Introduction to Retail
Retail is the generic term for the retail sale of consumer products or services directly to consumers in the market. Retail chains meet demand identified by a supply chain throughout the distribution process. Retail stores typically display merchandise for sale in their location. Products are displayed on a fixed format that allows consumers to select items that meet their requirements. The final step of the supply chain process is to sell the products at the retail location to customers.
A retail store can be one-stop-shopping where the customer does not need to go through different stores to locate the required items or goods. On the other hand, supply chain distribution might take more time and involve additional expenses as retailers have to visit various establishments to purchase goods and arrange for retail sales. Retailers use various strategies and equipment to increase sales such as: retail displays, retail floor space, retail shelves, point of sale equipment and merchandising systems. All these strategies are intended to make retail sales easy and efficient while lowering operational costs.
The major categories in retail are: chain stores, discount stores, shopping centers, specialty stores, mall-based retail stores and Internet retail stores. Each category has its own unique attributes and characteristics. Chain stores are characterized by established and long-term relationships with clients. They offer a wide range of merchandise and services, including: branded apparel, electrical appliances, toys, home appliances, books, confectionary and electronics. Discount stores provide affordable products and services that do not compromise quality.
Discount department stores are characterized by huge savings on products as well as on their prices and product lines. They have widespread product lines and warehouse facilities. Many people prefer to shop in discount department stores because they are able to buy goods or items in large quantities. Department stores have many individual product lines and are known for stocking popular products and brand names. Some department stores also offer personalized merchandise that can be branded with the customer’s name.
Online retailing is a form of direct selling or internet selling where the retailer sells the goods directly to customers without a physical presence. The advantage of online retailing over traditional retailing is that customers can purchase goods or items in small quantities, as needed, without leaving the comfort of their homes. Online retail stores offer a full assortment of consumer goods at reduced prices. Online retailing helps reduce expenses associated with overhead and labor, and it allows customers to buy goods or items from various sellers without visiting the retailer in person.
Franchises offer retailers the opportunity to enter into a business with a large number of resellers. The retailer agrees to furnish materials, equipment, and advertising for the operation for a fee. The franchisee establishes outlets in strategic locations and handles all aspects of marketing, selling, and buying the goods or items. A franchisee can buy the franchise rights to operate as many outlet locations as he or she wishes. The franchisee also manages the day to day operations of the franchise and can make decisions concerning employment policies, work schedules, store design, and more.