Retail

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Retail
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"Retail stores" redirects here. For the comic strip by Norm Feuti, see Retail (comic strip).
Retail
Macys dep store.JPG

Retail is the sale of goods and services from individuals or businesses to the end-user. Retailers are part of an integrated system called the supply chain. A retailer purchases goods or products in large quantities from manufacturers directly or through a wholesale, and then sells smaller quantities to the consumer for a profit. Retailing can be done in either fixed locations like stores or markets, door-to-door or by delivery. In the 2000s, an increasing amount of retailing is done using online websites, electronic payment, and then delivered via a courier or via other services.

Retailing includes subordinated services, such as delivery. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as for the public. Shops may be on residential streets, 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.

Etymology[edit]

Retail comes from the Old French word tailler,which means "to cut off, clip, pare, divide" in terms of tailoring (1365). It was first recorded as a noun with the meaning of a "sale in small quantities" in 1433 (from the Middle French retail, "piece cut off, shred, scrap, paring").[1] Like in French, the word retail in both Dutch and German also refers to the sale of small quantities of items.

Types of retail outlets[edit]

Inside a supermarket in Russia
Walnut Market in Katra, Jammu & Kashmir, India

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 stores. 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.Most of these stores are called high street stores. Gradually high street stores are being re-grouped at one location called Malls. These are more defined and planned spaces for retail stores and Brands.

Types by products[edit]

Retail is usually classified by type of products as follows:

Types by marketing strategy[edit]

There are the following types of retailers by marketing strategy:

Department store

Department stores are very large stores offering a huge assortment of "soft" and "hard goods; often bear a resemblance to a collection of specialty stores. A retailer of such store carries variety of categories and has broad assortment at average price. They offer considerable customer service.

Discount store

Discount stores tend to offer a wide array of products and services, but they compete mainly on price offers extensive assortment of merchandise at affordable and cut-rate prices. Normally, retailers sell less fashion-oriented brands.

Warehouse store

Warehouses that offer low-cost, often high-quantity goods piled on pallets or steel shelves; warehouse clubs charge a membership fee.

Variety store

Variety stores offer extremely low-cost goods, with limited selection.

Demographic

Retailers that aim at one particular segment (e.g., high-end retailers focusing on wealthy individuals).

Mom-And-Pop

A small retail outlet owned and operated by an individual or family. Focuses on a relatively limited and selective set of products.

Specialty store

A specialty (BE: speciality) store has a narrow marketing focus - either specializing on specific merchandise, such as toys, shoes, or clothing, or on a target audience, such as children, tourists, or oversize women.[5] Size of store varies - some specialty stores might be retail giants such as Toys "R" Us, Foot Locker, and The Body Shop, while others might be small, individual shops such as Nutters of Savile Row.[5] Such stores, regardless of size, tend to have a greater depth of the specialist stock than general stores, and generally offer specialist product knowledge valued by the consumer. Pricing is usually not the priority when consumers are deciding upon a specialty store; factors such as branding image, selection choice, and purchasing assistance are seen as important.[5] They differ from department stores and supermarkets which carry a wide range of merchandise.[6]

Boutique

Boutique or concept stores are similar to specialty stores. Concept stores are very small in size, and only ever stock one brand. They are run by the brand that controls them. An example of brand that distributes largely through their own widely distributed concept stores is L'OCCITANE en Provence. The limited size and offering of L'OCCITANE's stores are too small to be considered a specialty store proper.

General store

A general store is a rural store that supplies the main needs for the local community;

Convenience store

A convenience store provides limited amount of merchandise at more than average prices with a speedy checkout. This store is ideal for emergency and immediate purchases as it often works with extended hours, stocking everyday;

Hypermarkets

Provides variety and huge volumes of exclusive merchandise at low margins. The operating cost is comparatively less than other retail formats.

Supermarket

A supermarket is a self-service store consisting mainly of grocery and limited products on non food items. They may adopt a Hi-Lo or an EDLP strategy for pricing. The supermarkets can be anywhere between 20,000 and 40,000 square feet (3,700 m2). Example: SPAR supermarket.

Mall

A shopping mall has a range of retail shops at a single outlet. They can include products, food and entertainment under one roof. Malls provide 7% of retail revenue in India, 10% in Vietnam, 25% in China, 28% in Indonesia, 39% in the Philippines, and 45% in Thailand.[7]

"Category killer" or specialist

By supplying wide assortment in a single category for lower prices a category killer retailer can "kill" that category for other retailers. For few categories, such as electronics, the products are displayed at the centre of the store and sales person will be available to address customer queries and give suggestions when required. Other retail format stores are forced to reduce the prices if a category specialist retail store is present in the vicinity.

E-tailer

The customer can shop and order through the internet and the merchandise is dropped at the customer's doorstep or an e-tailer. Here the retailers use drop shipping technique. They accept the payment for the product but the customer receives the product directly from the manufacturer or a wholesaler. This format is ideal for customers who do not want to travel to retail stores and are interested in home shopping. However, it is important for the customer to be wary about defective products and non secure credit card transaction. Examples include Amazon.com, Pennyful, and eBay.

Vending machine

A vending machine is an automated piece of equipment wherein customers can drop the money in the machine and acquire the products. Some stores take a no frills approach, while others are "mid-range" or "high end", depending on what income level they target.

Other types[edit]

Other types of retail store include:

Retailers can opt for a format as each provides different retail mix to its customers based on their customer demographics, lifestyle and purchase behaviour. A good format will lend a hand to display products well and entice the target customers to spawn sales.

Global top five retailers[edit]

Worldwide Top Five Retailers[8]
Retail Sales RankCompanyCountry of Origin2013/14 group revenue (US $mil)
1WalmartUSDecrease $464,162
2TescoUKIncrease $120,052
3CostcoUSIncrease$105,156
4CarrefourFranceIncrease $103,555
5KrogerUSDecrease $96,751

Operations[edit]

Retail pricing[edit]

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, students, or senior citizens.

Competition[edit]

Retail stores may or may not have competitors close enough to affect their pricing, product availability, and other operations. A 2006 survey found that only 38% of retail stores in India believed they faced more than slight competition.[9] Competition also affected less than half of retail stores in Kazakhstan, Bulgaria, and Azerbaijan. In all countries the main competition was domestic, not foreign.[10]

Country % of Retail Stores Facing Competition [10]
India38%
Kazakhstan44%
Bulgaria46%
Azerbaijan48%
Uzbekistan58%
Armenia58%
Georgia59%
Kyrgyzstan59%
Russia62%
Belarus64%
Croatia68%
Romania68%
Ukraine72%
Turkey73%
Serbia74%
Tajikistan74%
Slovenia77%
Latvia78%
Bosnia and Herzegovina79%
Moldova79%
Czech Republic80%
Slovakia80%
Poland83%
Hungary87%
Estonia88%
Lithuania88%
Macedonia88%
Albania89%

Retail trade provides 9% of all jobs in India and 14% of GDP.[9]

Staffing[edit]

Because patronage at a retail outlet varies, flexibility in scheduling is desirable. Employee scheduling software is sold, which, using known patterns of customer patronage, more or less reliably predicts the need for staffing for various functions at times of the year, day of the month or week, and time of day. Usually needs vary widely. Conforming staff utilization to staffing needs requires a flexible workforce which is available when needed but does not have to be paid when they are not, part-time workers; as of 2012 70% of retail workers in the United States were part-time. This may result in financial problems for the workers, who while they are required to be available at all times if their work hours are to be maximized, may not have sufficient income to meet their family and other obligations.[11]

Transfer mechanisms[edit]

There are several ways in which consumers can receive goods from a retailer:

Second-hand retail[edit]

See also: Charity shop

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.

Challenges[edit]

To achieve and maintain a foothold in an existing market, a prospective retail establishment must overcome the following hurdles:

Sales techniques[edit]

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[edit]

Customer service is the "sum of acts and elements that allow consumers to receive what they need or desire from your retail establishment." It is important for a sales associate to greet the customer and make himself available to help the customer find whatever he needs. When a customer enters the store, it is important that the sales associate does everything in his power to make the customer feel welcomed, important, and make sure he leaves the store satisfied. Giving the customer full, undivided attention and helping him find what he is looking for will contribute to the customer's satisfaction.[12] For retail store owners, it is extremely important to train yourself and your staff to provide excellent customer service skills. By providing excellent customer service, you build a good relationship with the customer and eventually will attract more new customers and turn them into regular customers. Looking at long term perspectives, excellent customer skills give your retail business a good ongoing reputation and competitive advantage.[13]

Statistics for national retail sales[edit]

United States[edit]

The United States retail sector features the largest number of large, lucrative retailers in the world. A 2012 Deloitte report published in STORES magazine indicated that of the world's top 250 largest retailers by retail sales revenue in fiscal year 2010, 32% of those retailers were based in the United States, and those 32% accounted for 41% of the total retail sales revenue of the top 250.[14]

U.S. Monthly Retail Sales, 1992–2010

Since 1951, the U.S. Census Bureau has published the Retail Sales report every month. It is a measure of consumer spending, an important indicator of the US GDP. Retail firms provide data on the dollar value of their retail sales and inventories. A sample of 12,000 firms is included in the final survey and 5,000 in the advanced one. The advanced estimated data is based on a subsample from the US CB complete retail & food services sample.[15]

CE region[edit]

In 2011 the grocery market in six Central European (CE) countries was worth nearly €107bn, 2.8% more than the previous year when expressed in local currencies. The increase was generated foremost by the discount stores and supermarket segments, and was driven by the skyrocketing prices of foodstuffs. This information is based on the latest PMR report entitled Grocery retail in Central Europe 2012[16]


World[edit]

National accounts show a combined total of retail and wholesale trade, with hotels and restaurants. in 2012 the sector provides over a fifth of GDP in tourist-oriented island economies, as well as in other major countries such as Brazil, Pakistan, Russia and Spain. In all four of the latter countries, this fraction is an increase over 1970, but there are other countries where the sector has declined since 1970, sometimes in absolute terms, where other sectors have replaced its role in the economy. In the United States the sector has declined from 19% of GDP to 14%, though it has risen in absolute terms from $4,500 to $7,400 per capita per year. In China the sector has grown from 7.3% to 11.5%, and in India even more, from 8.4% to 18.7%.


Retail Trade, Wholesale, Hotels and Restaurants (UN Data)[17]
EconomyAs % of GDP, 1970As % of GDP, 20121970 Value per Capita (2012 Prices)2012 Value per Capita
Afghanistan13.18.4$140$58
Albania11.522.5$188$858
Algeria17.311.9$572$639
Andorra40.526.5$17,532$10,915
Angola12.615.0$513$839
Anguilla33.927.8$2,166$5,577
Antigua and Barbuda26.426.8$1,081$3,540
Argentina15.415.7$1,041$1,825
Armenia15.2$510
Aruba26.919.1$1,140$4,757
Australia11.411.7$3,736$7,960
Austria17.418.8$3,281$8,782
Azerbaijan9.0$668
Bahamas28.024.5$5,335$5,299
Bahrain12.56.4$3,046$1,478
Bangladesh15.915.1$61$124
Barbados26.124.3$2,879$3,890
Belarus16.8$1,127
Belgium12.914.2$2,606$6,189
Belize17.020.3$297$972
Benin17.717.4$89$131
Bermuda17.611.2$8,907$9,648
Bhutan8.28.2$30$205
Bolivia9.111.1$168$286
Bosnia and Herzegovina17.9$807
Botswana9.216.8$60$1,206
Brazil16.421.3$756$2,413
British Virgin Islands19.727.2$2,178$8,821
Brunei Darussalam1.03.7$495$1,536
Bulgaria14.613.8$272$966
Burkina Faso14.914.2$46$92
Burundi8.118.9$16$43
Cambodia16.614.5$86$137
Cameroon27.020.4$270$245
Canada13.613.0$3,586$6,788
Cabo Verde24.518.7$269$718
Cayman Islands12.012.2$3,544$7,175
Central African Republic14.013.5$100$65
Chad20.512.6$122$103
Chile14.911.7$780$1,801
China7.311.5$20$700
China: Hong Kong SAR19.129.3$1,197$10,772
China: Macao SAR8.014.9$592$11,629
Colombia13.012.4$439$959
Comoros26.214.5$232$125
Congo13.25.4$256$185
Cook Islands13.739.6$1,069$5,912
Costa Rica19.916.3$805$1,531
Côte d'Ivoire21.714.7$353$181
Croatia15.4$2,012
Cuba18.415.2$432$959
Cyprus13.618.8$958$4,975
Czech Republic13.2$2,429
Czechoslovakia (Former)8.0$127
Korea, North D.P.R.11.718.3$231$107
Democratic Republic of the Congo
Denmark20.515.5$6,169$8,708
Djibouti45.018.6$1,470$294
Dominica9.615.0$163$1,046
Dominican Republic17.218.7$270$1,073
Ecuador8.312.6$195$713
Egypt11.014.4$75$454
El Salvador22.621.2$534$804
Equatorial Guinea6.40.9$56$185
Eritrea19.4$98
Estonia14.0$2,432
Ethiopia18.6$84
Ethiopia (Former)8.4
Fiji8.318.6$216$848
Finland12.313.3$2,268$6,103
France14.815.0$2,969$5,933
French Polynesia14.716.1$2,142$4,212
Gabon28.112.1$2,918$1,787
Gambia27.128.8$143$147
Georgia18.9$685
Germany12.211.4$2,273$4,736
Ghana5.310.9$58$175
Greece19.620.2$2,469$4,527
Greenland14.010.5$2,219$4,326
Grenada18.212.3$294$913
Guatemala17.521.6$385$720
Guinea34.016.2$132$86
Guinea-Bissau20.719.4$124$99
Guyana18.915.1$388$543
Haiti17.418.4$168$130
Honduras17.217.1$247$399
Hungary9.814.1$531$1,760
Iceland11.311.0$1,873$4,585
India8.418.7$31$283
Indonesia17.713.9$120$494
Iran (Islamic Republic of)10.611.6$473$834
Iraq8.26.4$215$290
Ireland17.618.0$2,293$8,295
Israel9.810.0$1,346$3,145
Italy16.015.0$2,755$4,963
Jamaica19.422.4$1,056$1,197
Japan15.613.9$3,004$6,525
Jordan17.910.1$478$445
Kazakhstan16.8$2,086
Kenya6.813.2$49$125
Kiribati12.48.6$439$150
Kosovo18.1$508
Kuwait8.33.2$13,693$1,797
Kyrgyzstan19.7$233
Laos People's DR14.220.3$44$278
Latvia17.9$2,467
Lebanon31.427.6$2,829$2,522
Lesotho13.09.0$46$108
Liberia11.15.0$106$18
Libya2.84.9$543$763
Liechtenstein19.917.8$12,763$28,361
Lithuania19.9$2,782
Luxembourg13.813.4$5,010$14,141
Madagascar8.711.0$70$49
Malawi3.719.8$10$70
Malaysia12.416.5$229$1,716
Maldives29.830.8$252$2,373
Mali7.316.2$23$112
Malta28.715.8$1,104$3,238
Marshall Islands24.516.1$531$607
Mauritania2.17.1$20$72
Mauritius10.019.3$167$1,782
Mexico19.317.8$1,063$1,739
Micronesia13.115.1$219$477
Monaco39.130.3$34,091$46,027
Mongolia21.411.9$237$439
Montenegro22.6$1,475
Montserrat19.47.6$1,051$974
Morocco22.512.4$253$365
Mozambique12.717.6$31$102
Myanmar25.920.1$48$226
Namibia8.014.7$326$832
Nauru14.816.8$7,812$2,014
Nepal4.715.4$14$101
Netherlands16.415.8$3,702$7,283
Netherlands Antilles16.418.2$1,417$3,349
New Caledonia34.713.3$9,624$5,169
New Zealand15.512.2$3,607$4,689
Nicaragua15.316.5$352$289
Niger10.614.1$71$56
Nigeria14.615.9$148$247
Norway16.78.5$6,109$8,521
Oman1.77.7$111$1,822
Pakistan18.820.6$99$248
Palau16.331.2$1,565$3,200
Panama16.819.6$497$1,864
Papua New Guinea13.99.3$243$204
Paraguay18.319.9$304$771
Peru14.218.6$583$1,271
Philippines10.719.4$153$501
Poland9.220.2$398$2,590
Portugal13.719.6$1,119$3,926
Puerto Rico16.79.4$2,024$2,635
Qatar5.05.6$5,647$5,208
Korea, South17.111.8$345$2,712
Moldova17.8$367
Romania3.17.1$73$557
Russian Federation20.7$2,934
Rwanda9.915.7$35$97
Saint Kitts and Nevis8.412.6$256$1,800
Saint Lucia20.623.4$527$1,707
Samoa14.823.6$312$851
San Marino15.812.9$5,282$7,643
Sao Tome and Principe25.526.2$273$363
Saudi Arabia4.68.2$799$2,067
Senegal22.720.4$218$207
Serbia11.0$582
Seychelles32.729.4$1,039$3,285
Sierra Leone12.97.6$93$55
Singapore27.819.5$2,008$10,179
Slovakia26.6$4,470
Slovenia14.4$3,155
Solomon Islands10.210.5$121$193
Somalia9.310.6$21$14
South Africa14.416.0$847$1,171
South Sudan15.4$143
Spain15.121.4$1,956$6,060
Sri Lanka14.520.8$94$586
St. Vincent and the Grenadines12.616.5$231$1,045
State of Palestine16.718.4$136$448
Sudan16.8$232
Sudan (Former)16.8$0
Suriname18.323.3$915$2,183
Swaziland15.59.8$197$306
Sweden12.112.8$3,315$7,056
Switzerland19.917.8$10,641$14,080
Syrian Arab Republic20.422.7$184$482
Tajikistan20.3$193
TFYR of Macedonia16.5$749
Thailand24.318.0$239$1,039
Timor-Leste4.0$195
Togo23.58.2$195$49
Tonga12.714.6$214$646
Trinidad and Tobago18.917.1$1,323$2,966
Tunisia11.713.5$147$558
Turkey11.116.5$437$1,757
Turkmenistan4.2$274
Turks and Caicos Islands38.238.0$1,557$8,520
Tuvalu9.511.2$182$451
Tanzania: Mainland, see also Zanzibar15.015.8$51$96
Uganda11.822.3$50$133
Ukraine17.5$679
United Arab Emirates15.412.1$24,122$5,024
United Kingdom15.316.5$2,662$6,490
United States19.014.5$4,488$7,436
Uruguay12.916.5$810$2,419
USSR (Former)8.1
Uzbekistan9.9$178
Vanuatu18.221.4$266$651
Venezuela9.516.4$1,152$2,099
Viet Nam12.916.8$39$289
Yemen16.3$224
Yemen Arab Republic (Former)13.7
Yemen Democratic (Former)21.2
Yugoslavia (Former)10.4
Zambia12.615.0$244$229
Zanzibar18.2$119
Zimbabwe14.910.7$125$77

Consolidation[edit]

Among retailers and retails chains a lot of consolidation has appeared over the last couple of decades. Between 1988 and 2010, worldwide 40,788 mergers & acquisitions with a total known value of 2.255 trillion USD have been announced.[18] The largest transactions with involvement of retailers in/from the United States have been: the acquisition of Albertson's Inc. for 17 bil. USD in 2006,[19] the merger between Federated Department Stores Inc with May Department Stores valued at 16.5 bil. USD in 2005[20] - now Macy's, and the merger between Kmart Holding Corp and Sears Roebuck & Co with a value of 10.9 bil. USD in 2004.[21]

See also[edit]

Types of store or shop:

Further reading[edit]

References[edit]

  1. ^ Harper, Douglas. "retail". Online Etymology Dictionary. Retrieved 2008-03-16. 
  2. ^ "hard goods". Investor Words. Retrieved 22 May 2014. 
  3. ^ Ferrara, J. Susan. "The World of Retail: Hardlines vs. Softlines". Value Line. Retrieved 22 May 2014. 
  4. ^ Time, Forest. "What Is Soft Merchandising?". Houston Chronicle. Retrieved 22 May 2014. 
  5. ^ a b c Charles Lamb, Joe Hair, Carl McDaniel (14 Jan 2008). Essentials of Marketing. Cengage Learning. p. 363. 
  6. ^ William M Pride, Robert James Hughes, Jack R. Kapoor (2011). Business. Cengage Learning. ISBN 978-0538478083. 
  7. ^ Retail Realty in India: Evolution and Potential. Jones Lang LaSalle. 2014. p. 6. 
  8. ^ "2013 Top 250 Global Retailers". Retrieved March 2014. 
  9. ^ a b Mohammad Amin (2007). Competition and Labor Productivity in India’s Retail Stores, p.1. World Bank. p. 57. 
  10. ^ a b Mohammad Amin (2007). Competition and Labor Productivity in India’s Retail Stores, p.30. World Bank. p. 57. 
  11. ^ Steven Greenhouse (October 27, 2012). "A Part-Time Life, as Hours Shrink and Shift". The New York Times. Retrieved October 28, 2012. 
  12. ^ Philip H. Mitchell 2008, Discovery-Based Retail, Bascom Hill Publishing Group ISBN 978-0-9798467-9-3
  13. ^ How to provide excellent customer service in retailCustomer Service: Facts, Quotes and Statistics
  14. ^ Deloitte, Switching Channels: Global Powers of Retailing 2012, STORES, January 2012, G20.
  15. ^ US Census Bureau Retail sales Retail SalesRetail Sales Definition
  16. ^ Grocery retail in Central Europe 2012 Retail in Central Europe
  17. ^ "UN National Accounts Main Aggregates Database". UN Statistics Division. December 2013. Retrieved 16 May 2014. 
  18. ^ [full citation needed] "Statistics on Mergers & Acquisitions (M&A) - M&A Courses | Company Valuation Courses | Mergers & Acquisitions Courses". Imaa-institute.org. Retrieved 2012-11-02. 
  19. ^ "SuperValu-CVS group buys Albertson's for $17B". Phoenix Business Journal. January 2006. Retrieved 9 July 2014. 
  20. ^ [full citation needed] "Press Release - Investor Relations - Macy's Inc". Phx.corporate-ir.net. Retrieved 2012-11-02. 
  21. ^ [full citation needed] "Sears Holdings Press Releases". Searsholdings.com. Retrieved 2012-11-02. 

External links[edit]