Structure of The Retail Industry

STRUCTURE OF THE
RETAIL INDUSTRY
RETAIL IS the sale of goods to end users, not
for resale, but for use and consumption by
the purchaser.
Retail involves the sale of merchandise from
a single point of purchase directly to a
customer who intends to use that product.
The single point of purchase could be a brick-
and-mortar retail store, an Internet shopping
website, a catalog, or even a mobile phone.
Definition, Types, and Examples of Retail

Retail is the final channel of distribution where
small quantities of goods (or services) are sold
directly to the consumer for their own use.
Two key-phrases in this definition that separate
retail from wholesale are –
Small quantities of goods: Unlike
manufacturing or wholesale, the number of goods
involved in a retail transaction is very less.
Directly to the consumer: Retail stores are the
last channels of distribution where the actual sales
to the customer happen.
What Is Retail?
Retailing is the distribution process of
retailer getting the goods (either from the
manufacturer, wholesaler, or agents) and
selling them to the customers for the actual
use.
In simple terms, retailing is the transaction
of small quantities of goods between a
retailer and the customer where the good is
not bought for the resale purpose.
What Is Retailing?
A retailer is a person or a business who
sells small quantities of goods to the
customers for the actual use.
Remember –
Retail is a channel of distribution
Retailing is a business process
Retailer is a business or person
What is A Retailer?
Retailing is important for the creators, customers,
as well as the economy.
They act as both a marketing tool for the brands
and a support tool for the customers to exchange
and communicate important information.
Besides this, retailing is a
great asset to the economy.
It provides jobs, adds to the GDP, and acts as a
preferred shopping channel during the holiday
season.
Importance Of Retailing
Retail works on a simple revenue model of
mark-up.
The retailers buy the goods at a cost
price, add up the cost of labour,
equipment, and distribution to it along
with the desired profit margin, and sell it
at a higher price.
How Retail Works?

Retailing can be divided into five types. Here are the types of
retailing that exists today –
Store retailing: This includes different types of retail stores
like department stores, speciality stores, supermarkets,
convenience stores, catalogue showrooms, drug stores,
superstores, discount stores, extreme value stores etc.
Non-store retailing: Non-store retailing is a type of
retailing where the transaction happens outside conventional
shops or stores. It is further divided into two types –
 direct selling (where the company uses direct methods like
door-to-door selling) and automated vending (installing
automated vending machines which sell offer variety of
products without the need of a human retailer).
Retailing Types
Corporate retailing: It involves retailing through
corporate channels like chain stores, franchises, and
merchandising conglomerates. Corporate retailing
focuses on retailing goods of only the parent or partner
brand.
Internet retailing: Internet retailing or online retailing
works on a similar concept of selling small quantities of
goods to the final consumer but they serve to a larger
market and doesn’t have a physical retail outlet where
the customer can go and touch or try the product.
Service retailing: Retailers not always sell tangible
goods, retail offerings also consists of services. When a
retailer deals with services, the process is called service
retailing. Restaurants, hotels, bars, etc. are examples of
service retailing.
Department Stores: Sell a wide range of
merchandise that is arranged by category into
different sections of the physical retail space.
Examples of department store retailers include Macy's,
Nordstrom, and JCPenney, to name just a few.
 Grocery Stores and Supermarkets: Sell all types of
food and beverage products, and sometimes also
home products, clothing, and consumer electronics as
well.
 Warehouse Retailers: Large no-frills warehouse-
type facilities stocked with a large variety of products
packaged in large quantities and sold at lower-than-
retail prices.
Specialty Retailers: Specialize in a specific
category of products. Toys ‘R’ Us, Victoria's Secret,
and Nike are examples of specialty retailers.
Convenience Retailer: Usually part of a retail
location which sells gasoline primarily, but also
sells a limited range of grocery merchandise and
auto care products at a premium "convenience"
price from a brick-and-mortar store.
Discount Retailer: Sell a wide variety of products
are often private labeled or generic brands at
below-retail prices.
Retailing can be differentiated from wholesaling or manufacturing
because of its certain distinct characteristics which include –
Direct contact with the customer – Retailing involves direct
contact with the end customer and are a mediator between the
wholesaler and the customer or the manufacturer and the customer
depending upon the distribution channels used.
Relationship with the customers – Retailers form a bond with the
customers and help them decide which products and services they
should choose for themselves.
Stock small quantities of goods – Retailers usually stock small
quantities of goods compared to manufacturers and wholesalers.
Stock goods of different brands – Retailers usually stock different
goods of different brands according to the demand in the market.
Characteristics Of Retailing
Customers’ contact with the company –
Retailers act as the representatives of the
company to the end customers who give their
feedback and suggestions to them.
Have a limited shelf space – Retail stores
usually have very limited shelf space and only
stock goods which have good demand.
Sells the goods at maximum prices – Since
retailing involves selling the products directly to
the customers, it also witnesses the maximum
price of the product.
Characteristics Of Retailing
Sorting
Manufacturers produce large quantities of
similar goods and like to sell their
inventories to few buyers who buy in lots.
Channel Of Communication
Since retail involves direct contact with
the end consumers, it forms a very
important channel of communication for
the companies and manufacturers.
Functions Of Retailing
 Retailing Examples
 The most common examples of retailing are
the traditional brick-and-mortar stores like
Walmart, Best Buy, Aldi, etc.
 It also includes small kiosks at the malls,
online marketplaces like Amazon and eBay,
and even the restaurants which sell food and
service.

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STRUCTURE OF THE

Definition, Types, and Examples of Retail

How Retail Works?

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