What is Retail?
Retail is the process where small quantities of goods (or services) are sold directly to the consumer for their use. It is termed as the final distribution channel that performs the activity of providing service of making the required quantity of commodities available to the consumers in a very suitable way. The Retail sector is categorized as a major element of the service sector. The basic function of retailing is to Break the scale.
There are 2 key contents in the above-mentioned description of Retail that differentiates between Retailing and Wholesaling.
Ø Small quantities of goods/ services are sold: The number of goods involved in a retail transaction is very less as compared to wholesale business dealing
Ø Directly to the consumer: Retail stores are the last channels of distribution where the actual sales to the customer happen.
Retail Sector includes retailing and retailer
Retailing is the process of procuring the goods and services (either from the manufacturer, wholesaler, or its agents) and selling them to the consumers for effective utilization. Simply, retailing is the arrangement of small quantities of goods between a retailer and the consumer for the consumption purpose not for the resale purpose. Retailing is important for the originator, customers, as well as the economy.
A retailer is an individual or a business concern who sells small quantities of goods to the customers for the actual use.
Key points to remember
- Retail is a channel of distribution,
- Retailing is a business process,
- The Retailer is an individual or business concern.
The places where actual sales take place is called the Retail store. The place acts as a marketing mechanism for the brands and a support tool for the customers, where both can exchange and communicate relevant information.
The Key consideration for retail
The key consideration for retail is to choose the best location. It is important to locate your business in the right place. Further, Retail is all about providing the appropriate product at the right place and the right time and also at the right price. However, if the person locates the business at the wrong place, relocates the business for the wrong reasons, then an individual is running a real risk of balancing the retail business in the future. In the retail business, the product can be modified and developed, the price can be revised through the promotional approach.
Here are some of the key factors that need to be considered while entering the retail sector.
- Analyzing the trade areas
- To identify the potentially profitable and growing locations for opening new retail stores
- Deciding the appropriate infrastructure for the business
- How can the person optimize the network?
- Choosing the right pricing policies.
- Reach of the customer.
Advantages of having Retail business
Retail is the most direct form of business between the merchant and the customer. Retailing provides a facility to have face-to-face interaction. Consumers rely on retail outlets for their needed goods. However, today’s era is the era of technology, now people use to purchase goods from online platforms. There are various advantages of having a retail business
In retail selling, customer’s empathy benefits both a buyer and a seller. Retail outlets provide a platform where a customer can see what they are buying as opposed to online stores. The customer gets instant satisfaction and the customer move off with their purchases immediately. In the retails sector the staff also plays a major role in building customer loyalty with the assurance that customers return often. From a business point of view, retail outlets allow you to reach a customer base that might defer by the online marketplace.
Greater supply Options
Retail sales provide you with greater supply options because not all commodities are available in the wholesale market under one roof. As a seller, the person can promote the offerings on his terms and can revert the customers on an instant basis.
Greater Business opportunities
Through retail selling, u can sell a variety of goods and disclose the items to its customer with which they are not even aware. For example, a customer might enter the store looking for a specific item, but then wind up purchasing other things also. By strengthening a variety of commodities in one central location, helps in greater business opportunities, and increases the sales potential.
The retail stores spare the customer from paying the shipping costs. Retail business results in fewer complexities like lost packages, fewer customer grievances, and complicated online sales process.
Segments of Retail Industry and its classification
What are the types of Retailing?
Store retailing includes various types of retail stores like Divisional/department stores, speciality stores, grocery markets, utility stores, catalogue showrooms, Medical stores, High-value stores, etc.
Non-store retailing is a type of retailing where the transaction happens outside the retail stores. Non-store retailing is divided into two types – direct method of selling (where the corporates use direct methods like door-to-door selling) and Mechanized vending.
Company retailing means retailing through corporate channels like chain shops, franchises, and commodities mix. Company retailing focuses on retailing goods of only the parent or partner brand.
online retailing also termed as Internet retailing which works on a similar concept of selling small quantities of goods to the customers ultimately. However, online selling serves a larger market and does not possess a physical retail outlet where the customer can go and try the product.
Retailing not only includes selling of tangible goods, but it also offers services. When a retailer deals with services, the process is called retailing of services. Restaurant services are examples of service retailing.
What are the tools of retailing?
Retailing plays an important role in merchandise advertisement and publicity, as Retailing is directly associated with the consumer. A successful retailing process helps in attracting customers by providing good recipience, good amenities, and individual attention. However, a retailer follows a variety of tools for promoting its retail business.
Below mentioned are some of the tools used by the retailers for promoting their business are listed below:
Carrying promotional activities
Retailers from an association dealing in the same merchandise jointly carry promotional activities to provide proper information and running offers to the customers.
Proper pricing of the products
Retailers do proper pricing of the products by placing price tags on each of the products by specifying all the required information such as the date of manufacture, size, quantity, name of the manufacturer, date of manufacturing and expiry.
Retailers help their customer in re-chasing the products by sending them regular reminders and catalogues of the products.
Retailers also introduce discount offers by offering seasonal sales for business promotion.
Consumers enjoy the facility of replacing or swap the damaged or distorted goods without paying the additional cost.
Besides the above-mentioned services, Retailers provide many pre- and after-sales services to the customers which ultimately build trust towards the retailer. The pre-sale services include accepting the orders online, Proper store advertisement, ease of consumer while buying the products, trial rooms, Happy shopping hours and also customer entertainment
The retailers also provide after-sales services to customers like-Doorstep delivery, gift packaging, replacement and exchanges, Alteration for free of cost, and free installation and demonstrations.
How Enterslice help its client in the Retail sector?
Enterslice offers consultancy and services in the field of supply chain & logistics which helps its clients in achieving a strategic position of standpoint in the present competitive business environment.
Enterslice is specialized in providing audit services like Business audit, compliance audit, fixed asset audit, and warehouse audit to retailers across the country.