Retailing

"Retail" and "Retail stores" redirect here. For the comic strip by Norm Feuti, see Retail
(comic strip).

Drawing of a self-service store.

Retail consists of the sale of goods or merchandise from a fixed location, such as a
department store, boutique or kiosk, or by mail, in small or individual lots for direct
consumption by the purchaser. Retailing may include subordinated services, such as
delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" buys
goods or products in large quantities from manufacturers or importers, either directly
or through a wholesaler, and then sells smaller quantities to the end-user. Retail
establishments are often called shops or stores. Retailers are at the end of the supply
chain. Manufacturing marketers see the process of retailing as a necessary part of their
overall distribution strategy. The term "retailer" is also applied where a service provider
services the needs of a large number of individuals, such as a public utility, like electric
power.

Shops may be on residential streets, shopping streets with few or no houses or in a

shopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping
street has a partial or full roof to protect customers from precipitation. Online
retailing, a type of electronic commerce used for business-to-consumer (B2C)
transactions and mail order, are forms of non-shop retailing.

Shopping generally refers to the act of buying products. Sometimes this is done to
obtain necessities such as food and clothing; sometimes it is done as
a recreational activity. Recreational shopping often involves window shopping (just
looking, not buying) and browsing and does not always result in a purchase.
Etymology

The Apple Store retail location on the Magnificent Mile in Chicago.

The world's only Garmin retail location is located on the Magnificent Mile in Chicago.

Retail comes from the Old French word retaillier (compare modern French retailler),
which means "to cut off, clip, pare, divide" in terms of tailoring (1365). It was first
recorded as a noun with the meaning of a "sale in small quantities" in 1433 (from the
Middle French retail, "piece cut off, shred, scrap, paring"). Like the French, the
word retail in both Dutch and German (detail handel and Einzel handel, respectively) also
refers to the sale of small quantities of items.

Types of retail outlets

 San Juan de Dios Market in Guadalajara, Jalisco

Inside a supermarket in Russia

A market place is a location where goods and services are exchanged. The traditional
market square is a city square where traders set up stalls and buyers browse the
merchandise. This kind of market is very old, and countless such markets are still in
operation around the whole world.

In some parts of the world, the retail business is still dominated by small family-run
stores, but this market is increasingly being taken over by large retail chains.

Retail is usually classified by type of products as follows:

• Food products
 • Hard goods ("hardline retailers") - appliances, electronics, furniture, sporting
goods, etc.
• Soft goods - clothing, apparel, and other fabrics.

There are the following types of retailers by marketing strategy:

• Department stores - very large stores offering a huge assortment of "soft" and
"hard goods; often bear a resemblance to a collection of specialty stores. A
retailer of such store carries variety of categories and has broad assortment at
average price. They offer considerable customer service.
• Discount stores - tend to offer a wide array of products and services, but they
compete mainly on price offers extensive assortment of merchandise at
affordable and cut-rate prices. Normally retailers sell less fashion-oriented
brands.
• Supermarkets - sell mostly food products;
• Warehouse stores - warehouses that offer low-cost, often high-quantity goods
piled on pallets or steel shelves; warehouse clubs charge a membership fee;
• Variety stores or "dollar stores" - these offer extremely low-cost goods, with
limited selection;
• Demographic - retailers that aim at one particular segment (e.g., high-end
retailers focusing on wealthy individuals).
• Mom-And-Pop (or Kirana Stores as they call them in India): is a retail outlet that
is owned and operated by individuals. The range of products are very selective and
few in numbers. These stores are seen in local community often are family-run
businesses. The square feet area of the store depends on the store holder.
• Specialty stores: A typical speciality store gives attention to a particular category
and provides high level of service to the customers. A pet store that specializes in
selling dog food would be regarded as a specialty store. However, branded stores
also come under this format. For example if a customer visits a Reebok or Gap
store then they find just Reebok and Gap products in the respective stores.
• General store - a rural store that supplies the main needs for the local community;
• Convenience stores: is essentially found in residential areas. They provide limited
amount of merchandise at more than average prices with a speedy checkout. This
store is ideal for emergency and immediate purchases.
• Hypermarkets: provides variety and huge volumes of exclusive merchandise at low
margins. The operating cost is comparatively less than other retail formats. A
classic example is the Metro™ in Bangalore.
 • Supermarkets: is a self service store consisting mainly of grocery and limited
products or non food items. They may adopt a Hi-Lo or an EDLP strategy for
pricing. The supermarkets can be anywhere between 20,000-40,000 square feet.
Example: SPAR™ supermarket.
• Malls: has a range of retail shops at a single outlet. They endow with products,
food and entertainment under a roof. Example: Sigma mall and Garuda mall in
Bangalore, Express Avenue in Chennai.
• Category killers or Category Specialist: By supplying wide assortment in a single
category for lower prices a retailer can "kill" that category for other retailers.
For few categories, such as electronics, the products are displayed at the centre
of the store and sales person will be available to address customer queries and
give suggestions when required. Other retail format stores are forced to reduce
the prices if a category specialist retail store is present in the vicinity. For
example: Pai Electronics™ store in Bangalore, Tata Croma.
• E-tailers: The customer can shop and order through internet and the merchandise
are dropped at the customer's doorstep. Here the retailers use drop shipping
technique. They accept the payment for the product but the customer receives
the product directly from the manufacturer or a wholesaler. This format is ideal
for customers who do not want to travel to retail stores and are interested in
home shopping. However it is important for the customer to be wary about
defective products and non secure credit card transaction. Example: Amazon and
Ebay.
• Vending Machines: This is an automated piece of equipment wherein customers can
drop in the money in machine and acquire the products. For example: Soft drinks
vending at Bangalore Airport.

Some stores take a no frills approach, while others are "mid-range" or "high end",
depending on what income level they target.

Other types of retail store include:

• Automated Retail stores are self service, robotic kiosks located in airports, malls
and grocery stores. The stores accept credit cards and are usually open 24/7.
Examples include ZoomShops and Redbox.
• Big-box stores encompass larger department, discount, general merchandise, and
warehouse stores.
• Convenience store - a small store often with extended hours, stocking everyday or
roadside items;
 • General store - a store which sells most goods needed, typically in a rural area;

Retailers can opt for a format as each provides different retail mix to its customers
based on their customer demographics, lifestyle and purchase behaviour. A good format
will lend a hand to display products well and entice the target customers to spawn sales.

Retail pricing
The pricing technique used by most retailers is cost-plus pricing. This involves adding
a markup amount (or percentage) to the retailer's cost. Another common technique
is suggested retail pricing. This simply involves charging the amount suggested by the
manufacturer and usually printed on the product by the manufacturer.

In Western countries, retail prices are often called psychological prices or odd prices.
Often prices are fixed and displayed on signs or labels. Alternatively, when prices are
not clearly displayed, there can be price discrimination, where the sale price is
dependent upon who the customer is. For example, a customer may have to pay more if
the seller determines that he or she is willing and/or able to. Another example would be
the practice of discounting for youths, students, or senior citizens.

Transfer mechanism
There are several ways in which consumers can receive goods from a retailer:
• Counter service, where goods are out of reach of buyers and must be obtained
from the seller. This type of retail is common for small expensive items (e.g.
jewelry) and controlled items like medicine and liquor. It was common before the
1900s in the United States and is more common in certain countries like India.

• Delivery, where goods are shipped directly to consumer's homes or

workplaces. Mail order from a printed catalog was invented in 1744 and was
common in the late 19th and early 20th centuries. Ordering by telephone is now
common, either from a catalog, newspaper,television advertisement or a local
restaurant menu, for immediate service (especially for pizza delivery). Direct
marketing, including telemarketing and television shopping channels, are also used
to generate telephone orders. Online shopping started gaining significant market
share in developed countries in the 2000s.
• Door-to-door sales, where the salesperson sometimes travels with the goods for
sale.
• Self-service, where goods may be handled and examined prior to purchase
Second hand retail

Some shops sell second-hand goods. In the case of a nonprofit shop, the public donates
goods to the shop to be sold. In give-away shops goods can be taken for free.

Another form is the pawn shop, in which goods are sold that were used as collateral for
loans. There are also "consignment" shops, which are where a person can place an item in
a store and if it sells, the person gives the shop owner a percentage of the sale price.
The advantage of selling an item this way is that the established shop gives the item
exposure to more potential buyers.

Sales techniques
Behind the scenes at retail, there is another factor at work. Corporations and
independent store owners alike are always trying to get the edge on their competitors.
One way to do this is to hire a merchandising solutions company to design custom store
displays that will attract more customers in a certain demographic. The nation's largest
retailers spend millions every year on in-store marketing programs that correspond to
seasonal and promotional changes. As products change, so will a retail landscape.
Retailers can also use facing techniques to create the look of a perfectly stocked store,
even when it is not.

A destination store is one that customers will initiate a trip specifically to visit,
sometimes over a large area. These stores are often used to "anchor" a shopping mall or
plaza, generating foot traffic, which is capitalized upon by smaller retailers.

Customer service
Customer service is the "sum of acts and elements that allow consumers to receive what
they need or desire from your retail establishment." It is important for a sales
associate to greet the customer and make himself available to help the customer find
whatever he needs. When a customer enters the store, it is important that the sales
associate does everything in his power to make the customer feel welcomed, important,
and make sure he leave the store satisfied. Giving the customer full, undivided attention
and helping him find what he is looking for will contribute to the customer's satisfaction.

Retail Sales
 US Retail Sales 1992-2010

The Retail Sales report is published every month. It is a measure of consumer spending,
an important indicator of the US GDP. Retail firms provide data on the dollar value of
their retail sales and inventories. A sample of 12,000 firms is included in the
final survey and 5,000 in the advanced one. The advanced estimated data is based on a
sub sample from the US CB complete retail &food services sample.

It has been published by the US Census Bureau since 1951.

Consolidation
Among retailers and retails chains a lot of consolidation has appeared over the last
couple of decades. Between 1988 and 2010, worldwide 40'788 mergers &
acquisitions with a total known value of 2'255 bil. USD have been announced. The largest
transactions with involvement of retailers in/from the United States have been: the
acquisition of Albertson's Inc. for 17 bil. USD in 2006,[6] the merger between
Federated Department Stores Inc with May Department Stores valued at 16.5 bil. USD
in 2005[7] - now Macy's, and the merger between Kmart Holding Corp and Sears
Roebuck & Co with a value of 10.9 bil. USD in 2004.

Bibliography
• Krafft, Manfred; Mantrala, Murali K. (eds.) (2006). Retailing in the 21st century:
current and future trends. New York: Springer Verlag. ISBN 3540283994.