Consumer Goods Glossary

The world of consumer goods is expansive, covering various products ranging from clothing, food, healthcare to household items. Whether you’re a business owner, marketer, or a curious consumer, aligning on the terminology and concepts used in this industry can be challenging. That’s where the Aforza Consumer Goods FAQ Glossary comes in.

This glossary offers a comprehensive list of crucial terms and concepts associated with consumer goods, each with a brief definition to aid in demystifying the jargon. These terms span a broad range of topics relevant to the industry, from supply chain management to online marketplaces, product development to sales forecasting.

Whether you’re seeking to align on terms for effective business operations, deepen your knowledge of the consumer goods landscape, or decode the language of advertising and marketing, this glossary is a valuable resource. So dive in and start exploring the world of consumer goods with confidence!

A

• Activity optimization: The process of improving efficiency and effectiveness of a sales rep’s visit & task activities by analysing and optimizing key elements such as priority, order and duration.

• Ambient: Refers to products that can be stored at room temperature and do not require refrigeration or freezing, such as dry goods or shelf-stable packaged foods.

• API (Application Programming Interface): A set of rules and protocols that allow different software applications to communicate and exchange data, enabling integration and interaction between various systems in the consumer goods industry.

• Asset: Any merchandise or promotional items, including fridges, gondolas, gantries and stands, that has value to an organization and need to be tracked.

• Assortment: A group of products eligible for sale at a particular store or group of stores, optimised to protect margins and meet local demand.

• Attribute: A characteristic or feature of a retailer, such as location, footfall, size or competitive presence, that can be used to drive eligibility and targeting of field activity.

• Available to promise (ATP): The process of checking inventory availability to fulfil customer orders, based on real-time inventory levels, production schedules, and customer demand.

• Availability: The state of a product being accessible and ready for purchase by consumers, often influenced by factors such as inventory levels, manufacturing capacity, and delivery logistics.

• Audits: The process to ensure that products are displayed correctly on the shelf, that customers can find them, and they appear in the most appealing way possible. Audits are typically performed on a periodic basis to make sure that the product is always available and managed consistently on the shelf.

• Augmented Reality: An approach that superimposes a computer-generated image of items, such as a product, promotion or merchandising equipment, into a customer’s view of the real world. This makes it easier to bring brand and promotional concepts to life and engage customers.

B

• Batch No.: A unique identifying number assigned to a specific group of products manufactured together during a particular production run or process.
• Barcode: A unique identifier, on a product, or its outer package that can be scanned to return its details and allow for ordering and or stock management. In data management it can be referred to as the EAN code, or UPC number, and can come in 3 different lengths – depending on data schema chosen.
• Baselines: Refer to the volume of product that consumers purchase in the absence of a promotion. This often comes from the loyal brand consumers who buy the same items week in and week out whether there is a promotion or not. Baselines provide the best understanding to the underlying health and trends of a brand.
• Bill of Material (BOM): Often referred to as a deposit product that is associated/related to the product being purchased, e.g. Pallet, Case, Bottles.
• Branding: The process of creating a name, design, or symbol that identifies and differentiates a product from other products.
• Brick & Mortar: Traditional physical retail stores or businesses with physical locations where customers can purchase products directly in the consumer goods industry.
• B2B (Business-to-Business): Refers to commerce between businesses, such as a manufacturer selling to a wholesaler or a wholesaler selling to a retailer.
• B2C (Business-to-Consumer): Refers to commerce between a business and individual consumer, such as a retailer selling directly to a customer. This is sometimes referred to as DTC (Direct-to-Consumer).
• Break-Even Point: The point at which revenue, at a company, brand or promotion level, equals its costs, resulting in neither profit nor loss.
• BYOD (Bring Your Own Device): A policy allowing employees in the consumer goods industry to utilize their personal devices, like smartphones or tablets, for work tasks, creating a challenge between convenience and security concerns.

C

• Call Optimization: The process of improving efficiency and effectiveness of a sales rep’s visits by analysing and optimizing key elements such as priority, order and duration.
• Cash & Carry (C&C): Route to market where products are sold to retailers who generally collect the goods as part of their restocking.
• Cash Flow: The amount of cash or cash equivalents that flow in and out of a business over a period of time, often used as a measure of financial health.
• Category Management: The process of managing a group of products as a single strategic business unit, often based on customer needs or market trends.
• Chilled: Products that require refrigeration or cold storage to maintain their quality and safety, typically below 8°C.
• Claim: A formal request made by a policyholder or customer to an insurer or supplier for compensation due to a loss or damage covered under a policy or agreement.
• Consumer: A person who purchases and uses goods or services for personal use or consumption.
• Consumer Goods Analytics: A data-driven approach to help consumer product companies leverage their vast data sets and make better decisions that protect margins and drive business growth.
• Consumer Packaged Goods (CPG): Products that are consumed regularly and quickly, such as food, beverages, and personal care items.

D

• Delivery Day: pre-defined day/days to which a retailer has been allocated as the day that their orders will be delivered, often used in conjunction with a defined route.
• Demand Planning: A function within a business that takes data from various sources, such as sale history, customer future sales forecasts, promotional uplift – to predict manufacturing and logistics requirements.
• Depot: A location from where the delivery of goods is planned.
• Digital Asset Management (DAM): The process of efficiently managing, organising and executing digital assets.
• Digital Badges: Virtual credentials or visual representations earned by consumers as recognition of their achievements or engagement in loyalty programs.

E

• E-commerce: The buying and selling of products or services online.
• EDI (Electronic Data Interchange): A computer-to-computer communication system that enables the exchange of business documents in a standardized electronic format.
• Endcap: A display shelving unit located at the end of an aisle in a retail store.
• Endless Aisle: A retail strategy that allows customers to access an extended range of products beyond what is physically available in-store through digital kiosks or online platforms.

F

• FMCG (Fast-Moving Consumer Goods): Refers to products with high turnover and rapid sales, requiring frequent replenishment.
• Field Teams: Groups of employees or representatives from a consumer goods company who work in the field.
• Food Services/ Food Service Channel: A distribution channel that provides prepared food and beverages.

G

• Gap: The difference between the current state of a business process or performance and the desired state.
• Geofencing: A location-based marketing strategy that uses GPS or RFID technology.
• Global Location Number (GLN): A unique identification number used to identify physical or legal locations.

H

• High-Speed Retail: A retail concept that leverages technology and automation to streamline the shopping experience.

I

• Image Recognition: The process to analyse how prominently a brand is displayed on store shelves compared to competitors.
• Impulse Purchase /Buy: An unplanned buying decision made by a consumer, often triggered by promotional displays.

J

• Joint Business Planning (JBP): A collaborative process between consumer goods manufacturers and retailers.

K

• Key Account Management (KAM): A strategic approach to managing relationships with important customers.

L

• Labor Compliance: Ensuring adherence to local and international labor laws.
• Lead Time: The amount of time between placing an order and receiving the product.

M

• Manifest: A document associated with delivery drivers detailing the total amount of volume, weight etc. that has been loaded to a vehicle.
• Market Research: The process of collecting and analysing data about customers and market trends.

N

• Net Promoter Score (NPS): A measure of customer loyalty and satisfaction.
• NPD (New Product Development): The process of creating and introducing new products or services into the market.

O

• Objective: A specific and measurable goal set by a company.
• Omnichannel Retail: A seamless shopping experience where consumers can interact through multiple channels.

P

• Packaging: The materials and design used to protect and contain a product.
• Payments & Collection: The process of managing the payment and collection of funds from retailers or distributors.

Q

• Quality Assurance: A proactive approach to ensure consumer goods’ consistent quality through systematic checks.

R

• Ready To Drink (RTD): Beverages that are pre-mixed and packaged for immediate consumption.
• Rebate: A partial refund or discount given to consumers after the purchase of a product.

S

• Sales Forecasting: The process of estimating future sales based on historical data.
• Share of Shelf: The percentage of shelf space that a brand or product occupies in a retail store.

T

• Trade Promotion Optimization (TPO): A data-driven approach to managing and improving promotional activities.

U

• UPC (Universal Product Code): A barcode used to identify and track products.

V

• Vendor: A company or individual that supplies products or services to another company.

W

• Warehousing: The storage and handling of products in a warehouse or distribution center.

X

• X-factor: A unique characteristic or feature of a consumer product that sets it apart from competitors.

Y

• Yield: The ratio of usable output to the initial input.

Z

• Zero-based Budgeting: A tool that companies can use to be more purposeful about commercial spend investments.

Thanks for taking the time to read through our Consumer Goods Glossary, we hope it was helpful in navigating the often confusing and complex terminology in the industry.