Retailing

Retailing

Retailing...• The selling of merchandise and certain services to

the consumer. It ordinarily involves the selling of individual units or small lots to large numbers of customers by a business set up for that specific purpose. In the broadest sense, retailing can be said to have begun the first time one item of value was bartered for another. In the more restricted sense of a specialized, full-time commercial activity, retailing began several thousand years ago when peddlers first began hawking their wares and when the first marketplaces were formed.

Retailing...• Retailing is also the final link between the production of a good and

the end-consumer. The economic characteristics of the end-consumer are thus crucial to the economics of retailing. Typically, the end-consumer can be characterized as being: 

• Small – consumers that the size of a given purchase forms a small part both of the consumer’s total expenditure and of the retailer’s total sales.

•Immobile – consumers that they are often not able or willing to travel long distances in order to purchase the appropriate product); and 

•Uninformed – consumers that they often do not know which products are available where, and what prices; and they may not be able to observe product quality in advance of purchase). 

Importance of Retailing

• Retailing has a tremendous impact on the economy. It involves high annual sales and employment. As a major source of employment retailing offers a wide range of career opportunities including; store management, merchandising and owning a retail business.

Consumers benefit from retailing is that, retailers perform marketing functions that makes it possible for customers to have access to a broad variety of products and services. Retailing also helps to create place, time and possession utilities. A retailer’s service also helps to enhance a product’s image.

Retailing in a way, is the final stage in marketing channels for consumer products. Retailers provide the vital link between producers and ultimate consumers.

Retailers

Retailer• A business or person that sells goods to

the consumer, as opposed to a wholesaler or supplier, who normally sell their goods to another business.

Types of Retailers• Department Store – This type of retailer is often the most complex offering a wide

range of products and can appear as a collection of smaller retail stores managed by one company. The department store retailers offer products at various pricing levels. This type of retailer   adds high levels of customer service by adding convenience enabling a large variety of products to be purchased from one retailer.

• Supermarkets – Generally this type of retailer concentrates in supplying a range of food and beverage products. However many have now diversified and supply products from the home, fashion and electrical products markets too. Supermarkets have significant buying power and therefore often retail goods at low prices.

• Warehouse retailers – This type of retailer is usually situated in retail or Business Park and where premises rents are lower. This enables this type of retailer to stock, display and retail a large variety of good at very competitive prices.

Types of Retailers• Speciality Retailers – Specialising in specific industries or products, this type of

retailer is able to offer the customer expert knowledge and a high level of service. They also add value by offering accessories and additional related products at the same outlet.

• E-tailer – This type of retailer enables customers to shop on-line via the internet and buy products which are then delivered. This type of retailer is highly convenient and is able to supply a wider geographic customer base. E-tailers often have lower rent and overheads so offer very competitive pricing.

• Convenience Retailer – Usually located in residential areas this type of retailer offers a limited range of products at premium prices due to the added value of convenience.

• Discount Retailer – This type of retailer offers a variety of discounted products. They offer low prices on less fashionable branded products from a range of suppliers by reselling end of line and returned goods at discounted prices.

Forms of Ownership

• Independent Retailer

• In independent retailer is one who builds his/her business from the ground up. From the business planning stage to opening day, the independent retail owner does it all. He/she may hire consultants, staff and others to assist in the business endeavor. The opportunities are endless.

• Existing Retail Business

• Someone who inherits or buys an existing business is taking ownership and responsibility of someone else's hard work. The foundation has already been laid.

• Franchise

• Purchasing a franchise is buying the right to use a name, product, concept and business plan. The franchisee will receive a proven business model from an established business.

• Dealership

• Retailers may find the business model of a licensed dealership as a mix of franchise and independent retailer. The licensee has the right (sometimes this is exclusive) to sell a brand of products. Unlike a franchise, the dealer can sell a variety of brands and there generally no fees to the licensor. Dealerships may or may not be identified as an authorized seller or by the company's trademark.

• Network Marketing

• Multi-level marketing (MLM) or network marketing is a business model where the selling of products depends on the people in the network. Not only is a product being sold, but other salespeople are being recruited to sell that same product or product line. It's probably not a type of business one would initially consider when discussing retail businesses, but Amway used this model quite successfully for many years.