Retail

Retail refers to the process of selling goods and services directly to end users or consumers from a single point. Those who are engaged in this type of selling are called retailers, who take up products in large amounts to sell them further to customers in smaller quantities. It is a significant stage of the buying and selling process as it ensures the manufactured goods reach their ultimate users, i.e., the consumers.

Proper retail management involves connecting manufacturers and consumers with wholesalers, which is also one of the channels in the process. Unlike retailers, wholesalers deal in huge quantities of products, and they sell them to small retail units to be further sold to consumers. Retailing, therefore, is a marketing strategy that facilitates the targeting process and makes sure it reaches the intended groups.

Retail is an activity that involves the sale of goods and services directly to end users or consumers. A retailer is an individual or unit where users buy products. Typically, retailers don't produce their own goods. They buy products from a manufacturer or a wholesaler and then offer them in small quantities to customers. This distribution of the products or services to consumers is known as retailing.

The primary goal of retailing is to make manufactured goods or services available to consumers at their convenience. Customers do pay for this. The activity primarily concerns distribution, making goods and services available to a vast majority of people within a region. As a result, when companies decide on their marketing strategy, this reachability factor becomes prime. The system might seem simple but is quite complex, given the entire process involved, including the distribution. 

Distribution, here, does not mean delivering the products closer to consumers. Instead, it involves deciding on the product ranges and quantities to be made available according to the consumption levels of the end users. Although they generally sell goods and services in person, some products may also be purchased via the Internet or phone and delivered to the consumer. Textile, medicine, grocery, food products, and convenience shops are a few examples of retail establishments.

The retail sector is usually divided into two major categories: in-store retailing and out-of-store retailing. The most significant classifications of in-store retailing include those based on the form of the merchandise, ownership, price, and sometimes place. 

• The ownership-based classification includes leased department stores, independent stores, chain stores, and franchises. 
• A merchandise-based classification includes convenience stores, department stores, superstores, supermarkets, specialized stores, and retailer services. 
• Price-based categorization includes discount shops, hypermarkets, off-price shops, warehouse clubs, etc. 
• One more rarely-talked-about type is the place-based classification, which includes shopping malls of concerned areas. 

On the other hand, in out-of-store retailing, the most significant forms of retailing are automatic vending machine sales, direct selling, and direct marketing.

Let us consider the following instances to understand the concept better:

Example #1

ABC is a retail unit that serves the demands of the consumers by making the products and services easily accessible and available to them. It deals in a variety of products, including groceries, confectioneries, clothes, etc. In its retail process, the firm buys a huge volume of items from the manufacturer and a few wholesalers to meet the vast demand of its consumer base. As soon as it receives the products from the other channels, it distributes them to different units under its label, including malls and supermarkets. This way, through its multiple units, it gets an opportunity to serve the needs of a more significant number of consumers simultaneously.

Example #2

A recent report published in April 2024 reflected the rise in retail sales in March, depicting a significant increase in the figures. The numbers were surprising as it was a more than expected rise, given the inflation, which could hardly impact consumers' desire to shop and buy more and more. The retail sales were 0.7% more than the expected figures for March. Such a performance towards the closing quarter gave a sigh of relief to the market as the quarter would have closed on a mediocre note otherwise.