20th Century has witnessed many changes that occurred in our everyday life. Industrial and technological changes have made significant impacts on our lives. As consumers our needs and preferences are changing with changing environment. One industry which has become a part of our life and made a phenomenal impact in our day-to-day life is retail.
The word retail is in fact, derived from the French word “retailer”, which means to cut off a piece or to break bulk. A retailer may be defined as a dealer or trader who sells goods in small quantities or one “who repeats or relates”. Retailing can, hence, be considered as the last stage in the movement of goods or services to the consumer. But simply any firm that sells products to the final consumer is performing the function of retailing.1
Berman & Evans say that, “Retailing is said to encompass the business activities involved in selling goods and services to consumers for their personal, family or household use”.2
A retailer is the key player in the marketing process as he/she regularly interacts with the end consumer. From the marketer’s point of view, retailing is a set of marketing activities designed to provide satisfaction to the end user and profitably maintain the customer base through continuous improvements across all areas concerned with selling goods and services.3
Retailing involves the following
- Understanding the needs of the consumers
- Developing good assortment of merchandise to suit the needs of the consumers.
- Display the merchandise in the most appropriate manner so that the consumers find it convenient and attractive to purchase.
Retailers comprise street vendors, hawkers, Kirana stores, supermarkets, departmental stores, garment stores, fashion jewelry stores, chain stores, discount stores, video kiosks, computer peripheral stores, direct marketers, beauty salons, etc. Any organization engaged in the process of deriving its major chunk of revenues from the transactions with the ultimate consumers is qualified to be a retailer.
Role of Retailer in the Distribution Channel
A retailer is the last entity in the distribution channel. Retailers include all the business and individuals who actively participate in the transfer of ownership of goods and services to their end users. Figure.1.1 depicts a typical distribution channel.
A retailer may usually play the role of an intermediary, which links the producers, wholesalers, and other suppliers with the consumers. Companies generally prefer to specialize in manufacturing of products, leaving the task of selling the products to few wholesalers or retailers.4
Retailing is a set of business activities that add value to the products and services sold to consumers for their personal or family use. Retailing involves the following functions to be performed in order to increase the value of the products and services.
a) Providing an Assortment of Products and Services: Supermarkets typically carry thousands of items made by hundreds of manufacturers to enable the customers to choose from a wide range of brands, designs, sizes, colours and prices in one location.
b) Breaking Bulk: To reduce the cost of transportation, manufacturers and wholesalers ship the products in bulk (or) multiple units. Retailers offer the product in smaller quantities and units to suit the requirements of the individual consumer. This activity is referred to as breaking bulk.
c) Holding Inventory: A major function involved in retailing is to keep the inventory at a satisfactory level by the retailer so that products will be offered when consumers want them. By maintaining an inventory, retailers provide a benefit to consumers – they reduce the consumer’s cost of storing products.
d) Providing Services: Apart from selling goods, value-added services like providing free home delivery, credit facility, arranging loans etc., services like answering questions of consumers by sales persons and providing necessary information about product will make it easier for customers to buy and use the products.
e) Increasing the Value of Products and Services.
The value of products / services can be enhanced by
- Providing the product in the form that is acceptable to the customer (form utility).
- Keeping the store open when the consumers prefer to shop (time utility)
- Being available at a convenient location (place utility)
- Offering the product for sale (ownership utility)
Thus, retailer increases the value of products and services bought by their customers.
Features of Retailing
Retailing can be distinguished on various ways from other businesses such as manufacturing. Retailing differs from manufacturing in the following ways.5
- There is a direct end user–seller interaction in retailing.
- It is the only point in the value chain to provide a platform for promotions.
- Sales at the retail level are generally smaller in volume.
- Location is a critical factor in retail business.
- In most retail businesses, services are as important as core products.
- There are a large number of retail units compared to other members of the value chain. This occurs primarily to meet the requirements of geographical coverage and population density.
For citing this article use:
- Kondamudi, S. G. (2018). Impact of organized food and grocery retailing on traditional retailing business and customers.