexed to inflation in order to protect investors from the negative effects of inflation. TIPS are considered an extremely low-risk investment since they are backed by the U.S. government and since their par value rises with inflation, as measured by the Consumer Price Index, while their interest rate remains fixed.
  2. Gilt-Edged Switching

    The selling and repurchasing of certain high-grade stocks or bonds to capture profits. Gilt-edged switching involves gilt-edged security, which can be high-grade stock or bond issued by a financially stable company such as the Blue Chip companies or by certain governments.
  3. Master Limited Partnership - MLP

    A type of limited partnership that is publicly traded. There are two types of partners in this type of partnership: The limited partner is the person or group that provides the capital to the MLP and receives periodic income distributions from the MLP's cash flow, whereas the general partner is the party responsible for managing the MLP's affairs and receives compensation that is linked to the performance of the venture.
  4. Class Action

    An action where an individual represents a group in a court claim. The judgment from the suit is for all the members of the group (class).
  5. Retail Sales

    An aggregated measure of the sales of retail goods over a stated time period, typically based on a data sampling that is extrapolated to model an entire country. In the U.S., the retail sales report is a monthly economic indicator compiled and released by the Census Bureau and the Department of Commerce.
  6. Okun's Law

    The relationship between an economy's unemployment rate and its gross national product (GNP). Twentieth-century economist Arthur Okun developed this idea, which states that when unemployment falls by 1%, GNP rises by 3%. However, the law only holds true for the U.S.
Trading Center