What is Retail

Retail is sale that occurs when a business sells its service or product to an individual consumer. It can occur through a number of different sales channels which could be online, direct sales, mail or in a brick-and-mortar storefront.

Different kinds of Retail Businesses

There are a large number of retail establishments across the world, from salons to gas stations and restaurants to stores.

There are four kinds of retailers; they come under these categories, food, consumables, hard goods and softliners.

Different types of retail stores exist within these categories, the ones that are most common are: the department stores. It is mostly the largest and oldest place where shopping is done under one roof for a variety of products. The best example to be cited is Target and Macy’s. The discount stores are outlets where discounted items and lower priced brands are stocked. The best examples are K-mart and Wal-mart. The local storefronts and corner stores, which are smaller in size and run by individuals, popularly known as Mom-and-Pop stores are often niche stores. The Big Box Store that specializes in selling one type of product, such as electronics. Some of the best examples are Beyond and Best Buy. Another common type is the Warehouse stores that require one to be a member in order to access their low prices. Costco is an example. The internet holds its ground in retail with the E-tailers. It refers to the retailers that sell online, delivering their products to the consumer’s doorstep. These e-tailers do not have physical stores, Amazon is an example. 

Inner Working of Retail Industry

The retail supply chain constitutes the activities of the manufacturer, wholesaler, retailer, and the consumer.  The retail process begins with the products being sold by the manufacturers to the wholesaler. In the next step, these products are sold by the wholesaler to the retailer, and then the retailer resells these products to the end consumer. At all these link-ups, the selling-buying activity takes place.  For each step within a chain, a specific profit margin is associated. Before the product is sold, the cost of making a product is calculated by the manufacturer and a profit percentage is added.  The profit percentage is added by the wholesalers to the amount they paid for the products. Finally, the consumer buys the product from the retailer who adds his own profit margin to the cost of the product. 

In a retail sale, the sale is completed, when traditionally the retail stores would have their customer bring purchases to a cash register and subsequent tallying of the cost. This principle has undergone a subtle improvement with the online buying and supermarkets that have self-check-out lanes.

Significance of Retail

The significance of retail is evident from the supply chain, because the final ‘selling-buying’ activity is between the retailers and the consumers. Retailing helps the manufacturers in focusing on the core competence—manufacturing of the product rather than chasing the end users to buy the product.

Retailers make buying a product an easy process for the customers. This explains the need for sales people, the customer service instant chat pop-ups on websites, and the photos, descriptions, toll free numbers found in catalogs. 

On a whole retailers gives the customer needed service by providing the product asked for.