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What is Retailing? Various Types & Features

What is Retail?

Retail is the distribution process that includes all activities related to the direct sale of a product to the final consumer or customer (that is, the person who intends to use the product). This includes the sale of goods and services from the point of purchase to the final consumer or customer who uses the product.

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What are Retailers?

Business entities that sell goods to end users other than for business or resale purposes, regardless of how the goods are sold, such as manufacturers, wholesalers, and retailers, are known as retailers. Retailer means an organization that derives the majority of its sales from retail. In the supply chain, retailers are the final link between manufacturers and final consumers.

What is Retailing

What Are The Features of Retailing?

Retailing can be distinguished from wholesale or manufacturing based on certain characteristics such as:

Direct Contact With The Range Of Customers:

Retail involves direct contact with the final customer and acts as an intermediary between wholesalers and customers or manufacturers and customers, depending on the distribution channel used.

Retailers-Customers Relationship:

It helps retailers connect with customers and help them decide which products and services to choose.

Limited Inventory:

Retailers typically carry smaller quantities of goods compared to manufacturers and wholesalers.

Variations in Inventory:

Retailers usually stock different products from different brands according to market demand.

Focal Point of Contact:

Retailers act as representatives of the company to end customers and provide feedback and suggestions.

Limited Storage Space:

Retail stores typically have very limited shelf space and only stock items that are in high demand.

Selling with Profit Margins:

Since the retailer sells products directly to customers, it also determines the maximum price of the product.

What Are The Importance Of Retail Marketing?

The Social & Economic Significance of Retailing are as follows:

Social Responsibility:

Retailing is a socially responsible business. Corporate social responsibility describes a company’s voluntary actions to address the ethical, social, and environmental impacts of its business activities and the concerns of its stakeholders.

Retail Sales:

Retail impacts every aspect of life. Think about how many times you interact with retailers each day when shopping for clothes for dining out, home decor, car repairs, parties, or job interviews.

U.S. retail sales exceeded $3.6 trillion in 2012, but even this level of sales does not include retail sales of automobiles and repairs, thus underestimating the impact of retail.


Retail is also one of the largest industries in the country in terms of employment. More than 25 million people are employed in retail, representing about 18% of the U.S. nonfarm workforce.

Global Retailers:

Retail is becoming a global industry as more and more retailers seek growth by expanding into other countries. Large retailers are becoming increasingly international in their geographic reach.

Companies like Amway, Avon, and Ace Hardware have operations in more than 20 countries.

What are the types of Retail Stores?

Store Retailing:

Department stores are the best form of retail to attract a large number of customers. Other types of retail stores include specialty stores, supermarkets, convenience stores, catalog showrooms, drugstores, superstores, discount stores, and extreme-price stores. Different retailers employ different competitive and pricing strategies.

Non-store Retailing:

From the name itself, it is clear that selling goods outside of traditional stores and stores is called brick-and-mortar retail. They are classified as follows:

Direct Marketing:

In this process, businesses use direct-to-consumer channels to reach out to their customers and offer their products. This includes direct marketing, catalog marketing, telemarketing, online shopping, etc.

Direct Selling:

Direct is also called multi-level selling and network selling, including door-to-door sales and door-to-door marketing. Here, in this process, the company’s seller visits the home of the host who invited an acquaintance, and the seller demonstrates the product and takes the order.

Automatic Vending:

Vending machines are mainly installed in offices, factories, gas stations, large retail stores, restaurants, etc. It offers a variety of products including impulse products such as coffee, candy, newspapers, and soft drinks.

Buying Service:

A retail organization collectively serves a large number of customers, such as An employee of an organization who is authorized to purchase goods from a particular retailer and who has entered into a contract to provide discounts in exchange for membership.

Corporate Retailing:

This includes chain stores, franchises, retailers, retail organizations such as consumer cooperatives, and merchandising conglomerates. The benefits these organizations can achieve together are: For example, economies of scale, better and more capable employees, and broader brand recognition.

Online Retailing:

Internet retail or online retail operates on a similar concept of selling small quantities of goods to the final consumer, but serves a larger market, allowing customers to touch and try the products. They do not have a physical store.

Service Retailing:

Retailers don’t always sell physical goods. Retail products also consist of services. When a retailer trades services, this is called service retail. Restaurants, hotels, and bars are examples of service retail.

With the emergence of new forms of trade, competition among them has also intensified. It is one of the fastest-growing and most challenging industries.

What Are The Functions of Retailing?

Retailers have many important roles in promoting their products. These functions include

Sorting out the Product:

Manufacturers produce similar items in large quantities and are happy to sell them to a small number of buyers who buy their inventory in bulk. Customers want to be able to choose from different types of products from different manufacturers. Retailers balance demand on both sides by collecting goods from various sources, sorting them, and placing them according to customer needs.

Breaking Bulk:

Retailers buy goods in sufficient quantities from manufacturers and wholesalers, but sell smaller quantities to customers.

Channel of Communication:

Trade forms a very important communication channel for businesses and manufacturers as it involves direct contact with the final consumer. Manufacturers try to communicate offers and discounts through deals, not just product benefits.

Retailers also act as intermediaries between businesses and customers, communicating customer feedback to manufacturers or wholesalers.

Product Marketing:

Retail stores are the final channel where real decisions are made. Therefore, it serves as an important marketing channel for brands. Manufacturers implement smart placements, banners, ads, offers, and other strategies to increase retail sales.

To Understand The Customer Needs:

Knowing and understanding customer needs is at the heart of any successful business. Therefore, retailers should have a clear understanding of the needs of their target customers. Every retailer needs to understand why their customers buy from them and not from their competitors. This is known as a unique selling proposition.

Assembling & Buying:

Retailers carry many different types of goods that they purchase from various wholesalers and sell to consumers. They try to find the best and cheapest sources of goods.

Give Credit Facilities to Customers:

S/He meets customer needs, such as delivering goods on credit. He bears the risk of bad debt due to non-payment of amounts by customers.

Introducing New Products & New Brands in the Market:

Without the services of trade, new products cannot be brought to market properly. This is because retailers connect directly with consumers. He is good at explaining the advantages and characteristics of new products to customers.

Advertising, Product Promotion, & Window Display:

Retailers display merchandise in shop windows to attract customers. This greatly increases product awareness.

Further Reading: Relevant Articles

Click on the below link to read relevant articles.

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