Work In Luxe - Luxury glossary

Luxury industry terms

Allocation

Distribution of product quantities across stores or regions based on sales forecasts and performance.

ASP

Average Selling Price

Average revenue per item sold within a period.

Atelier

Workshop where artisans, seamstresses and technicians produce prototypes, couture pieces or small-series luxury products.

ATV

Average Transaction Value

Average revenue generated per sales transaction, used to understand how much clients spend per purchase.

B2B

Business to Business

Commercial transactions conducted between businesses, such as between brands and suppliers.

B2C

Business to Consumer

Sales model where a brand sells products directly to end clients.

Bespoke

Completely made-to-measure product created for a single client, often involving multiple fittings and custom design choices.

BOH

Back of House

Non-client areas handling stock, packaging and operations.

BOM

Bill of Materials

Detailed list of components required to manufacture a product.

Bottier

French term for a master shoemaker who creates bespoke footwear, often by hand from last-making to finishing.

Clienteling

Personalized relationship-building through tailored outreach and services.

CRM

Customer Relationship Management

Systems and strategies to manage client data, loyalty and outreach.

Distribution Center

Facility where goods are stored, managed, and dispatched to boutiques or clients.

ERP

Enterprise Resource Planning

Integrated software platform connecting finance, operations, inventory, and HR data for business efficiency.

FIFO

First In, First Out

Inventory method ensuring older stock is sold or used before newer arrivals to maintain freshness.

FOH

Front of House

Client-facing areas including sales floor and welcome zone.

Forecasting

Demand Forecasting

Use of data and trends to predict product demand and guide inventory planning.

Fulfillment

Process of preparing and shipping customer orders from warehouses or stores.

Haute Couture

Haute couture

Made-to-measure fashion collections created by hand in ateliers for individual clients, showcasing the highest craftsmanship and creativity.

Industrialization

Process of translating a prototype or sample into a stable, repeatable manufacturing method for series production.

KPI

Key Performance Indicator

Metric used to measure sales, service or operational performance.

Last Mile

Last Mile Delivery

Final step of product delivery to the client, often critical for luxury service quality.

Lead Time

Time between order placement and product delivery, critical in supply chain planning.

LFL

Like-for-Like Sales

Sales comparison between stores that have been open for the same period, excluding new openings.

Leather Goods

Leather-based products such as handbags and belts.

Made-to-measure

Garment or product adapted from an existing base pattern to a client’s measurements, sitting between ready-to-wear and full bespoke.

Maison

French term used in luxury to describe a house or brand with its own heritage, codes and creative identity.

Markdown

Price reduction strategy used to clear slow-moving or end-of-season inventory.

MOQ

Minimum Order Quantity

Smallest quantity a supplier allows per order, affecting production and purchasing decisions.

Omnichannel

Integrated retail approach uniting physical and digital channels to offer a seamless client experience.

OTB

Open-to-Buy

Budget planning method used by buyers and merchandisers to control inventory investment and purchasing volume.

Planogram

Visual plan defining product placement in boutiques to optimize visibility and sales.

POS

Point of Sale

System used to process transactions and capture sales data.

Prêt-à-porter

French term for ready-to-wear collections produced in standard sizes rather than made-to-measure pieces.

Procurement

Process of sourcing and purchasing goods or materials from suppliers while maintaining quality and cost efficiency.

Replenishment

Process of restocking sold or low-inventory items to maintain product availability in boutiques.

Retail Excellence

Operational standards and practices that sustain luxury service quality.

Reverse Logistics

Management of product returns, repairs, or recycling within the supply chain.

RFID

Radio Frequency Identification

Technology using radio waves to track and manage products through the supply chain.

ROI

Return on Investment

Measure that compares the profit generated by an initiative to the cost of the investment.

RTW

Ready-to-Wear

Pre-made apparel available in standard sizes.

Savoir-faire

French term describing the specialized know-how and craftsmanship skills of a luxury house or artisan.

Sell In / Sell Out

Sell-In / Sell-Out

Metrics differentiating sales to distributors (sell-in) and final customer purchases (sell-out).

Sell-through

Percentage of inventory sold within a defined time period.

Shrink

Loss of inventory from theft, damage or recording errors, tracked as a key risk metric in retail and operations.

SKU

Stock Keeping Unit

Unique identifier used to track individual products and variants.

SKU Rationalization

Analysis process used to optimize product assortment and eliminate underperforming SKUs.

SKU Rotation

Cycle of introducing, monitoring, and replacing product references to keep the assortment fresh.

SLA

Service Level Agreement

Contract defining the expected quality and delivery standards between service providers and the brand.

SLG

Small Leather Goods

Small leather accessories like wallets and cardholders.

SOP

Standard Operating Procedure

Documented process outlining operational best practices to ensure consistency across teams.

Supply Chain

Entire process connecting raw materials, production, and final product delivery to stores or clients.

Technical Pack

Technical pack (tech pack)

Complete set of documents including measurements, construction notes, materials and sketches that guides factories in producing a product exactly as intended.

Toile

Test garment made in inexpensive fabric to check fit and construction before cutting into final materials.

Traceability

Ability to track every stage of a product’s lifecycle from sourcing to sale, key in sustainable luxury.

UPT

Units Per Transaction

Average number of items sold in each sales transaction, often used to track cross-selling and basket building.

VIP

Very Important Client (VIP)

High-value client segment receiving priority service, tailored experiences and special benefits in boutiques.

Visual Merchandising

Presentation of products to enhance storytelling and sales.

WMS

Warehouse Management System

Software used to manage and optimize warehouse operations such as receiving, picking, and shipping.

Luxury glossary: terms and definitions