Types of Retail
Retail is the retail process of selling consumer products or services directly to consumers through various channels of distribution in order to make a profit. Retailers meet demand identified by a supply chain starting with manufacturer. Products are manufactured and packed at the manufacturers facility, transported to retail stores, and sold in retail stores. This supply chain results in improved product quality and timely delivery to the customer. This article focuses on retail operations for small to mid-size business.
Retailers have traditionally provided services and products for consumers in local stores and at departmental stores. As technology has improved, many retailers have moved their focus to Internet sales to increase their revenues. Consumers can purchase products from anywhere they have Internet access, including their personal computers at home, at work, or at school. This has expanded the reach and customer base of retailers beyond their traditional customer base.
Some consumers prefer to shop for goods online and do not go to brick and mortar stores. Other consumers like to buy goods at department stores but shop online for these goods. Still other consumers shop mostly for goods that are purchased at specialty stores such as Bed, Bath and Beyond (BBB). While these consumers have choices, they face the challenges of finding stores that sell the products they want and need at prices that match what they expect to pay for those products. In this case, retailers may need to expand their product offerings to fill the needs of the customers.
The fastest growing sector of retail is the off-price retailer. Off-price retailers sell goods and services to consumers who are normally high-end retailers. These retailers provide specialized, unique goods at prices that are usually lower than those offered at mainstream department stores. Many off-price retailers have established their own name and market in the industry and offer a loyal customer base to their name. Because some off-price retailers offer goods and services at a discount or at a significant discount to mainstream retailers’ regular prices, off-price retailers help to level the playing field and create more choices for consumers.
Drug stores, also called superstores, play an important role of providing specialized services for their customers. Many consumers prefer to shop for pharmaceuticals and medical supplies through drug stores instead of going to a retail store. Because many pharmacies offer prescription discounts and special deals to consumers with good credit, drug stores are a favorite destination for consumers looking to purchase prescription drugs at discounted rates. Although there are many drug stores that offer a wide range of services, some drug stores specialize in a particular area of medicine such as over-the-counter cold and flu medicines, sunscreen and hair dye, home remedies and diet supplements. In addition, because pharmacies offer specialized services, many consumers choose to patronize drug stores instead of traditional retail stores.
There are many types of retail businesses in today’s marketplace. Each type of retail business has its own unique benefits and challenges. When planning your business plan, be sure to consider the different types of retail that are available and how you can best serve your customers to increase profits while decreasing your costs and risks.