Retailing

Retailing 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.^[1] 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.

Contents 1 Etymology 2 Types of retail outlets 3 Retail pricing 4 Transfer mechanism 5 Second hand retail 6 Sales techniques 7 Customer service 8 Retail Sales 9 Bibliography 10 See also 11 Notes 12 External links

Etymology

Retail comes from the French word retailler, which refers to "cutting off, clip and divide" in terms of tailoring (1365). It first was recorded as a noun with the meaning of a "sale in small quantities" in 1433 (French). Its literal meaning for retail was to "cut off, shred, paring".^[2] Like the French, the word retail in both Dutch and German (detailhandel and Einzelhandel respectively), also refers to the sale of small quantities of items.

Types of retail outlets

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

There are the following types of retailers by marketing strategy:

• Supermarkets - sell mostly food products;
• Department stores - very large stores offering a huge assortment of "soft" and "hard goods";
• Discount stores - tend to offer a wide array of products and services, but they compete mainly on price;
• General merchandise store - a hybrid between a department store and discount store;
• Warehouse store - low-cost, often high-quantity goods piled on pallets or steel shelves; warehouse clubs charge a membership fee;
• Variety store or "dollar store" - extremely low-cost goods, with limited selection;
• Demographic - retailers that aim at one particular segment (e.g., high-end retailers focusing on wealthy individuals).

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:

• General store - a store which sells most goods needed, typically in a rural area;
• Convenience store - a small store often with extended hours, stocking everyday or roadside items;
• Big-box stores encompass larger department, discount, general merchandise, and warehouse stores.

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 or students.

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.
• Delivery (commerce), 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, has become more common since the 1920s.

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 pawnshop, 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

According to the book "Discovery-Based Retail"^[3] customer service is the "sum of acts and elements that allow consumers to receive what they need or desire from your retail establishment."

Retail Sales

The Retail Sales report is published every month. It's a measure of the consumer spending, an important indicator of the US GDP. Retail firms provide data on dollar value of their retail sales and inventories. 12000 firms in the final survey and 5000 in the advanced one. The advanced estimated data is based on a sub sample from the US CB complete retail & food services sample.^[4]

It's been published by the US Census Bureau since 1951.

Bibliography

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

See also

Notes

External links

• Investopedia.The Industry Handbook: The Retailing Industry